Much of the acceleration in employment is due to the rollout of the National Disability Insurance Scheme introduced by Labor

Economists say it has been a stellar year for Australia’s labour market, with a near-record 383,000 jobs created.

Malcolm Turnbull has taken credit for the job surge, saying the Coalition’s policies have restored confidence to business, and business has responded by “hiring more workers”.

But where have the jobs come from?

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According to JP Morgan economist, Tom Kennedy, nearly two-thirds of the new jobs have come from two industries – healthcare and social assistance (130,000 jobs), and construction (104,000 jobs) – and the policy groundwork for those jobs was laid a few years ago.

Healthcare and social assistance

In the past year, healthcare has accounted for more than 35% of economy-wide employment growth, despite the sector comprising just 13% of employment.

Kennedy says much of the acceleration in employment and participation in the sector is the result of hiring and participation spillovers related to the rollout of the National Disability Insurance Scheme.

The NDIS was introduced in 2013 by the Gillard Labor government, and after a lengthy pilot program, began national roll out in July 2016.

The exact effect of the NDIS on employment growth has been hard to calibrate, Kennedy says, but its influence became “pronounced” from 2015, with the pattern of rising healthcare jobs in New South Wales, Victoria and Queensland matching the uneven roll-out of the NDIS.

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Kennedy says it is clear the rollout has had a noticeable impact on female participation, since the healthcare and social assistance sector is so female-dominated.

Bureau of Statistics figures show the female participation rate jumped 1.5 percentage points in the last three years – it’s now at a record-high 60.2%.

Kennedy posits that since an increasing number of NDIS providers are taking some of the care load, it has allowed informal care-givers who had previously left the labour force to care for family members to re-enter the labour force to look for paid employment.

“It is hard to be precise on labour supply implications, but there are more than 2.5 million informal care-givers in Australia, the bulk of whom are women, so it is likely the introduction of the NDIS has been influential in driving female participation higher,” Kennedy told clients recently.

“Indeed the NDIS Agency reports data on participation of the family members of its participants, which does show some increase under the scheme. Of course, the employment impact of the labour supply that is released will be measured across all sectors, not just healthcare.”

Construction

Economists say the construction industry has been the other noticeable job creator in the past 12 months, thanks to home-building and government infrastructure cycles.

Commonwealth Bank economist Kristina Clifton says public infrastructure spending as a share of GDP has been rising at both state and federal levels, while the so-called “construction rotation” has been picking up steam.

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“As a share of GDP, total state infrastructure spending has been trending higher since early 2016, with a particularly strong lift in the second quarter of 2017 as a major hospital in South Australia was completed and transferred to public ownership,” she wrote in a note to clients recently.

“Spending has been rising in all states with Victoria, South Australia and Tasmania the standouts. Infrastructure spending at the federal level has also been inching higher. Together the state and federal budgets imply an $8.1bn lift in capital expenditure in 2017-18.”

Clifton says the transport was a key feature of the 2017-18 federal budget, including $75bn in transport infrastructure over the next 10 years. “This is significantly higher than the $10.3bn of transport spending in the previous 10 years.”

She said the decline in output and employment from the residential construction downturn was more than offset by the impacts of higher residential alterations and additions, non‑residential building work and public infrastructure construction activity.



“On a net basis the construction rotation will add around 62,500 new jobs over 2017-18 and 2018-19,” she said.