Crikey

With the Rudd Government cutting a reported $20 million from the budget of the Australian Bureau of Statistics, there’s been a sharp 24% cut in the size of its sample for the all-important employment figures.

The ABS said in today’s April jobs figures that it is “facing a tight budget situation in 2008-09, which has led to a range of reductions in the ABS work program.”:

One of the reductions is that from July 2008 the sample size of the LFS will be reduced by 24% when compared with the June 2008 sample being implemented under the 2006 sample design. The ABS is implementing this sample reduction in such a way that the sample can be easily increased again in the future should the ABS funding position change.

The ABS will fully implement the sample reduction in July 2008. Implementing the full reduction in a single month will mean less common sample between June and July, and hence the standard error on movements will be slightly larger than if the reduction was phased-in. However, in order to maximise the savings in 2008/09 the reduced sample needs to be fully implemented from July 2008.

The size of the sample will fall to around 41,100 respondents in July from the 54,400 to be used in June, figures from the ABS showed today.

It’s parsimony run mad as good quality statistics — especially for sensitive measurement of employment and unemployment, retail sales, and prices —  are essential for good economic policy making. The Reserve Bank won’t be appreciative. This is one area Malcolm Turnmbull should be whacking Kev Rudd and Wayne Swan for a short-sighted bit of economy.