FRIDAY, 11 SEPTEMBER 2015
SUBJECT/S: Unemployment figures; Abbott Government’s failure to plan for growth; Ministerial re-shuffle.
MARIUS BENSON: Andrew Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Marius.
BENSON: Just in broad terms, is it good news with the jobs figures?
LEIGH: I don't think we should spend a lot of time analysing movements in the unemployment rate that are well within its margin of error. But my concern more broadly is that the unemployment rate is still around the highest that it has been in 13 years and well above that of countries with which we compare ourselves, such as the UK and the United States. When the Abbott Government came to office the unemployment rate in Australia was a couple of points below where it was in the US and UK, and now it's about a point above those two countries. So our labour market is performing worse than theirs in absolute and relative terms.
BENSON: But if you look at the graphs of unemployment, the graph was heading down under Labor and continued to head down after the 2013 election. Now it's heading up, it's looking quite optimistic.
LEIGH: As I said, the unemployment rate – like opinion polls – is measured with a bit of error and yesterday's movement is well within that. But we do have figures which are the worst they've been in broad terms in 13 years. Youth unemployment is again sitting at around 14 per cent – that's one of the worst figures we've had in more than a decade. We know, Marius, that if we want to bring down the unemployment rate then we need growth probably above 3 per cent. Instead we've got growth of around 2 per cent and every quarter since the Abbott Government's first budget came down, the annual growth figures have been revised downwards. We did have growth around that 3 per cent level, now it's down around 2 per cent. If it gets worse and worse then it's going to be harder and harder to generate the jobs we need.
BENSON: Joe Hockey is pointing to other figures in the economy, particularly on those jobs figures. He's making the point that this isn't simply one figure that came out yesterday – Joe Hockey was saying employment had risen 167,000 this year, the best nine calendar months since 2010, four times the rate of job creation that was achieved in the last nine months of the Gillard/Rudd Government. He says it's a longer trend than just one figure.
LEIGH: Well if he wants to talk about absolute numbers, Marius, when he came to office there were 686,000 people unemployed and now there's 781,000 people unemployed. As our economy gets bigger, all of these numbers go up. That's why sensible people look at the unemployment rate, which is around the highest we've had in a decade. You need to also think about what the Government is doing to guard against the international shocks that may be coming. A correction in the Chinese housing market or the rise of interest rates in the United States would have significant repercussions for the Australian economy. What we're discovering now is that the Reserve Bank is looking at cutting rates largely because it has made the decision that the Government is not going to do what is needed for the economy with fiscal policy. Fiscal policy added to growth in the last quarter – you had that sudden blip up – but overall it has been detracting from growth. You see that in decisions around shipbuilding, which have been of significant concern to people in Western Australia, South Australia and Victoria.
BENSON: Can I leave the economy there and go to a political story this morning. There is a report in the Daily Telegraph which says the Prime Minister is planning an extensive re-shuffle of his ministry. Would that be a more formidable Government for Labor to face if some of the ministers who have been serving there since the election of the Government more than two years ago were to change?
LEIGH: Marius, I think any reasonable commentator would say that a reshuffle couldn't make this a less formidable Government. It's a Government which has been disappointing not only mainstream Australians, but also its own supporters. As some of the respected commentators have been writing over the last few months, what is the point of the Abbott Government? What is their core reforming agenda? We know the Daily Telegraph is very close to the Prime Minister's office. Indeed, members of Cabinet have sometimes asked about Cabinet decisions: has this already been leaked to the Daily Telegraph? So when the Daily Telegraph is suggesting that a number of senior ministers are going to be dumped, then if I was them I wouldn't be buying new paintings to put up on the wall.
BENSON: Andrew Leigh, thanks very much.
LEIGH: Thank you, Marius.
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