Yesterday’s monthly jobs report from the Australian Bureau of Statistics exposed — yet again — the self-interest of the Business Council, the ideological blinkers of the Liberal Party and the economic illiteracy of many in the media and crossbenchers seriously considering voting for the Great Corporate Tax Heist currently underway.
The latter in particular seem unable to connect two separate arguments by the Turnbull government: that it has presided over an extraordinary boom in job creation, and that a company tax cut is desperately needed to fuel job creation. It’s as if there are two separate realities, each home to one of those claims. Because both can’t be true.
The ABS February jobs report again confirms we’re enjoying a jobs boom — another 19,000 jobs in trend terms and underemployment down. For the 17th month in a row, new jobs were added last month in seasonally adjusted (16 on the more accurate trend basis). That’s the longest run of monthly job gains since 1978, when the current labour force series started.
And yes, it’s true that many of those jobs are in healthcare, the NDIS and education, rather than being created in the private sector. But there’s no gainsaying the rise in the participation rate to 65.7%, the highest since early 2011, the year of the resources boom proper — nor the rise in the female participation rate, which is at a new all-time record of 60.6%. The gap between male and female participation rates in the 15-64 age group is now below 10 percentage points. Malcolm Turnbull and Scott Morrison should be proud of this achievement and deserve every credit for it.
Moreover, most of the jobs growth is full-time, as the ABS noted. Over the past year, trend employment increased by 3.3%, which is above the average year-on-year growth over the past 20 years (1.9%) and was the growth rate for 2017 as a whole, meaning that although there appears to be a slight cooling because job numbers in the first two months were a touch weaker than forecast, the reality is quite different.
Thing is, it’s all been achieved with the allegedly punitive and deterrent company tax rate at 30%. The government and the Business Council can’t have it both ways — either our current taxation (and industrial relations) settings have delivered record strong jobs growth, or they badly need repair. Both can’t be true.
The Business Council and the government’s line — which was conjured up after Trump’s election, but missing when the Great Corporate Tax Heist was first announced — is that we need to follow Trump’s tax lead. But Trump’s tariff actions are a far greater issue for Australia than his corporate tax cuts (the vast bulk of which are being wasted on corporate share buybacks). Trump is trying to start a trade war with China, announcing plans overnight to impose 25% tariffs on $60 billion worth of Chinese imports — primarily manufacturing and infrastructure imports, rather than the far more sensitive consumer sector. China’s immediate response was to say it wouldn’t resile from a trade war — it specifically used the term. Trade wars, of course, are a game where everybody loses, including those who aren’t even playing, like us.
And as if tensions with China weren’t already high enough, Trump this morning sacked his national security adviser H.R. McMaster (one of the alleged adults in the kindergarten White House) and replaced him with right-wing neocon hawk John Bolton, who has called for pre-emptive strikes on North Korea, tariffs on China and a massive military build-up to show the Chinese the US “means business”.
Think what a trade war with China would do to the profits and jobs at tax cut supporters like Andrew Mckenzie of BHP, Twiggy Forrest at Fortescue and Rio Tinto’s Jean-Sébastien Dominique Francois Jacques (not to mention the troubled Roy Hill mine of Gina Rinehart). It would easily swamp the purported benefits of a tax cut as identified by Treasury’s modelling, based on fantasy assumptions like no debt. The increasingly virulent anti-Chinese tone from the White House will also leave Malcolm Turnbull to walk an ever-thinning line between our economic and strategic interests.
I heard Twiggy saying how he would use the tax cut to create more jobs. Last I saw Fortescue had never paid company tax.
Perhaps he gets a rebate?
Old Bill might be onto something if he stopped that!
The elephant is the fact that the unemployment rate went up, so there are more people around who didn’t get a job than those who did, which is I think twice recently that that has happened. This would not suit either narrative.
Yep, with respect to unemployment and underemployment we have gone backwards in 2018 contrary to the media’s COALition fairy tale.
In the last 3 months unemployment has risen and for 2 of those months the number of hours worked by Australians [part and full time] has decreased.
Nasty numbers.
At 5.6% current unemployment has barely budged in the last year or the last few years.
That’s not ‘dramatic’ job growth.
And is about double what anything like ‘full employment’ can be envisaged.
At 13.9% underemployment is no better than the recent past for some years and is slightly higher then pre-Xmas 2017.
Around about 1.5 million workers either full or part unemployed with job vacancies running less than 150,000.
Yep – so unemployment rate went UP 5.5% to 5.6% who is saying this?
ABS
http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0
Seasonally adjusted
Jan 2018 5.5%
Feb 2018 5.6%
apparently its really malcom that needs those tax cuts, he`s not getting the big interest rates on his cayman account so it needs topping, so he`ll just spin his bullshit conflict of interest lines about trickle down tax cuts to the mugs knowing full well they`ll swallow anything the conservatives tell them , feeding the chooks jo called it, in the meantime they`ll fly in a few thousand boor farmers to build up duttons shrinking voter base, probably kick a few labor voting anti fracking australian farmers off the their farms and install the white south African conservative voters in them.
“Malcolm Turnbull and Scott Morrison should be proud of this achievement and deserve every credit for it.”
Why? What the hell did they do? It’s like crediting Peter Costello with the boom years, because he was lucky enough to be sitting at the steering wheel (in neutral!) while the economy boomed on the back of China exports.
This is a joke Bernard, you and the entire economic commentators need to understand that governments have very little that they can do either way with the economy, and that it is in the hands of the animal spirits, international growth rates, and a million other things that governments have no influence over.
“the economic illiteracy of many in the media” Pot – kettle!
Although I recognise that’s unfair, you are literate, you are just far too believing of economic orthodoxies that should have been rejected years ago. You, Treasury, academia, are still mostly stuck in economic truths that are from the 70’s and 80’s. Of course in the 70’s and 80’s, the economic ‘truths’ were those orthodoxies from the 40’s and 50’s.
Like generals fighting the previous war, economic theory and practice is always solving the problems that used to exist, at a time, somewhere in the distant past.
A little more incredulity across all economic theory would serve us all better.