Australia's jobs miracle proves to be all government work

Pedestrians walking through Sydney's central business district. All the gains in employment for the year to February were in the public sector, some 292,900 in all.
Pedestrians walking through Sydney's central business district. All the gains in employment for the year to February were in the public sector, some 292,900 in all.PHOTO: REUTERS

SYDNEY (REUTERS) - Governments of all stripes like to take credit for the jobs created in an economy, but in Australia's case it is literally true.

According to figures from the Australian Bureau of Statistics (ABS) all the gains in employment for the year to February were in the public sector, some 292,900 in all.

By contrast, private sector jobs actually shrank by 8,300.

The reliance on government to generate jobs could be a potential headache for the Reserve Bank of Australia (RBA), which has been counting on continued gains to offset sluggish wages and falling home prices.

"While the RBA still sees the labour market as "strong", jobs in the last year were entirely driven by the public sector, with the private sector flat, the worst outcome since the global financial crisis," said George Tharenou, an economist at UBS.

Earlier this week, the central bank signalled a cut in interest rates might be needed should employment not continue to improve as it expected.

The official data cast a new light on Prime Minister Scott Morrison's oft-repeated boast that it was his Liberal National government that was responsible for record jobs growth in recent years.

 
 
 

Morrison is currently on the campaign trail ahead of an election on May 18, and could well lose power to the opposition Labor Party if opinion polls are to be believed.

The strength of the labour market has been a key selling point for Morrison, though the centre-right politician never dwells on the fact that the new jobs created were public ones.

Much of the surge in public jobs came in professional positions which leaped almost 136,000 in the 12 months to February - and by 107,000 between August and November alone, the ABS data showed.

Community and personal service workers added over 57,000 net new positions, while clerical and administrative positions grew by 75,000.

In all, public jobs reached 1.9 million at the end of February, while the private sector employed 10.9 million.

The ABS releases its labour force report every month but the detailed breakdown by occupation only comes out quarterly.

The latest report for March showed employment rising by 25,700 and a jobless rate near eight-year lows of 5.0 per cent, but contained no breakdown by industry.