NO.085

THE UNEMPLOYMENT RATE FALLS TO A 30-YEAR LOW

Today’s Labour Force Survey shows that the unemployment rate was 4.8 per cent in July, down from 4.9 per cent in June. This is the lowest unemployment rate in 30 years, and has brought the number of unemployed to its lowest level in over 16 years.

The fall in the unemployment rate is due to a rise in the number of employed persons of 50,700 (of which 27,100 were full-time). This builds on the solid rises of 53,700 employed persons in June and 48,500 in May, bringing the tally of new jobs created over the past year to 219,500.

The ABS note that the July employment number may include some employment generated by the training of temporary staff for the ABS 2006 Census.

Over 1.9 million jobs have been created since this Government came to power.

Furthermore, the strength in employment growth over the last ten years has had a significant impact on the long-term unemployed, whose ranks have more than halved since March 1996.

The participation rate is now at 65 per cent – the highest level since the commencement of the Labour Force Survey. This increase in participation is particularly welcome and endorses a number of policies the government has implemented to lift both participation and productivity.

These include policies to provide better incentives to work, through cuts in personal income tax, welfare reform and more flexible retirement income arrangements. We are improving the capacity for work through better health care and education. We are also improving the flexibility of the workplace, and working to enhance Australia’s productivity performance.

These policies will allow more people to take advantage of the opportunities opened up by a buoyant labour market, with the intention of increasing the proportion of Australians in employment beyond the current record level of 61.9 per cent.

Australia is now achieving an enviable combination of economic growth, low unemployment and relatively low interest rates. This impressive record underlines the Government’s sound economic management. To maintain these impressive gains into the future, it is essential that we do not allow wage increases beyond those warranted by productivity improvements.

CANBERRA

10 August 2006

Contact: Renae Stoikos

02 6277 7340