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Jan 21, 2013

Trouble in paradise -- blame shifting on unemployment in Queensland

Unemployment in Queensland has -- unsurprisingly -- increased following the Newman's governments significant cuts across the public service. Blaming others doesn't cut it, says Professor John Quiggin.


Queensland Treasurer Tim Nicholls has attempted to explain away the latest unemployment figures, which show Queensland pulling up the rate for the country as a whole, as a case of “a weaker global outlook, including uncertainty about the US ‘fiscal cliff’ and a decline in commodity prices” — not the result of state job cuts.

The question that springs immediately to mind is: Why bother? Wouldn’t he be better off with some Thatcherite “no pain, no gain” rhetoric, promising that the cuts his government has implemented will yield pay-offs for all Queenslanders in the long run?

Other things being equal, sacking 14,000 people in a state with two million or so employed workers would raise the unemployment rate by around 0.7%, which is exactly what has happened. Of course, as Nicholls points out, other things aren’t all equal. The mining boom has slowed a bit and commodity prices have come down from their recent peaks, highlighting the dubious timing of these massive cuts. Under boom conditions, public sector workers would have more easily found new jobs.

Nicholls can, perhaps, take comfort that “second-round” effects have yet to show up in the statistics. The nurses, social workers and firefighters his government sacked have less money to spend on goods and services of all kinds. The tens of thousands who were threatened with the sack but ultimately spared would also be questioning discretionary spending. This may affect retail employment over the course of 2013.

Nicholls also tries to blame international events, such as uncertainty over the US “fiscal cliff” in the lead up to the New Year. Leaving aside the question of whether anyone in Queensland, beyond a handful of political junkies like me, paid attention to these tiresome theatrics, any effects would be felt equally throughout the Australian economy. Moreover, the Reserve Bank, which does pay attention to such things, cut interest rates in part to offset the effects of global uncertainty, of which the fiscal cliff was a small part. Assuming the RBA got the call right, there should be no net effect here.

There are some policies that might have been expected to have a more positive effect. Recently, Nicholls issued a press release trumpeting the fact that, despite its allegedly dire fiscal circumstances, the Newman government has raised the threshold for payroll tax, which was already the highest in Australia. Sadly, it appears that the medium-sized businesses benefiting from this move (the core supporters of the LNP government) pocketed the cash, but haven’t hired new staff.

Still, Nicholls looks insightful compared to Premier Campbell Newman who is quoted as saying that Employment Minister Kate Ellis’ statements simply reflect the fact that Labor wants to win seats in Queensland. Well, yes. Newman won his landslide victory almost by default. He apparently finds it startling that, when one side of politics makes a mess of things, the other side tries to take advantage.

It’s hard to recall a newly-elected government that has lost support as quickly and completely as that of Newman, Nicholls and Deputy Premier Jeff Seeney. Rather than trying to blame the messenger, perhaps they should pay some attention to the message they are being sent, in both economic data and opinion.



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21 thoughts on “Trouble in paradise — blame shifting on unemployment in Queensland

  1. Bill Hilliger

    Just wait till’ an Abbott/Pell coalition government gets in following the 2013 election. There will be massive redundancies and sackings of public sector employees accross the board. Justification by a lazy Pete our former fairweather treasurer who will study the Australian fiscal position and give Abbott/Pell a trigger to do their worst, unemployment figures will leapfrog to heights not seen since the Howard era, and yes interest rates will rise. Let’s hear the squeals then.

  2. klewso

    Were “Santo Claws'” lips moving when his “Timmy” said that?

  3. klewso

    This is “government by hyper-bowl”.

  4. geomac62

    Something is seriously wrong with QLD politics when just over 49% of the vote delivers a landslide in seats .

  5. Arty

    Jerry Mander main sure that the Bananabenders got the government they wanted, and that they can keep it for many many years.

  6. Karen

    Clearly, the only inference to draw is Queenslanders enjoy voting themselves out of work and services and handing their hard earned dollars to rich businesses who pocket and don’t hire. Mugs.

  7. Flowenswell

    Quiggin shows the obvious deleterious effects of a government ideologically opposed to government spending, and stimulus, unless it subsidises profit-making business. It’s a model that fails to recognise the need for a balance of prosperity in a society in order to attract sustainable investment, rather than attempt to race to the bottom. No doubt we’ll see similar results in the NT over the coming year.

  8. Hugh (Charlie) McColl

    So Karen, you write from the high ground observatory in which particular state?

  9. zut alors

    Queenslanders voted for Newman & Co because they wanted to make a point to Anna Bligh – she was obstinate, refusing to listen to the electorate’s concerns during her final term in office. Frustrated, the electorate was dead-set determined she would hear them (albeit too late).

    Unfortunately, 49% of voters having made their point and having rammed it home, we are now lumbered with this disproportionately representative gaggle who simply couldn’t believe their luck last March. We didn’t actually want them.

    Tread carefully in 2013, Australia.

  10. MJPC

    For Queensland (and NSW somewhat) it is much the case of “You reap what you sow”; of course Newman and his crown of tea party lights will implement failed policies, it is the only thought thay have…shaft the worker, look after the big end of town as aptly summarised below:

  11. Karen

    @Hugh McColl – NSW, which is pretty bad too, admittedly. Possibly, not as. However, I didn’t vote for the incumbents.

  12. Karen

    @Hugh McColl – I might also add that at least in NSW, there was a substantial reason to trounce Labor – the government as led by Obeid, McDonald and the rest of the terrible “Terrigals”, became utterly corrupt, as ICAC is demonstrating in spades. Not so, in Qld. The Queenslanders wiped the floor with Bligh who could actually govern a State, achieve consensus, and organise and coordinate a fantastic disaster relief effort (together with the Feds). The way the Queenslanders treated her was appalling. They deserve what they now get with this stupid short sighted peanut.

  13. Paddy Forsayeth

    Though some disagree with me, I still believe that what is going on in Qld. is NP revenge. Having lived in the Qld rural areas for nigh on thirty years and got to know the folks, I have formed the opinion that, by and large, these folks see Government and particularly Public servants as obstructive pests. So while Newman fronts the Gov. the NP elements are determined to prune the numbers of PSs as much as they can, while they can. We have not changed much in Aus. from the slash and burn rural economy/profit agriculture of earlier decades. I wonder if Abbott & Co. will bring in P Costello to do another bullsh*t cut and paste to the Aus. economy (look what Gillard did!!!!Arrrggghhh!!!) as he vindictively did to Qld. at the behest of Newman.

  14. Mike Flanagan

    Paddy F, it didn’t take Newman to wet Costello’s appetite to write a report that promotes the adoption of the H R Nichoills Society.
    He has been an active member for many years and a disciple of their Tea Pary philosophies. And the mouler was over generous and would have helped him invest in his weekender.

  15. Karen

    @ Mike Flanagan – yes, Costello, the former lawyer aka the “Dollar sweets” man who represented the employers in that infamous case against the workers. His colours were evident to see way back then. And to think workers had actually voted for him and his government…

  16. geomac62

    Costello was junior counsel assisting Goldberg QC in the dollar sweets case . Costello had one big talent , promoting himself . He appeared on the front page of the Sun with bandages after a student union disagreement . Bandages were stage props and a sham . Costello got clipped and threw himself on the floor . Strange strategy but it worked as that one punch was all that was happened , no busted arm , no bruises and no bandages required .

  17. Hugh (Charlie) McColl

    Karen, you claim you didn’t vote for the current NSW government. Which logically suggests you might have voted for the last lot that were turfed out for all the reasons you outlined. Anyway, not voting for the incumbents is no excuse, apparently, for Queenslanders, all of us, who you so casually label “mugs”. Seemingly, as far as you are concerned, if a stupid government is elected then the whole electorate is responsible. Actually, I agree with you. We should all take responsibility for the government we have collectively elected. You will just have to ‘own’ your stupid state government (this one or the last) as I have to ‘own’ mine.

  18. justsaying

    Captain Campbell Prof of Economics that he is thought..let’s see…bad economy…I know! Let’s sack everyone! That’ll give business a lift. Hmm…just can’t understand what went wrong?

  19. justsaying

    Oh my goodness Arty …Jerry Mander? And who would this mysterious Mr Jerry Mander be?

  20. robert Wright

    What I have seen so far of the LNP . Is so good I can hardly believe a Gov. can rule so well . What I am worried about is them stopping what they are doing because of neg publicity . My daughter has not been able to get a job when finishing UNI and has opted do another year at UNI because of cambels cuts . But it had to be done . I know he could of gone down the track of saying everything is alright untill 10 years on we would have been like Grease, My facts might be wrong but we were and probably still are spending over one million $ a day we don’t have(ie borrowed money)That is why are credit rating has gone down. What he still needs to do is get rid of at least 50% of maintenance staff and renegotiate maintenance contracts with the fat cat maintenance contractors like stow. If I was him I would get rid of stow completely as these contractors are sucking QLD dry

  21. robert Wright

    Payroll tax is retrogressive and stops company’s from hiring staff


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