Abbott promises low jobs growth

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By Leith van Onselen

Coalition leader, Tony Abbott, today made the ‘ambitious’ pledge that a Coalition government would deliver 1 million new jobs in its first five years in office and 2 million jobs should it remain in power for ten years. From the Australian:

TONY Abbott has sought to counter claims he has no positive vision for the country in a final party room briefing for the year, vowing to create one million jobs in the first five years of a Coalition government..

Under a Coalition government, economic reform would start with getting rid of unnecessary taxes – such as the carbon and mining taxes – and removing $1 billion a year of business red tape, Mr Abbott said.

“If we can do what we have pledged to the Australian people that we will strive to deliver and I am so confident that we can we will deliver a million new jobs over five years, two million new jobs over a decade,” Mr Abbott said.

While the promise to deliver 1 million jobs in its first five years in office – or around 16,670 jobs per month – sounds impressive, in actual fact it isn’t.

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In the five years since October 2007 – a period that included the fallout from the Global Financial Crisis – Australia managed to generate some 872,000 jobs, or some 14,500 jobs per month (see below chart).

This level of jobs creation was also off a much lower base than would be inherited by any Coalition government. To illustrate, the 872,000 jobs created since October 2007 was on a starting jobs base of 10,651,000, representing jobs growth of 8.2%. If an Abbott Government was elected tomorrow and subsequently achieved its 1 million jobs target, it would represent jobs growth of only 8.7% on a starting base of 11,523,000 jobs.

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Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.