ABS head David Kalisch said he stood by the "overall quality of the numbers", but this did not mean the bureau wasn't undertaking continuous improvements.

"We certainly share Bill's view about the importance of the labour force survey," Mr Kalisch said. "We have done some work and had some work commissioned to investigate a number of the aspects he raised with us.

"It's something we'd keep under review, but at the end of the day there is nothing at this stage that causes us alarm or points to a major issue that needs to be addressed."

Year of doubts

Doubts about the quality and reliability of the monthly jobs survey erupted just over a year ago after several months of big swings in the underlying employment figures.

ABS chief David Kalisch: "At the end of the day there is nothing at this stage that causes us alarm or points to a major issue that needs to be addressed." Rohan Thomson

Economists questioned the abnormal monthly falls and gains in employment, and officials announced a review last October of the survey's methodology. The review made 16 recommendations, including replacing the computer system used to crunch the data.

The saga continues to overshadow the jobs data. Economists expect Thursday's employment report to show the jobless rate was unchanged at 6.2 per cent in September and 7100 jobs were created. Analysts and investors will almost certainly question any figure that deviates significantly from those forecasts.


Even more heavily traded on currency markets than the bureau's quarterly consumer price index and national accounts reports, the labour force survey is a critical factor in the Reserve Bank of Australia's interest rate decisions. The employment data are also central to political debates around the nation, with both sides using changes to attack their opponents.

However, doubts about their credibility mean that policymakers both at Treasury and particularly the Reserve Bank have moved towards relying on private sector measures – such as ANZ Bank's job ads, National Australia Bank's business conditions survey and alternative indicators such as welfare payments – to gauge the strength of the labour market.

The jobs survey is one of the bureau's oldest and consumes around 6 per cent, or $14 million, of its annual budget, making it among the most costly.

Results 'crook'

Mr McLennan, who recalls driving around western NSW in a Land Rover during the 1960s as the survey was being established, and who headed Britain's statistics bureau in the early 1990s, slammed the ABS's decision to change its questionnaire without doing the due diligence of a parallel survey using the old methodology to gauge the impact of the adjustments.

While he said the changes made by the bureau were commendable, as they increase the complexity of labour force information, failure to test them in practice meant it was inevitable the results would be "crook".

"My experience tells me that when you make changes like that, you get different responses," Mr McLennan said. "What they're doing now is breaking all the principles under which the survey was done."

He said last year's review failed to address the underlying problem, which is that since early 2014 the ABS has effectively produced a different statistical series to what existed previously.


"The impact of the various seasonal breaks needs to be measured separately, but there don't seem to be any plans to do so," Mr McLennan said. "The implication from this is that the ABS will continue to have difficulties producing believable seasonally adjusted estimates of the labour force data.

"It will take at least three years before new seasonal factors can be properly determined, but more like five years before they are stable."

Mr McLennan said if funding constraints at the cash-strapped bureau didn't allow for testing – something the bureau has suggested before estimates hearings – the changes should never have been implemented.

However, Mr Kalisch indicated the ABS has no intention of scrapping a so-called supplementary survey of the labour force – as recommended by Mr McLennan – because "going turkey" in this way would deny information that many people find useful and leave a gap in seasonal adjustment for several years.

"We recognise [there] was a problem, but I have to say that the independent reviewer provided different recommendations as to what Bill proposes as the way forward.

"We don't believe there is a major problem with our monthly adjustments now, so why would we induce a problem for the next three to five years?"

Mr Kalisch said he thinks the jobs numbers are "quite believable" and cited feedback from private sector economists who believe recent survey results square with their own view of the economy.

"Certainly Treasury and the Reserve Bank have raised no issues with us about the labour force survey," he said.

On another matter, late on Wednesday and almost a month since Prime Minister Malcolm Turnbull was sworn in, it is still unclear who has ministerial responsibility for the ABS.