Continuing low unemployment
Since late 2003, Australia’s unemployment rate has remained around 5¾ per cent, levels only reached briefly once before in 23 years.
The percentage of the working age population now actually working is around the highest in 30 years. This is a major benefit of ongoing reforms to labour and product markets and of better macroeconomic management over recent years.
Unemployment has fallen in both regional areas and capital cities, despite the fall in agricultural employment due to the drought.
Low unemployment is good for the economy. It means higher national income and a stronger budgetary position. But, more importantly, it helps improve the wellbeing of Australians through higher family incomes, less poverty and the increased social engagement that employment helps to create.
Australia’s unemployment rate is now significantly below the average for the OECD developed nations, which stands at around 7 per cent. This is in sharp contrast to the early 1990s, where Australia’s unemployment rate was at times 3 percentage points higher than the OECD average.
The prospects for maintaining low unemployment are strong. Budget forecasts show the unemployment rate remaining below 6 per cent over the forecast horizon.
Maintaining strong employment and lower unemployment rates over the medium term will depend on continued growth in the economy. Sustainable growth requires strong economic policy leadership and an ongoing commitment to the reforms of the type pursued by the Government.