Friday, January 18, 2008

Unemployment in the ACT - almost extinct

A dramatic step-down in unemployment has pushed joblessness in the ACT to a record low and caused businesses to claim that for practical purposes unemployment no longer exists.

The news puts further pressure on the Reserve Bank to push up interest rates once again when it meets in three weeks time, something that is reluctant to do in the face of global financial turmoil.

The official labour force figures for December released yesterday put the total number of unemployed in the ACT at just 3,338 – the first time it has fallen below 4,000.

Where are they? Give me their names,” said Chris Peters, the executive director of the ACT & Region Chamber of Commerce when told of the result.

We’ve now got twice as many job vacancies as people unemployed. Unemployment no longer really exists. Many of those 3,338 people would be between jobs having already lined up another one; many more don’t really want jobs. We’ve got overfull-employment"...

The ACT’s unemployment rate hit 1.7 per cent in original terms last month, sliding below 2 per cent for the first time. Every other state and territory recorded an unemployment rate of at least 3 per cent.

The ACT’s smoothed “trend” unemployment rate slid to 2.4 per cent, also a record low.

The national unemployment rate slid from a seasonally-adjusted 4.5 per cent to 4.3 per cent after an extra 20,100 Australians found jobs in December, marking fourteen consecutive months of jobs growth - the longest run in 27 years.

The Employment Minister Julia Gillard welcomed the news but said it pointed to a national skills shortage. With the Prime Minister she announced immediate funding for an extra 20,000 training places on top of the 820,000 promised over the next ten years.

“This is core business for the new Australian Labor Government. We are engaged in a national war against inflation,” said Mr Rudd.

“That means a tight approach to budget management and a constructive approach when it comes to investing in critical skills.”

But Chris Peters said the extra training would do nothing to ease the ACT’s skills shortage.

“There aren’t people to train. That’s what the figures show.”

“And if you can find people from outside the Territory to train you can’t get them housing,” he said.

“We’ve seen cases where businesses have attracted people from interstate, brought them to Canberra, and then they literally haven’t been able to find a house to live in and have left. They got a room in a motel and couldn’t find permanent a home.”

“Until last year the ACT government simply wasn’t releasing land. The construction industry was happy to build houses, it just couldn’t get the land.”

Mr Peters said the worker and housing shortage was eating into the ACT’s economic growth.

The National Accounts show that demand growth in the ACT turned negative in the September quarter, the only state or territory in which it fell. Two consecutive quarters of negative growth mean a demand recession.

The ANZ bank’s industry economist Wain Yuen said that business investment was sliding in the ACT after growing phenomenally fast as a result of new government office developments in 2005-06. In November retail sales in the ACT actually fell “in marked contrast to the national scene”.

“Arguably, the ACT’s labour market has hit supply constraints,” Mr Yuen said.

The Chief Minister Jon Stanhope welcomed the employment news as “a sign of strength in the ACT economy and a positive sign for ACT workers.”

Bureau of Statistics figures released last week show that 5,900 jobs remain vacant.