JIM CHALMERS:
In the context of a slowing economy and global uncertainty, unemployment with a three in front of it is a really remarkable outcome. We welcome the fact that now more than 700,000 jobs have been created on our watch in the last 18 months. Today we saw 61,500 new jobs created in the month of November – 57,000 of those jobs are full-time jobs. This is a really welcome and quite remarkable outcome given all of the pressures on our economy and on our people. We welcome the fact that so many jobs were created in November. As I said, more than 700,000 jobs created under the Albanese Labor Government. That is far and away a record for a first-term government of any political persuasion. 700,000 more people are in work on our watch, partly as a consequence of our responsible economic management. This is an extraordinary result. We are only halfway through our term and already more jobs created than any other first-term government on record.
Our employment growth is faster than any major advanced economy. Australia leads the world when it comes to creating jobs. We've seen in the last 18 months that our jobs growth has been faster than any major advanced economy. Since these monthly records were first kept in 1978, or since 1978, there have only been 21 months in that whole 45-year period where unemployment's had a three in front of it, and 18 of those have been under Prime Minister Albanese and his Labor Government. So, this is really quite a strong outcome given the economic circumstances here and abroad. This is an outcome that we welcome, even as we recognise that unemployment, the rate has ticked up a little bit, and even as we recognise that we still anticipate and expect in the Treasury forecasts that unemployment will tick up over time, as the inevitable consequence of higher interest rates moderating but high inflation, and all of this global uncertainty.
I also wanted to point out that this is a new record for labour force participation and what makes this outcome especially welcome is the fact that not only have so many new jobs been created, so many of them have been full time, but also the participation rate is up as well and that is a very welcome and very important outcome. So to put this in context, as we conclude 2023, we've got unemployment with a three in front of it, we've got inflation moderating, we've got wages growing again after a decade of stagnation, we've got the narrowest gender pay gap that we've ever had, we've delivered a surplus and we've got a very small deficit for this year. And so even in the midst of a slowing economy and global uncertainty, we approach 2024 from a position of genuine economic strength given the conditions, and these unemployment figures that we get today, whether it is participation, whether it's employment to population, whether it's the hundreds of thousands of jobs created on our watch, the amount of jobs which were full time this month, all of these things are very, very welcome developments. And it does mean that as 2023 gives way to 2024, that there is a lot of the resilience and a lot of strength in our labour market, even as it begins to soften around the edges as a consequence of the conditions that we all confront together. Happy to take some questions.
JOURNALIST:
Thanks, Treasurer. Do these figures today give you sort of confidence that the soft landing is looking more feasible?
CHALMERS:
Well, I don't want to get ahead of ourselves. Obviously, we know from the Treasury forecasts that we expect inflation to moderate, we expect the economy to continue to grow but slower than we have been used to in recent decades, and these numbers give us some hope that the employers and the workers of this country are hanging in, even under pressure. I wanted to pay tribute to the employers and the workers of this country hanging in, despite all of the pressures that they are under in our own economy, but also the global economic uncertainty. This does give us some confidence that we approach the uncertainties of 2024 from a position of strength.
JOURNALIST:
You actually addressed this with me yesterday but in today's figures we see – based on the very strong population growth – the impact that's having on the unemployment rate despite the very strong jobs growth in the month. How do you think this interaction between this kind of easing in migration growth and easing in population growth in the coming 12 months, what kind of effect do you think that will have on the unemployment?
CHALMERS:
First of all, I think we should recognise that the employment-to-population ratio increased in November a little bit, 0.1 percentage points higher through the year, and that's a good thing. And what that tells us is that these new jobs created aren't just a function of population growth, that jobs are growing faster than population and that's what we want to see. Clearly, and we saw it in the population numbers released separately today as well, they came in largely as expected, within that two per cent margin of error for that spike in net overseas migration that we saw last year before we expect net overseas migration to halve next year. Clearly population is a factor when it comes to our jobs market, but what we see today is a welcome development which is jobs growing faster than population. The other important point about population, and you see it in the Bureau of Statistics release about population itself, is that even that number for 2022-23 – which came in around what we were anticipating – even with that number, our total net overseas migration since 2019-20 is 177,000 people fewer than was forecast before the pandemic. I think that's an important bit of context to the important and welcome debate about migration settings and the migration strategy is even with these numbers that we see released today, we're still 177,000 short of what our predecessors were expecting by that point. I think that's important to note.
JOURNALIST:
Thanks, Treasurer. Just following from John's question, how do you feel about the speed at which the jobs market is slowing?
CHALMERS:
Well, obviously we see around the edges of the jobs data, some evidence of softening. We've seen it in hours, we've seen it in job ads and in other ways. But I think overwhelmingly, the story about our labour market is a story of resilience. It's softening in expected ways – we still expect or we still forecast – the Treasury still forecasts an uptick in the unemployment rate but it really is quite remarkable that we finish, or we got to the end of November with an unemployment rate with a three in front of it, with 61,500 jobs created, almost all of them full time. That's a pretty stunning outcome given the conditions. But we still can see in the data some softening around the edges. We still expect, as I said yesterday when I released the Treasury forecast, the unemployment rate will tick up over the coming months.
JOURNALIST:
Treasurer, the population figures, and you noted 600,000-odd people in 12 months, like six equivalent Albury-Wodongas have been dumped into Australia in a very short period of time. Can you understand that people are thinking the country can't absorb that many people that quickly and they look at the rental market, they look at the housing market and think this is not working for us?
CHALMERS:
Look, that was pretty creative rounding, Shane. I think we got 518,000 in 2022-23, which is about what we thought it would be within the two per cent margin of error. There was a big catch-up in net overseas migration last year. That was overwhelmingly a story about students, international students, but also a story about tourists, and both of those cohorts play an important role in our economy. As I said in relation to Patrick's question, we're still to the end of 22-23 playing catch up on what was expected before. But with all of that context and all of that perspective, I think it is reasonable – and we recognise this in the Migration Strategy that Clare O'Neil released earlier in the week – is we want to make sure that our migration settings are in our national economic interests. I pay tribute to Clare O'Neil and the colleagues who put that migration strategy together. It's an incredibly thoughtful piece of work which recognises the pressure on our communities and recognises the opportunity that the right kind of migration brings to our communities and to our country. That is recognition that we need migration to be sustainable, we need it to be in our national economic interest, and I'm confident, with the changes proposed by Clare and others earlier in the week, that we will get those kind of migration settings right into the future.
JOURNALIST:
We've seen both youth unemployment and underemployment more generally, rising. Have you got a view on whether that's a demand side story from the economy slowing or a supply side story related to that influx of migrants who often tend to compete?
CHALMERS:
Typically we'll get into the finer details of the labour market release today and tomorrow and after that, but obviously a big part of the story here is our economy is slowing and if you look at those September National Accounts, growth which was relatively soft, consumption which was flat, and other indicators, we expect in a slowing economy the unemployment rate will tick up. As I said in response to the question over here, jobs growth is outpacing population growth and that's an important consideration as well. We'll get into the detail of it but clearly, as our economic conditions soften more broadly, our labour market is expected to soften too. But what we know from today's data is that the starting point is a really quite remarkable story of resilience.
JOURNALIST:
Sure, thanks, Treasurer. There's been a lot said about the luck that's been involved in the Budget once again and put you in the striking distance of the surplus – you have also spoken a lot about the longer-term spending pressures that are building up. Can we expect more work next year to producing more sustainable tax base, [inaudible] growth, what can we expect on that front?
CHALMERS:
Thanks, Poppy. First of all, when it comes to the budget position, what is too easily dismissed, I feel, are the very difficult decisions that go into getting the budget in much better nick. And governments which are provided an upward revision to revenue have choices, and you can be like the Howard and Costello Government and spend 70 per cent of those upgrades or you can be like our predecessors and spend 60 per cent of those upgrades, or you can be like us and spend on average 12 per cent of those upgrades. And that's the difference, really, between the surplus last year and a deficit last year. It's the difference between a very small deficit this year and a much bigger deficit this year.
So, this question of good fortune – obviously our labour market is stronger, our export prices are stronger, that helps with the budget but what really matters is what governments do with that and we have been incredibly responsible and incredibly disciplined with that revenue upgrade. You should expect that over time the balance shifts for governments between cleaning up the mess of their predecessors – which has been a big part of our job, the first 18 months – the balance shifts towards a greater emphasis on the forward agenda. But we have been really, right throughout balancing our near-term pressures and our longer-term generational responsibilities. So yes, there will be more effort on budget repair. Yes, this will be more effort on productivity and competition and dynamism in ways that we've flagged. Yes, there will be an even greater emphasis on the energy transformation, adopting, adapting technology, getting the care economy right because these are the foundations for the next generation of prosperity. We recognise that there is a lot of work to do in the budget, in the economy, near term and longer term to give the Australian people the type of economy they need and deserve.
JOURNALIST:
Treasurer, the Victorian Treasurer is claiming the state is only getting one per cent of the Federal Government's $11 billion priority infrastructure spending. Is that a fair share? He says Victoria's getting treated like the milking cow of the federation.
CHALMERS:
I mean obviously I don't agree with that and I disagree respectfully. I work with Tim, and I respect him. But that is only one part of the infrastructure pipeline. There is still a $120 billion-plus infrastructure pipeline. We've been up‑front for some weeks about the need to reprofile that, to make sure that we can actually build projects that have been committed to, to make sure that we manage our budgets and manage this inflationary environment that we are in. But the infrastructure pipeline is a ten-year pipeline. We have not cut the ten-year pipeline. We have reprofiled money within that pipeline to make sure that we can build things the best way and ways that recognise the economic conditions.
And our colleagues are doing – in the states and territories are doing really well out of us. It was only last week we committed to much more funding for health and hospitals. I extended the GST No Worse Off guarantee. We doubled funding for Roads to Recovery. And so, the states and territories are doing quite well out of our government. Funding for infrastructure over the ten-year pipeline has gone up for every single state and territory since the budget and where projects in a state aren't any longer receiving Australian Government funding, that money is staying allocated to that state. And so, these are all important bits of context. The other thing is this, and I say this once again, respectfully, whether it's Tim or the other colleagues, is I recognise the pressure that state and territory budgets are under. I ask them to recognise the pressure that our budget is under as well. I don't take shots at the states and territories. When they've had to do difficult things like cancel the Commonwealth Games or make difficult tax changes in state budgets, I haven't taken shots at them. You've all asked me about those things, I've been respectful about the difficult decisions that they have to make, and I ask them to be respectful about the difficult decisions we've had to make to get this infrastructure pipeline in better shape without compromising the overall size of the infrastructure spend.
JOURNALIST:
Thanks, Treasurer. Just off the back of that question, the New South Wales Treasurer suggested just now that the investments around the Western Sydney Airport are now at risk following the delay to infrastructure spending. So how do you respond to that, specifically whether the viability of the project will now be in doubt?
CHALMERS:
Well, I answer Daniel's concerns in the same way that I answer Tim's. The pipeline is no smaller than it was a couple of months ago. We're committed to $120 billion-plus in this ten-year pipeline. We've said where projects have been moved around that the same amount of money is staying allocated to that state. These are not new things. These are not changes that have been proposed in the last 24 hours. These have been a matter of public debate and engagement for some weeks now. I understand that the States would like more money from the Commonwealth, that's a story as old as federation itself, and we are providing billions and billions of extra dollars to the states and territories. We're doing that in a responsible way. We're managing the infrastructure pipeline in a responsible way as well.
JOURNALIST:
The youth unemployment rate, I mean that's at 9.6 per cent now, that's the highest levels it's been since 2021. Is the Government doing enough to ensure that young people aren’t bearing the brunt of a slowdown in the economy?
CHALMERS:
Well, obviously the youth unemployment and underemployment, Michael mentioned these in his question as well, are some of the signs of the leading edge of a tick up in unemployment more broadly, and clearly younger workers are front and centre when it comes to our effort to keep the jobs market strong. That's the motivation for our big agenda for skills. That's why we've tried to get, whether it's the minimum wage or wages in the care economy growing again, because we want our young people to have access to good, secure, well-paid jobs. That's a central part of our agenda, even as we recognise as the economy slows, often, young people are the first to feel the brunt of that.
I think that's all the questions – and I'm off to Logan tomorrow and will be knocking around Logan and Adelaide over the next few weeks. So, I really just wanted to wish you all a Merry Christmas and hope you get the opportunity to spend some time with loved ones. So, from me and my family to you and your families, I wanted to say Merry Christmas. I also wanted to say how much I've appreciated the opportunities, particularly here in this room, to engage with you on a whole range of important issues. It is often, but not always, enjoyable hanging out with you here in this Blue Room but I really appreciate it. I really appreciate it – engaging with you on these big questions and I respect your craft as well – and I hope you have a Merry Christmas. For those of you who are working over the break, I hope you get an opportunity at some point to recharge for 2024, which will be a really big year for the economy and here in this building.