While the boom is concentrated in mining there was also strong growth in manufactures. Meanwhile the unemployment rate hit a 30 year low as employers took on an extra 153,000 workers over the past 3 months of which 28,000 had been previously unemployed. Workforce participation levels have risen to record levels of 65%. The path to continued growth in employment lies in supporting the government’s WorkChoices IR reforms.
Watch the silence on these remarkably positive developments in the primarily left-wing blogosphere. The main focus there I'll bet will be to echo the Labor Party’s foolish claims, 'in accents most forlorn', on the likely implications of these positive developments for higher interest rates. But the Australian’s editorial today correctly observes:
‘While Labor's policy remains to scrap the workplace reforms and reregulate the workplace, it has little real credibility in its interest rates attack’.
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12 comments:
Harry,
you are wrong on a number of ways.
given that the terms of trade are at levels not seen since Lillee and Thommo bowled for Australia 9 the last time we had a current account surplus) one has to ask why isn't there a trade surplus each month every month.
Australia traditionally encounters very bad current account deficits when commodity prices go pear shaped yet we are doing this when they can hardly go any higher.
Secondly the new IR laws are in fact more regulatory than the previous regime.
There is much more legislation and it takes far longer to register an agreement.
One wouldn't see the effect of the new laws yet anyway.
It is not unusual after 15 continuous economic growth to see unemployment to fall substantially.
Obviously both Howard and Costello who said achieving 5% unemployment in the 98 campaign never thought this would happen.
We are running a huge investment boom Homer - the reason for the large CAD. But the investment isd now paying off with higher exports.
I did suggest allowing employees to freely contract with workers with minimal government interference was the best way to continue to reduce unemployment. I agree that the effects of WorkChoices are too limited and too recent to have any impact yet.
Harry,
It isn't a boom of those proportions yet.
Politically current account deficits are only good for Oppositions when they lead to a large fall in the currency. This happens when the terms of trade starts to fall.
As Micro-economics is your forte supply surely must increase soon as a consequence of the prices.
IF we had adopted a NZ IR change we probably would see much lower unemployment down the track ( isn't NZ's 3.6%).
I don't think its bad news for Labor in the same way as I don't think large trade deficits are good news for them.
Do you really think the trade deficit really registers with most people? and for those that it does register with, do you really think they blame the government one way or another ?
The only way I think it will register is if there is some of immediate event caused by it, like a currency collapse, which doesn't seem likely right now.
"One wouldn't see the effect of the new laws yet anyway"
Good to see you asserting the falseness of the ALP's fraudulent anti-IR campaign, Homer.
Whyisitso there is always a lagged effect on ANY new IR laws.
It was so when Keating deregulated the labour market in 1993 or when they really deregulated in NZ.
EP at LP,
WOuld be most interested if you have a source for the claim of the lag in effects for the 1993 changes - at least the switch to enterprise bargaining happened pretty quickly (by 1995) as documented in Wooden's book.
cheers
by quickly you are saying within a month or too?
That isn't my reading!
I'm going to bed. Just a last dig for the night at silly old Homer. Sorry about the "off topic" Harry.
Harry -
Firstly those unemployment figures are extremely misleading, as you well know; both governments having changed the definition of the term unemployed until it now encompasses anyone who works an hour a week. Casual and part-time labour is at unprecedented levels, and the rate - though low - is nowhere near as low as touted.
Secondly, do you really think it's good that more people are getting paid a flat rate of sometimes under ten dollars an hour to work late nights, sundays and in lieu of holidays?
As a tenured academic, I think perhaps you have been too far away from a job that pays you peanuts and expects you to work 24/7. I would be interested to hear your perspective if you spent a couple split-shift sundays washing up in a commercial kitchen.
It's easy to love low unemployment when you are highly-skilled, largely insulated from the changes, and taking home a very good wage.
Maybe we should just make $3 an hour the award, then there would be heaps of employment, hey?
Patrick the definition of unemployed and employed has been steady as long as I can recall looking at the statistics which is something like 20 years.
Are you mixing up ABS statistics with those on unemployment benefits. A far different subject.
Hi EP,
I don't think so. The info has been more difficult to find than I thought it would be and I don't have a lot of time at the moment, but see this to back my claim.
As I say, my inept googling hasn't unearthed changes, but I'm really sure that both governments fudged the definitions.
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