Unemployment could be worse: Hockey
Treasurer Joe Hockey believes unemployment would have been even worse without the Abbott government’s policies.
This week’s labour force figures show unemployment rose to 6.4 per cent, the highest in more than 12 years.
The result was worse than many predicted.
But Hockey believes it could have been worse still.
“Whatever was happening previously wasn’t working because when we came into government, 200 jobs a day were being created in Australia,” he told ABC radio on Friday.
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Now there were 600 new jobs a day on offer.
“If we had stayed at 200 jobs, unemployment would be 7.5 per cent today, not 6.4 (per cent),” he said.
The treasurer insisted the best possible thing for employment was to get the economy growing faster.
“I’m trying to get it to shift and things that have been unpopular but necessary have helped,” he said.
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Treasury predicted before the 2013 election that predicted unemployment would peak at 6.25 per cent in mid-2014 then stabilise before dropping to 5 per cent in 2015/16.
The head of the Reserve Bank has cautioned against overreaction to Australia’s rising unemployment rate, saying the figure remained low, despite reaching a 12-year high in January.
In his bi-annual testimony to a parliamentary committee on Friday, Stevens said unemployment was now expected to peak higher than originally forecast, as the economy continues to grow below-trend.
But he cautioned against overreaction to the surprise jump in unemployment in January, saying it was important to look at the trend.
“It’s always unwise to react too strongly to one monthly number,” Stevens said.
“We need to step back from monthly ups and downs … and try to distil what the trend is.”
The trend is that unemployment is slowly creeping up because the economy is not growing enough jobs to keep up with labour force growth, Stevens said.
But although unemployment was rising, it still remained low, he said.
“By the historical standards of my professional career, that remains low,” Stevens said.
