MARIUS BENSON:
Joe Hockey, unemployment figures coming out today. The general consensus is they might be a little better. Do you share that optimism?
TREASURER:
Well Marius, they have been a volatile series. One of the things that will become apparent over the next few months is, as a result of our changes to job services, you’re going to see more people come into workforce participation data which could mean some volatility in the headline rate. But it’s good news, because it means that we are satisfying one of the key goals of the Intergenerational Report, and that is, to increase workforce participation. And that’s a sign that the economy is doing better than expected.
MARIUS BENSON:
But the sign the economy is not doing that well is reflected in the growth figures and also the unemployment figure, because even when you discount participation, unemployment is now higher than when you came to office, 5.7 then, 5.8 now.
TREASURER:
Well, it is hugely important to understand that there have been various pressures that we as a nation have coped quite well with. Our economy, as the Deputy Governor of the Reserve Bank said yesterday, is proving to be more robust, more resilient than many other comparable economies that have faced a dramatic drop-off in commodity prices. So the resilience is broad in the Australian economy. At the same time, we’ve got much work to do to drive infrastructure and job creation.
MARIUS BENSON:
But it must be disappointing for you when you see those figures now worse than when you came to office, because you talk about various pressures and better than comparable countries. You came to office saying we’ll provide stronger growth, a stronger economy and no excuses.
TREASURER:
Well that’s right. And bear in mind the Labor Party forecast that unemployment would rise to its current levels on a lower workforce participation rate. So they were actually forecasting that if they continue with business as usual, if they were re-elected, the unemployment rate would be worse than it is today. So we have done better, but that’s no justification for complacency. Importantly, we’re running job growth, job creation, at around four times the rate that we inherited from the Labor Party. So that is also important. But as I say there’s much more work to be done.
MARIUS BENSON:
How can jobs growth be running at four times the Labor rate and still unemployment is rising?
TREASURER:
Well, because what we’re seeing is, we inherited jobs growth which before the ABS revised the figures yesterday, under Labor was 3,600 jobs a month. We’ve got it up to around 24,000 a month this year. Now that is a huge increase. You’ve got to understand the Australian economy is restructuring. We’ve had a significant amount of job losses in mining and resources, but we’ve had a significant increase in the services sector. Services represent 70 per cent of the Australian economy - around 80 per cent of all jobs in Australia - but just 17 per cent of exports. So what we’re trying to do Marius is to lift the amount of exports we have in services, such as health services, education services, tourism and a range of others. And if we can lift services exports, we’ll lift job creation in those areas.
MARIUS BENSON:
You were telling Parliament yesterday, the economy basically has a mixed outlook, but not all the indicators are down. Your opposite number, well the Shadow Finance Minister Tony Burke picked you up on that, saying not all indicators were down. He said unemployment is up, debt is up, deficit is doubled and taxes as a share of GDP are also up.
TREASURER:
Again, look at what Labor was forecasting before judging us in particular on that point of time at the last election, but I accept there’s more work to be done. Since the last election, if we want to use that as the benchmark, the Australian economy is over $60 billion larger; more than 300,000 new jobs have been created. We’ve reduced peak debt by an estimated $110 billion. We’ve reduced the overall Budget deficit estimates by around $40 billion. All of those things, despite the fact that we’ve seen iron ore drop in price from around $120 a tonne to $50 a tonne and that’s our biggest export. So, there are swings and roundabouts, but the bottom line is the Australian economy is proving more resilient and it’s better at creating jobs today than it was under the Labor Party.