For a government that has pledged to create one million new jobs during the next five years, the coalition is off to a rough start.
The six per cent jobless rate is the highest in more than a decade, and worse than at any time during the GFC.
Tens of thousands more jobs are at risk after Toyota this week rang the death knell for car-making in Australia by announcing it will end local production in 2017. The decision not only hits 2500 of Toyota’s own workers, but also many more in component manufacturers and suppliers across the country.
But while autoworkers face an uncertain future, staff at fruit processor SPC Ardmona received $100 million worth of good news.
The Victorian government will give the fruit processor SPC Ardmona $22 million as part of a $100 million co-investment that it says will save the company’s Goulburn Valley cannery.
Premier Denis Napthine said the state has agreed to co-invest with SPC’s parent company Coca-Cola Amatil. He said the investment secured the future of the Shepparton business and would save 2700 jobs.
Coca-Cola Amatil said the total combined $100 million package will be invested over a three-year period into efficiency measures and innovation at SPC Ardmona, the last remaining major fruit and vegetable processor in Australia.
— The Age Photography (@theage_photo) February 13, 2014
SPC safe, but concerns elsewhere
While the news was good for SPC staff, workers elsewhere could be forgiven for being unsure what the year ahead has in store.
Qantas has again been lobbying the federal government for changes to the Qantas Sale Act, which would raise the amount of offshore investment allowed. But whether action is taken in time to preserve jobs remains a case of wait-and-see.
With such iconic brands reducing their workforces, little wonder many Australians are concerned about their own job security.
Even those working in the commonwealth public service are not immune. They’re sweating on the Abbott government’s commission of audit which is examining commonwealth operations and spending.
Its interim report will be handed to Treasurer Joe Hockey shortly and many of its recommendations are likely to feature in the May budget.
A previous audit in 1996 resulted in the ACT slumping into recession.
‘Businesses create jobs’
The coalition insists that jobs are created by businesses, not governments. But governments can create the environment that encourages businesses to take on staff.
“The important thing for governments at all levels is to try to ensure that we get the fundamentals right so that people who have good jobs today can have even better jobs tomorrow,” Prime Minister Tony Abbott said this week.
His comments coincided with two surveys showing Australians are more concerned about keeping the job they have today.
Essential Research’s weekly online poll found unemployment was the main worry of a quarter of respondents. The Westpac-Melbourne Institute consumer sentiment index in February dropped to its lowest level in seven months – 7.5 per cent down on a year earlier. Westpac chief economist Bill Evans puts that down to people being rattled by the steady run of bad news about lost jobs.
Yet, despite all the angst over rising unemployment, the increase in the jobless rate has been slow.
Treasury is forecasting the rate to reach 6.25 per cent by June this year while the International Monetary Fund is slightly more optimistic, forecasting a 2014 peak of 6.1 per cent.
Turning the corner?
Several economic indicators, other than labour market numbers, support the view the economy may be turning the corner from its sub-trend pace. Notably the housing market has a spring in its step, aided by low interest rates.
It suggests home construction may be able to fill part of the gap left by the rapidly fading mining investment boom.
And while consumer sentiment is more subdued since its brief bounce after the September federal election, retail spending has picked up a gear. Business conditions too are nearing a three-year high while business confidence is running above its long-term average.
How quickly these dynamics translate into new jobs remains to be seen.
Labour force numbers are a lagging indicator that reflect what was occurring at least three months ago. Despite all the recent doom and gloom over jobs losses, many of the high-profile examples have yet to occur. Some are years away.
Abbott likes to point out that while the loss of car-making jobs is “very regrettable”, there are good news stories.
He cites as an example the decision by supermarket giant Coles to invest $360 million in building and upgrading new stores in Victoria which will create about 3500 jobs.
“We should be looking at the whole of employment picture rather than focusing on just one dimension of it,” the prime minister says.
But then again, that is what the national unemployment rate represents.
—with Garry Shilson-Josling, AAP