Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Hansard source

I thank the member for Franklin for her question and know that she has been very concerned during the days of the global recession to support jobs in her local community. The government welcomed the fact that, in September, the unemployment rate in this country fell to 5.7 per cent. That was as a result of 40,600 Australians finding work. What this shows is that our stimulus measures are clearly working. We are building the schools, ports, road, rail and broadband we need for the future. It is also abundantly clear that without economic stimulus Australia would be in recession right now and hundreds of thousands of Australians would be out of work.

Treasury has estimated that, if all of the stimulus which was expected to impact in 2010-11 were to be cancelled, this would result in a loss of up to an additional 100,000 jobs and a further contraction in the growth rate of real GDP of 1½ per cent—some very sobering statistics for those opposite who have opposed economic stimulus every step of the way. However, we are also aware that when you look behind the unemployment rate itself, you find that over the last year the level of full-time employment has fallen by 151,300, or two per cent, which has resulted in the unemployment rate rising by 1.4 percentage points. The fact remains that there are still over 658,000 Australians who want a job but do not have one.

Globally, the growth outlook is still weak with other major advanced economies in recession. Although some economic forecasters are now revising up their projected growth numbers, most remain very cautious. For instance, in the IMF’s recent World Economic Outlook in October 2009, growth has been revised up but the tone was cautious with a warning that the economic recovery is likely to be slow because global financial systems remain impaired. While the Access Economics report released today is much more optimistic, it predicts world output will contract by one per cent in 2009. Access Economics has also revised down its projected peak in the unemployment rate to 6.7 per cent in late 2010. This is an optimistic forecast, which in part is driven by ringing endorsement of stimulus, an assessment that the economic stimulus that the government has provided is no longer merely putting a floor under activity but is boosting it. It is the economic stimulus which we have provided here and has been provided around the world by other governments acting in a similar fashion.

The government will release updated figures in MYEFO as normal and although the pace of decline in labour market activity will not be as severe as earlier envisaged, a number of forward indicators are continuing to point to soft labour market conditions over 2009. The grim news for Australians is employment numbers are a lagged economic indicator and unemployment is not yet at its peak. It is therefore vital that the government’s fiscal stimulus measures be left in place, with a gradual phase-out in order to keep Australians working now and into the future.

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