By Leith van Onselen

The Australian has today revealed that the Abbott Government has sought to massage the Department of Employment’s employment projections so that they reflect the Government’s pledge to generate one million jobs over five years:

Ministerial advisers encouraged federal officials to “massage” their economic forecasts to match Tony Abbott’s vow to create one million jobs over the next five years… Asking department experts to adjust their figures, the advisers to Employment Minister Eric Abetz sought to add 160,000 jobs to the projections due this week… The exchanges, revealed to The Australian, highlight the government’s anxiety about jobs growth as it fights off Labor attacks over layoffs at big companies including Qantas, Ford, General Motors Holden and Toyota… The labour market analysts dumped their original projections for 838,100 new jobs over the next five years and replaced it with the higher figure suggested by the minister’s adviser, Josh Manuatu.

Late last year, Employment Minister, Eric Abetz, trumpeted that the Government would deliver a “powerhouse economy” that will produce 1 million jobs over five years and 2 million jobs over 10 years.

What makes this latest intervention by the Government most interesting is that its one million jobs target over five years would, in fact, be a mediocre outcome.

For starters, the promised one million jobs – or roughly 16,670 jobs per month – would be below the 17,200 jobs per month created in the decade to February 2014, which also included the fallout from the Global Financial Crisis.

It must also be remembered that this level of jobs creation would also be off a much bigger base than was experienced previously. To illustrate, the 2,066,300 jobs created since February 2004 was on a starting jobs base of 9,464,500, representing jobs growth of 21.8%. If the Abbott Government achieved its one million jobs target from September 2013, it would represent jobs growth of only 8.7% on a starting base of 11,469,500 jobs.

Finally, Australia’s population is currently growing very strongly, which (other things equal) means that employment must grow more quickly in order to absorb the additional workers.

With the mining capex cliff approaching, along with the shuttering of Australia’s automotive assembly industry by 2017, the government’s low ambitions are wise.

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