Despite all the hits and knocks the Government has taken – and continues to take – for its controversial WorkChoices legislation, Employment Minister Joe Hockey is claiming victory. According to an article in today’s SMH, “welfare changes and a healthy job market are set to deliver the Federal Government a $500 million budget surprise this financial year as the number of people on income support payments falls faster than expected.”

The latest Department of Employment and Workplace Relations estimates show $21.76 billion is to be spent on income support in 2006-07, down $520 million from $22.28 billion in 2005-06. The majority of the savings stems from reduced disability support and dole payments.

Hockey, seen as more of a salesman than his predecessor Kevin Andrews, was quick to give credit where it was due – to his own Party. “It is the first time it appears that the disability support pension numbers have been tracking downwards for a very long period of time,” Mr Hockey said.

“These figures indicate that there has been a good flow of people into work. Newstart payments coming down is an indication of the strong labour market. The deregulated labour market is proving very attractive for those people who previously were stuck on welfare.”

The ABS will release labour force data on Thursday, and in what could be a double-edged sword for the Government, if the unemployment rate falls to 4.4% – as some are predicting – interest rates could be hiked when the heavies at the RBA meet next.

According to the February NAB monthly business survey, released today at 11.30, “the combination of still very tight labour markets, high levels of capacity utilisation and rising wage pressures means that the RBA will / should retain a tightening bias – and, in the near term, is more likely to move up than down”.

Other NAB results are largely positive: business conditions marginally up to a robust +18 – and trending higher; trading and employment up six and four points respectively, to robust index readings of +24 and +9; confidence up six points to +12 – with trend now moving higher after rate related falls in 2006; capacity utilisation volatile but up strongly to 83.9% – trend, however, still appears to have peaked; wholesaling improving in February offset by weaker transportation.

The latest Raff Report is in, focusing on recent volatility in the Chinese and American markets. Raff also conducts some in-depth analysis on the recent copper: “There is a difference of opinion about the change in the consumption of copper with estimates varying from minus 4% to plus 3.3%. The former estimate for copper is ridiculous, and even the latter estimate might be low. This is because nobody knows accurately what the copper stockpile was and what tonnage was drawn down.”

Read more at Henry Thornton.