The fall announced this week in the long-term unemployment rate in November to the lowest number in more than eight years is welcome news indeed. The Australian Bureau of Statistics reports that188,600 people were listed as being out of work for 12 months or more, seasonally adjusted, the lowest number since June 1991. The news is made better because it follows figures announced last week that put total unemployment falling to the lowest level in over nine years.
The Federal Government is entitled to take a fair amount of credit for this, though some of it must be put down to natural business cycles.
Since the Coalition came to power it has done several things which now appear to be bearing fruit. Most important has been its fiscal discipline. It has reined in federal government debt and turned the Budget deficit into a surplus. Unfortunately, there are now signs that the Government is resting on its laurels or worse falling into the common political trap of setting up surpluses early in the electoral cycle so it can bribe its way to electoral victory later with greater spending — irrespective of economic conditions.
The Government’s fiscal discipline has provided low inflation and low interest rates. These provide more certainty and better opportunities for business which in turn helps employment.
Other changes made by the Government that have helped the long-term unemployed into jobs include the revolution in the way the government helps the unemployed; changes to welfare arrangements and new industrial-relations law.
Evidence that the old Commonwealth Employment Service has come in quite recently. A year ago the Government demanded that the service (renamed Employment National) compete with the private sector for contracts to place the long-term unemployed. There was a retender based on the previous year’s results. The results of that tender were announced this month. Employment National did woefully. It was out-performed by private-sector and community-sector providers. It seems that the new arrangements have been helping the long-term unemployed because they are getting better help in finding work.
Welfare and tax changes are slowly eliminating the huge tax disincentive when people go off welfare to work. But more work needs to be done, particularly for women seeking work.
Changes in the industrial-relations culture have also helped. Once again more needs to be done.
In short, there is no substitute for real jobs being sustained by a healthy economy.
However, there is one major failing by the Government which will require a major change — its attitude to education.
The figures produced this week reveal the importance of education. The bureau produced regional figures for the long-term unemployed.
They show large discrepancies. The rate is below 2 per cent across northern Sydney to 13 per cent in north-west Tasmania. Victoria’s Gippsland region, Queensland’s Wide Bay, and the far north coast of NSW fare badly. More work needs to be done on the correlation, but it appears that regions where education is higher have lower long-term employment.
The Government rightly says that making it easier for small business will help the long-term unemployed. Beyond that, however, it must recognise that wealth generation comes from information and knowledge, particularly in science and technology. More importantly, it must recognise that the public sector must lead the way in education and be resourced to do it.
The Government’s penny-pinching in higher education in the long-term will threaten all the good work it has done on the fiscal and administrative front.