Mr Morrison doesn’t believe his Treasurer’s budget numbers – or he is making things up

Tue, 29 Jan 2019  |  

Prime Minister Scott Morrison has given a commitment that a Coalition government would create 1.25 million new jobs over the next 5 years.

Specifically, Mr Morrison tweeted, “I’m making a new pledge for our Government, to see 1.25 million jobs created over the next 5 years”.

This is a bold claim on any measure. Alas for Mr Morrison, the claim is at odds with his Treasurer's recent MYEFO estimates which included a series of forecasts and projections for employment growth over those 5 years. It is easy to cross check. Using Treasurer Josh Frydenberg’s forecasts in MYEFO, cumulative employment growth over the next 5 years will be just 954,000, some 296,000 below the figure that Mr Morrison seems to have plucked out of the air.

The 954,000 is calculated the following way:


December 2018 is the base or benchmark for the 1.25 million jobs to be created. Employment in December 2018 was 12.714 million.

Next step is to interpolate the MYEFO forecast for 1.75 per cent employment growth between the June quarter 2018 and the June quarter 2019 to get a June 2019 estimate for employment. 

Next add to that number 1.75 per cent employment growth for 2019-20, then add 1.5 per cent employment growth for each of the next 3 years to get an estimate for the level of employment in June 2023. 

To get the final 6 months of the 5 year projection, next add 0.75 per cent to that level (half the 1.5 per cent annual employment growth projected for 2023-24) to get an estimate for employment in December 2023 - 5 years from now.

There are some small - in fact tiny - rounding issues using estimates for quarterly employment levels to pin-point a monthly number in 5 years, but even rounding those estimate up, Mr Frydenberg’s MYEFO employment forecasts and projections suggest the Coalition would create just 954,000 jobs over the next 5 years.

I wonder where Mr Morrison got his numbers from? 

comments powered by Disqus

THE LATEST FROM THE KOUK

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

Tue, 07 Jan 2020

This article first appeared on the Yahoo Finance web site at this link: https://au.finance.yahoo.com/news/the-governments-test-in-2020-220310427.html   

---------------------------- 

The misplaced objective of the government of delivering a surplus, come hell or high water, has gone up in smoke

For many people, the cost of the fires is immeasurable. 

Or irrelevant. 

They have lost loved ones, precious possessions, businesses and dreams and for these people, what lies ahead is bleak.

Life has changed forever.

As the fires continue to ravage through huge tracts of land, destroying yet more houses, more property, incinerating livestock herds, hundreds of millions of wildlife, birds and burning millions of hectares of forests, it is important to think about the plans for what lies ahead.

The rebuilding task will be huge.

Several thousands of houses, commercial buildings and infrastructure will require billions of dollars and thousands of workers to rebuild. Then there are the furniture and fittings for these buildings – carpets, fridges, washing machines, clothes, lounges, dining tables, TVs and the like will be purchased to restock.

Then there are the thousands of cars and other machinery and equipment that will need to be replaced. 

What's ahead for the Australian economy and markets in 2020

Thu, 02 Jan 2020

What's ahead for the Australian economy and markets in 2020

Happy New Year!

2020 will be a year where Australia’s annual GDP will exceed $2 trillion, our population will get very close to 26 million people and we will clock up 29 years with no recession.

It is also a year where the economy will be a dominant issue for policy makers, will drive what happens to interest rates, will help drive investment returns and will feed into the well-being of the Australian community. 

2020 kicks off with relatively good news in terms of economic growth, even though the labour market is likely to remain weak, with wages growth struggling to lift and inflation remaining below the RBA’s 2 to 3 per cent target. The Reserve Bank may have one more interest rate cut in its kit bag, but by year end, the market is likely to price in interest rate increases, albeit modestly.

The ASX, which had a great 2019 is set to be flatten out, in part driven by the change in the interest rate outlook, but it should get a boost from better news on housing and household spending.

In terms of the specifics, I have broken down the 2020 outlook into a range of categories and given a broad explanation on the issues underpinning the themes outlined.

GDP Growth

It’s a positive outlook. A pick-up in GDP growth from the current 1.7 per cent annual rate is unfolding, with the only real issue is the extent of the acceleration.