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Queensland Economic Advocacy Solutions

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When Queensland politicians talk economic news

During the week we saw two major economic indicators released by the Australian Bureau of Statistics (ABS Catalogue 6202.0 Labour Force Australia and ABS Catalogue 5220.0 State Accounts) with widespread reference to these in the State Election campaign.

Firstly in relation to Queensland’s labour market in October 2017 we had both part-time and full-time employment increase.  However the number of unemployed persons also increased leading to a rise in the participation rate but with little overall change in the unemployment rate. The unemployment rate in seasonally adjusted terms rose from 5.9% to 6.0% and in trend terms remained unchanged at 5.9% but above the national average of 5.5%.

Naturally with a State Election so close the spin doctors were in overdrive.  A good example was:

Indeed a quick double check confirms that between January 2015 and October 2017 in trend terms total employment in the Sunshine State increased by a respectable 134,300 jobs. I have previously noted that the composition is not ideal, as the majority of these jobs have been created from part-time jobs. Indeed of the 134,300 jobs only 34,400 have been full-time positions and the other 99,900 jobs have been part-time with many of these employees indicating they want additional hours of work to get ahead.

The LNP countered with:

Again a quick double check confirms this was indeed the case with total employment down 29,600 between December 2015 to December 2016. These examples are obviously net results with jobs created and jobs lost all the time as businesses close, open or reduce or expand their workforces. 

Many of you will naturally realise that we should take with a ‘grain of salt’ claims that a State Government is responsible for those jobs created or jobs lost.  It is the economy that directly influences the jobs and not Government.  An exception is obviously the 24,037 additional public servants that have been employed and State Government work programs such ‘Back to Work’, ‘Skilling Queenslanders for Work’ and ‘Works for Queensland’ that have collectively created 24,700 jobs (but even these programs rely on businesses to actually do the employing).

The reality is there are much bigger levers on the economy and employment including population growth, interest rates, fuel prices, downturns or new projects in the resources sector, commodity prices, climatic conditions and the exchange rate.  None of these are in the realm of government influence with the exception of efforts to facilitate and/or approve resource projects such as the Adani Carmichael Coal Mine or New Acland Stage 3 expansion.

Indeed the State Accounts that were released on Friday are a classic example of the above point.  Gross State Product grew by only 1.8% in 2016-17 down from 2.6% in 2015-16. The 1.8% was below the State Budget forecast, the decade average of 2.4% and the 20 year average of 3.4%.   However a $2 billion hit to the Queensland economy from Tropical Cyclone Debbie accounted for approximately a 0.5% reduction in growth in 2016-17 which illustrates my point. The lowest offical cash rate in history, a lower Australian dollar, higher coking coal prices, mother nature (drought, rains, cyclones and floods) have all had their own individual and collective impact on our economy and in turn the labour market over the past three years.

Government or Opposition boasting about economic and employment changes are inflated for political purpose and are hyperbole particularly around election periods.  There is a wild card to my argument, however, its called 'business confidence'.  It is a valuable commodity and has the ability to substantially influence business investment and employment decisions.  The importance of a government’s influence on business confidence should never ever be underestimated and neither should the overall standard of political discourse in an election campaign.

 

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