The MYEFO fudges imposed on a weak and shell-shocked Treasury by Treasurer Joe Hockey and his office back in December are being shown up in the run of recent data.
This time, it is employment.
The MYEFO forecasts from Mr Hockey were for employment to rise by 0.75 per cent over the year to the June quarter 2014. This was 0.25 per cent lower than the employment growth forecast that was published in the independently prepared PEFO in August. That 0.25 per cent, as will be clear, is about 30,000 jobs and in budget terms, a lot of money.
The ABS released the March labour force data yesterday and those numbers confirmed what most sober analysis was suggesting and that is a solid pick up in employment growth in recent months is well underway as the overall rate of economic growth accelerates.
The most recent labour force data mean that for the MYEFO employment forecast to be correct, monthly employment over April, May and June has to average growth of a puny 5,000. This may be correct, but it’s very unlikely. An average of 29,000 jobs were added over the last three months.
Given the momentum in economic growth, the rise in job advertisements and other labour market forward indicators, it is not unreasonable to expect average monthly employment increases of, conservatively, 15,000 a month over the next three months. If this is what happens, then the PEFO forecast of 1 per cent employment growth will prevail and the whole scam of cooking the books in MYEFO will be further exposed.
If the job creation of the March quarter is repeated in the June quarter, then annual employment growth will be nearer 1.25 per cent.
The end point is that the MYEFO numbers were the result of the new Treasurer, Mr Hockey, trying to make a lousy political point that had little to do with the true position of the economy.
The economy is doing well, really well in fact and we all should be delighted that jobs growth is picking up and the unemployment rate is ticking down. This is what, in my view, economic policy is all about. It is a pity that Mr Hockey prefers to play the petty debt and deficit political game.