Michaelia Cash

Michaelia Cash must be replaced as minister for employment. Not for her breach of ministerial integrity, but because she is not doing what is supposed to be her day job — managing the employment portfolio for the Australian people.

Most workers around the world are enjoying increased work hours and higher wages as the current remarkable global boom is boosting production, exports, productivity, economic growth and company profits.

But Australia is an intriguing enigma for economists. It has a record trade surplus, had an excellent quarterly rise in gross domestic product (GDP) last week of 1.1% and, despite the negative third quarter, now has impressive annual GDP growth of 2.4%. Companies are now recording record revenues and profits. Yet jobs are being lost, wage rises are at record lows, and the gross debt blew out by $10.5 billion just in the last two weeks. How is this mathematically possible?

It was disclosed this week that Michaelia Cash had acquired another investment property — worth $1.4 million — in November, when she should have been protecting the 6512 men and 10,989 women thrown out of work that month. Or the 16,342 workers aged 15 to 24 who lost their jobs.

This is the fourth house in Cash’s portfolio. Or, at least, the fourth she has remembered to list on the parliamentary register.

This might not be an issue if her ministerial portfolio were also humming along. It isn’t. It is arguably the second worst-performing in the Turnbull government, after Treasury under Scott Morrison.

Worst employment outcomes ever

  • The ratio of full-time jobs to total jobs fell in March 2016 — six months after Cash took on the job — to the lowest in Australia’s history, 68.6%. This tumbled further for the next two months, and then it fell below 68% for the first time last September, on her one-year anniversary. The January number is a new record low of 67.7%;
  • Job participation for men fell in January to 70.0%, an all-time low; and
  • Job participation for young people aged 15 to 19 fell to a record low in October of 52.1%. For the three months October to December, this remained below 52.3% – for the first time. It is now 52.9%.

Bad job outcomes, but not the worst

  • The number of total jobless has been above 720,000 for the last three months. The previous time this occurred before the Abbott/Turnbull period was in 1998;
  • Hours worked per person per month — the best indicator of real paid work — fell to 84.0 in April last year, the lowest level since March 1994. Hours worked have been below 85.5 for the past 11 months, the worst outcome since the early 1990;
  • Job participation dropped to 64.4 last September and October, for the first time since 2006; and 
  • Women’s unemployment has been jammed at 5.8% for the last three months. It has been at that level or higher for 11 of Cash’s 16 months. Through Labor’s entire period this never exceeded 5.7%.

Comparisons with other countries

For most of the post-World War II period, Australia’s jobless rate has compared favourably with the rest of the world.

In 2013, Australia’s ranking among the 34 developed countries comprising the Organisation for Economic Cooperation and Development (OECD) was seventh, behind South Korea, Switzerland, Norway, Japan, Germany and Mexico. By the end of 2015, after two failed Joe Hockey budgets, Australia’s ranking had slipped to 13th — overtaken by Iceland, Denmark, New Zealand, the USA, Israel and the United Kingdom.

Now, Australia’s ranking is at an all-time low of 16th, in the bottom half of the OECD table. Australia is now also behind Hungary, Czech Republic and the Netherlands.

Similarly, Australia’s job participation has been in the OECD’s top 10 for decades — until 2014. By the end of 2015, Australia’s ranking had fallen to 11th. It is now 13th.

Visionary initiatives?

In the 16 months while Cash has been minister what have been her three most significant initiatives to increase employment? OK, just two then? Well, has there been one? Hmmm …

Her counterparts, meanwhile, have been proactive and are reaping the benefits. New Zealand’s Paul Goldsmith has been spruiking and funding tourism in Rotarua, Southland and elsewhere. He has promoted economic activity in Tairawhiti and other growth centres. The Kiwi jobless rate has fallen from 5.5% a year ago to 4.9% in the third quarter of last year and 5.2% in the fourth quarter.
Canada’s incoming Employment Minister Patricia Hajdu received detailed instructions from PM Justin Trudeau along with specific targets. Hajdu has already acted to better prepare unemployed youth for work. Youth jobless in Canada is on a downwards trajectory, as is unemployment generally.

Turnbull must find someone urgently to take on the ministry as a full-time job.

Peter Fray

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