Release type: Transcript


Media conference - ABS labour force figures


The Hon Tony Burke MP
Minister for Employment and Workplace Relations
Minister for the Arts

TONY BURKE, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: The unemployment figures that have come up today show once again we have unemployment at low levels and that's been steady now for some time. So the movement across the country, it's about as steady as it can get. Movement across the country in total number of people employed has gone up, but it's gone up by 900 people. So the unemployment rate remained steady at 3.5%, the participation rate remains steady at 66.6%. 

But this tells the story as well as to how the partnership between low unemployment and good wage growth has been broken. These are the exact sorts of figures and the exact sort of circumstance that for years we would always be told, wages will start moving when unemployment gets low. 

Unemployment has now been at these low levels for quite some time. And yet, our Wage Price Index remains at 2.6. Let's remember the Governor of the Reserve Bank when he referred to what the anchor point of wage growth should be. Now an anchor is something that you can sometimes be a bit below sometimes be a bit above, but the anchor point was 3.5. 

We’re in the perfect circumstances where macroeconomists will say that's when wages will get moving. And we're at 2.6. 

At a time, where there's significant global inflationary pressures on every household in Australia today's figures in terms of jobs are to be welcomed, they're good figures. But they also tell the story as to why we need to get wages moving in Australia.
REPORTER: So around 9000 extra people became unemployed last month, is the government expecting that thing as you go higher in the months ahead?
BURKE: There's a few different factors at the moment to work through. Obviously, there'll be projections on future rates that will be in the budget. And so I'm not going to get in front of that. But it's also the case that there will be an impact in the number of hours worked in some parts of Australia as a result of floods. And when you have an impact on the number of hours worked, that then has an impact on the underemployment rate. 

It doesn't have a direct impact on the unemployment rate, because you have a significant number of people who are still employed but working zero hours. So for where things are out at the moment, that's the immediate impact, if we would have cast forward, but there'll be more indications on those sorts of projections in the Budget.
REPORTER: So if that unemployment rate does rise, what kind of hole does that punch in the Government's budget?
BURKE: Let's not get in front of a Budget that hasn't even been released yet. And you need to remember that the unemployment rate needs to be weighed against – sometimes you have a shift downward, a shift upwards in unemployment – but your number of people in work has also gone up because you've had a shift in the participation rate. 

So there's a few moving parts here. But the big part that's not moving is wages. And if there's any story of this sustained, low unemployment figures, it's that the partnership has been broken. That low wage growth we were told – sorry high wage growth would, or better wage growth would come with lower unemployment. 

We've had low unemployment for quite some time now, wages are still well behind that anchor point of 3.5%.
So you don’t think the unemployment rate could drop?
BURKE: Oh no, in terms of the figures I've said that you'll see more projections with respect to the Budget. I've given some casting forward in respect to the floods. I won't go further than that today.
Just on tax cuts – Stage Three tax cuts are expected to cost about a billion dollars more over 10 years than originally estimated. How much of the increase is due to the fact that wages are set to rise?
BURKE: The full modelling that the treasurer announced this morning, I can't provide further information on the judgments into exactly what the modelling was the Treasury's used there. I don't have a straight answer on that.
REPORTER: With such a strong jobs market are you expecting to see a better budget bottom line because income tax revenue?
BURKE: There's no doubt low unemployment helps the budget, there's no doubt about that. Low wage growth hurts the budget. For years now while I was in Opposition, every year the previous government would pump up their Budget figures with predictions as to what would happen with real wage growth. It never happened. 

The reason those improvements in real wage growth never happened was what I've referred previously as sort of the leaks in the pipes, the leaks in the system and the loopholes in the system were never closed. 

So to get wages moving – having a low unemployment figure isn't enough. You also need to act on secure work, and you also need to deal with the systems that determine what happens with wage growth. There will be, after the legislation that I'll introduce next week, after that's been dealt with, there will still be a lag that simply sets a framework. 

But we've had 10 years where a framework like that was never set for one simple reason. And that's the previous government had low wage growth as a deliberate design feature of their management of the economy. We want to get wages moving, and we're doing that deliberately.
REPORTER: When will the government release details about what multi-employer bargaining will look like under your proposal?
BURKE: That'll be in the legislation that I've introduced to the Parliament next week. In terms of private business consultation there's some statutory processes that are happening as we speak, with respect to some of the peak business groups. They have been in confidence, but they always result in various amendments to what's put forward and union organisations are part of that consultation as well. Tomorrow a similar process happens with the states. So there's ongoing revision that occurs in this process and then after it's been introduced, you go through the normal Senate inquiry process as well.
REPORTER: And finally, do you think employers are building big workforces to make up for COVID absenteeism?
BURKE: It'll depend on your workforce set. It'll depend on your workforce. And one of the challenges that most employers will tell you at the moment, is they in fact, are having trouble building big workforces simply because of labour shortage. That we have a skill shortage issue, we have a labour shortage issue, and so it's pretty hard to find the business that will tell you they're back to the staffing levels they were at prior to beginning of the pandemic when the previous Prime Minister told people who were on visas to return home. 

So there may be examples of what you've just described, but I've got to say in terms of the meetings that I have with business – I’m not having any of them tell me that they are building up their employee numbers in a really serious way to deal with absenteeism, they're actually all just saying the opposite. Which is that they're having trouble finding the workforce at the moment. Thank you very much everyone.