Friday, February 12, 2010

It's the stimulus, stupid. You can't spend $14 billion upgrading schools without employing people

Employing blokes

The stimulus has been credited with a surge in male employment that has pushed Australia's unemployment rate down to 5.3 per cent as the head of the Treasury has declared the financial crisis "behind us".

An extra 52,700 Australians found work in January, two-thirds of them male .

Since October an extra 123,000 Australians have found work, three quarters of them male .

"When men outnumber women so much it has to be an industry story," said Deutsche Bank economist Phil O'Donohue. "The building industry is the obvious candidate. Since mid last year almost 8000 primary schools have been building halls and computer labs and libraries with $14 billion from the Primary Schools for the 21st Century program."

"It looks as if in January with school about to return the tradies put on more blokes."

"It has to be the stimulus... Private non-residential construction is flat, private industry isn't investing outside the mining sector."
Victoria provided the lion's share of the new jobs creating 41,900 new jobs since October, half of them full-time. NSW by contrast created just 10,100; only 2,000 full-time.

The further plunge in unemployment from 5.5 per cent in December to 5.3 per cent in January pushed up the Australian dollar more than a cent to $US0.8874 as the money market doubled its bets on a March rate hike.

Coalition Treasury spokesman Joe Hockey called for an end to stimulus spending saying the big issue was no longer unemployment but interest rates.

"It’s time for the government to explain how spending money on school halls in 2012 is going to create jobs and help address the economic downturn in 2008," he said.

Treasurer Wayne Swan said were it not for the stimulus Australia would be in recession. "We celebrate that 52,700 Australians told their families in January they got a job. Nothing is more important to somebody’s security than the knowledge that they have a pay packet."

In a grilling before a Senate committee Treasury chief Ken Henry said the stimulus had been responsible for keeping or creating 210,000 jobs. Without them Australia's unemployment rate would be nearer 7.3 per cent.

He said what people called the global financial crisis had "passed".

"I think that's safe to say. There may be further adverse shocks, some significant for individual countries, but I don’t imagine shocks of the sort that would be globally significant and I certianly won’t be speculating about those sorts of possibilities," he told the committee.

Unemployment was worse than it looked because the hours worked had dropped. "If you wanted to translate our rate into what it would be if hours worked were higher you could probably add a couple of percentage points to it. That is instead of talking about 5.3 per cent, you might be talking about 7.3 per cent," he said.

Employment Minister Julia Gillard said despite the jobs growth there were 124,500 more Australians unemployed than were at the start of the global financial crisis.

"They are the Australians we want to support through the economic stimulus and through the economy so they get the benefits of work."

Published in today's SMH  and Age 

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