News National High jobless rate shows reform needed: PM

High jobless rate shows reform needed: PM

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Prime Minister Tony Abbott believes a six per cent unemployment rate highlights the need for further economic reform but he won’t be taking advice from former Treasury head Ken Henry on how to achieve it.

Dr Henry, who led a tax review under the Rudd government, has warned Australia is facing an imminent crisis unless there is comprehensive reform of the taxation system.

Mr Abbott, while describing Dr Henry as a distinguished former Treasury secretary, said he “deserved to be listened to with respect but they are just private views of a private citizen”.

“We have a tax reform program,” Mr Abbott told reporters in Adelaide on Thursday.

That reform begins with the repeal of the carbon and mining taxes, and the reduction of the company tax.

He also dismissed Dr Henry’s concern that his successor, Martin Parkinson, was being forced out of Treasury’s top job after the May federal budget.

“Incoming governments do very much want to place their stamp on the economic policy of the country and that’s exactly what we are doing,” Mr Abbott said.

Shadow treasurer Chris Bowen said he supported Dr Henry’s call for tax reform but disagreed with his claim that a GST increase was inevitable.

“By its very nature it’s regressive and would impact on lower and middle-income earners more,” he told ABC Radio.

But Assistant Infrastructure Minister Jamie Briggs said the GST was ultimately a state tax.

“If the states want to argue for changes to the GST, they should do that,” he told reporters in Canberra.

Mr Abbott said high unemployment was an important spur to further economic reform.

The latest labour force figures showed the jobless rate remained at a decade high of six per cent in February.

“Plainly if we want to see more people employed we have got to get taxes down,” Mr Abbott said.

The figures showed the number of people in employment jumped by 47,300 in February to 11,530,800. The jump was almost five times stronger than expected by economists and follows an upward revision on the previous month’s numbers.

Those in full-time employment surged by a staggering 80,500, up to 11,502,200. But this was offset by a fall in part-time workers.

Treasurer Joe Hockey said the figures make a mockery of the opposition’s claim that one job has been lost every three minutes since the coalition was elected to office.

Using Opposition Leader Bill Shorten’s methodology to argue this, he said full-time employment has now increased by 33,700 since August 2013, rather than falling by 63,300.

“This report is a positive sign but there is still much work to be done,” Mr Hockey told AAP.

But opposition employment spokesman Brendan O’Connor said the government was still running about 65,000 behind its target if it wants to achieve one million jobs in five years.

He also said the jump in the West Australian unemployment rate – from 5.2 per cent to its highest level since December 2003 at 5.9 per cent – was an alarming change given the state’s importance to the national economy.