JOBS FIGURES WELCOME BUT NSW STILL IN TROUBLE

JOBS FIGURES WELCOME BUT NSW STILL IN TROUBLE

15 May 2009

The improvement in the state’s jobless figures released recently is welcome news, but NSW is still at risk of increased unemployment as the state’s AAA Credit Rating hangs in the balance.

The NSW unemployment rate fell seasonally adjusted to 6 per cent in April, but remains well above the national average at 5.4 per cent. NSW has the second highest unemployment figure, just behind Tasmania and the trend rate continues to rise going from 6.2 to 6.3 per cent. The NSW jobless figure has been above the national rate since September 2005.

The frightening position for NSW is the state is performing poorly on a range of economic indicators and has been for several years.

As Access Economics detailed last week:

‘There is no state economy in worse shape in Australia right now than NSW. Its economic landscape more closely resembles somewhere in the UK or the US, and it almost seems like economists are searching through the rubble looking for businesses with a pulse’. (Access Economics, Business Outlook, p.95)

Unfortunately, one of the key factors determining where the jobless figure heads will be whether NSW can keep its AAA rating.

Even Treasurer Roozendaal in last year’s Mini-Budget stressed the point:

‘Perhaps the largest cost of a credit rating downgrade would be its effects on business confidence. This would reduce the relative attractiveness of the State as a destination for investment with resultant negative effects on economic activity and employment in the State.’ (Mini-Budget 2008-09)

The upcoming State Budget will be crucial as the ratings agencies have indicated they will be looking for the Government to be financially disciplined.

It is the ultimate hypocrisy of the Premier to then criticise the Opposition for committing to keeping expenditure growth in line with revenue growth when that is what is needed to retain the credit rating.

Most notably, it is also the approach adopted by the Victorian Labor Government in their Budget this week. They also included initiatives the NSW Liberal/Nationals have been arguing for here, such as fast tracking major projects and additional investment in infrastructure – particularly public transport.

Until we see sound financial management from the Rees Labor Government and policies which boost jobs, no one can take comfort in a single month’s fall in the unemployment rate.

Lismore Contact Details:

Office: 55 Carrington Street  LISMORE
Postal: PO Box 52  LISMORE  NSW  2480
Telephone: 02 6621 3624
Facsimile: 02 6622 1403
Email: lismore@parliament.nsw.gov.au

Murwillumbah Contact Details:

Telephone: 02 6672 7577