EDITORIAL: Ideology and the jobless

MONTHLY unemployment figures should be treated with caution.
Nanjing Night Net

The sample size used by the bureau of statistics in its regular survey is small and the figures are consequently best viewed as a series over time.

But that hasn’t stopped the government and the opposition from sparring over the latest set of numbers.

The September figures showed a jobless rate of 5.4 per cent, up from 5.1 per cent in August. This is the highest unemployment rate since April 2010.

The government says more people are in work than ever before, and a small swing upward in the jobless rate is all due to the Coalition in Queensland sacking swathes of public servants. Feeding this assertion is a high Queensland jobless rate of 6.3 per cent.

Extrapolating from this assertion, the government has warned voters that “this is what Liberals do”, adding that opposition leader Tony Abbott would – if elected prime minister – soon be drafting thousands of redundancy notices for commonwealth government employees.

Liberal shadow treasurer, Joe Hockey, has come back at the government with the counter-argument that Labor is to blame for the higher unemployment because it has fostered a climate of low business confidence.

After that, the argument splits along the usual ideological lines, with Mr Hockey defending the Queensland job cuts and insisting that getting that state’s budget back into surplus is a better strategy than using public expenditure to bolster employment.

Mr Abbott, predictably, has declared that jobs are being lost because of the economic effects of the carbon tax.

Hollowed economy

Politics aside, a rise in unemployment has been predicted for some time.

The mining boom – untempered by any effective resource tax – drove up labour costs and the dollar, hollowing out the non-mining sectors of the economy.

Warnings went largely ignored, perhaps because some policymakers believed the process would reverse when the boom eased. It hasn’t, at least partly because massive programs of money-printing by foreign governments have created a “race to the bottom” in currency values, leaving Australia isolated as an attractive high-yield haven for overseas investors trying to preserve the value of their money.

Tragically, neither side of politics has managed to espouse any vision to combat this problem, leaving it up to the reserve bank to do what little it can by gradually cutting interest rates.

Even more tragically, it’s likely that neither side will be bold enough to act usefully in the near future, with Labor having badly mishandled parts of its stimulus package in the wake of the first round of the global financial crisis, and the Coalition philosophically wedded to notions of austerity.

Most tragically of all, that means unemployment figures may get worse before they get better. Instead of arguing ideology, the nation’s leaders ought to consider the human cost that possibility implies.