Media conference, Sydney - new ABS Labour Force Figures
THE HON TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: I'm very pleased to welcome the labour force figures that have just been released by the Australian Bureau of Statistics. In short, the story is this; employment is up. Full-time employment is up. The total number of hours worked is up. The participation rate is up. And as a result of all of that, the unemployment rate is down, and the underemployment rate is down.
When the figures came out during January, there was a bit of speculation at the time that the figures may in fact be an anomaly on the basis that there was speculation that a large number of people may have actually delayed the start of a new job until February rather than taking it in the peak of summer. That's exactly what's happened. And so Australians made a decision in reasonable numbers to take a well-earned break over January. And as a result, we saw an uptick in the unemployment figures over January and that's now returned back to 3.5 for the numbers we have now. It's a very strong labour market and what we have now is certainly welcomed. But we're also very much mindful that over the longer term, the government still expects, in line with Treasury's forecasts in the last budget, still expects these employment numbers to moderate over time. The unemployment rate has improved in every state and territory with the exception of Queensland. But Queensland, you might remember a month ago, the Queensland figure was actually really strong. And so what's come back a little bit there is sort of more of a correction as to what happened in the previous month.
I’ll put all of this against some of the hysteria that both my counterpart, Senator Cash, and the Shadow Treasurer Angus Taylor put out a month ago. In terms of what the test of the previous figures were. A month ago, we were told by Senator Cash that the reason the unemployment figures had gone up was because of the new industrial relations legislation. That being the case, I don't know how on earth she explains that they've now gone down now that the legislation has been in for longer, and that we also have the improvements with underemployment the improvements in terms of the total number of hours worked.
Similarly, the Shadow Treasurer decided to talk about stagflation as though we were on the road towards that because there had been an uptick. That was the Shadow Treasurer speculating in January double digit unemployment. And once again, they were putting this in the context of industrial relations legislation. Again, we see the strength of the Australian economy, the strength of Australians going in and getting jobs, compared to the hysteria of an Opposition that basically finds ways to say “no” at a time when the rest of Australia is getting on with the job.
JOURNALIST: Could the tightness in the labour market see a lift in wages?
BURKE: We have now, with wages growth at 3.3 per cent in the latest WPI, wages are now stronger than they've been for effectively the entire time the previous government was in office, when they were deliberately keeping wages low. But the concept that there is a direct link between unemployment figures and wages figures, I think we've seen that that's simply not true. We would have seen wages growth during the life of the previous government in significant terms and at the start of this government, even before we changed the industrial relations laws, if that link was as tight.
I've described it before as being the macroeconomists will talk about the hydraulic pressure that when unemployment gets low, it just pushes wages up. But in Australia, we have had industrial relations laws where that hydraulic pressure is there, but there are leaks in the pipes, and we fixed a number of those leaks in the pipes last year so that wages could start moving.
That 3.3 per cent that we have at the moment in the wages price index is, I'm not saying that the unemployment figure is irrelevant to it, but it has certainly been helped by the fact that the Government took a strong view on the Annual Wage Review and future wage price indexes will be affected not only by Annual Wage Reviews as they go forward, but the position that the government took in the Aged Care Review and most significantly, the Secure Jobs, Better Pay legislation that went through last year. This year, we'll be looking at the legislation to close loopholes to make sure that that improvement in pay doesn't get undercut through bad actors.
JOURNALIST: And with these really strong numbers, do you think there will be an uptick in wages growth?
BURKE: The pathway to better wages will be through the legislation and the system that the government's been putting in place. So the unemployment is not irrelevant to what happens with wages, but on its own, a low unemployment figure doesn't do the job. We're making sure that government now does the rest of the job. After nearly a decade of a government deliberately designing to keep wages low, how do we do that job? We participate in the Annual Wage Review; we're dealing with the gender pay gap and we're making sure we put forward the legislation to both get wages moving and to close the loopholes that are otherwise undercut it.
JOURNALIST: Do we need more unemployment?
BURKE: I'm the Minister for Employment. My job is really clear. I want everybody who's looking for a job to find one. That's what I want. At the moment, we have a different problem in parts of the labour market where there are many employers who simply can't find the workers. That has eased a little bit from what it was when we first came to office. And the work that both Clare O'Neil and Andrew Giles have done in a 40 per cent clearing of the visa backlog has been really significant in that. But certainly, I get employers wherever I go, I was in Caboolture yesterday, telling me about the challenges they're having in finding workers.
JOURNALIST: Are you worried about possibility of a wage price spiral?
BURKE: No, not at all. Not at all. And I can tell you why I'm not worried about a wage-price spiral. A wage-price spiral is driven by high wages growth. Australia does not have high wages growth, so that's how I know it's not driving inflation.
JOURNALIST: And do these figures show the labour market is too tight?
BURKE: Look, my view is always that we're at very, very low numbers at the moment and we reasonably expect that they will moderate, so that's what we expect will happen. Even as there's some moderation, that's still a situation where we're talking about a very good labour market, where people who want to find jobs should be able to find them.
JOURNALIST: Awesome. Thank you so much.
BURKE: Thank you very much. Good.