Thursday, July 13, 2006

Sunk already


Beazley ought to have a sinking feeling.

The May and June employment reports appear to have saved the Govt’s Workchoices bacon – certainly smirky pete was looking like the cat that got the cream when doing the post employment gloat on Thursday afternoon. In the previous two months, 99.7k jobs have been added: 72.5k full time jobs (+1%), and 27.2k part time jobs (+0.9%). The unemployment rate is 4.9%, on both trend and seasonally adjusted estimes, and vacancy data points to ongoing employment gains.

The Industrial relations laws had the potential to be the undoing of the government. Had the economy been headed into a downswing, freer ability to sack employees might’ve been a disaster. As it stands, I expect that the unemployment rate will be 4.5% before the 2007 election, and that real wages growth will be about 4%y/y. The Govt is not yet willing to attribute the gains to workchioces – for fear that the economy may turn, and that the downturn may be blamed on the policy, however we at merge-right need not be so coy.

Howard will beat Beazley in 2007. Unemployment will be at 30yr lows (prob below 4.5%), wages growth will be 4%y/y, and the Liberal campaign will be that unemployment is always higher under a labour govt – when the unions kick outsiders out of jobs, to the benefit of their members (who will be 15% of the private sector labour force by this time). By the 2010 election, it will be too late for a third round of roll-back.

Bye bye Beazley.

6 comments:

Matt Canavan said...

Check this out. Even when the Libs are not united, Kim's got no hope.

Rob said...

They've both got goals, Howard wants his 5th term - Kim wants his hat trick.

Chuck Norris said...

Matt,

What do you see as being the likely impact of rising CPI and underlying inflation on the government's prospects? The problem, as I see it, is that the government takes too much credit for low interest rates (when we know that the government has very limited control over interest rates at all). The government then has difficulty in explaining to the average person how, yes, they are responsible for low interest rates, but not responsible when interest rates increase (or as Howard likes to call it, an 'interest rate movement'). What do you think?

Further, do you have any prediction for the Fair Pay Commission's decision on the minimum wage, given the ACTU's claim for a 6% rise?

Matt Johnson said...

there's a good chance that the libs will loose if rates go past 6%. i predict that Costello will personally slap every quarantine loving national if they loose the election because of protection to the banana industry etc.

CPI itself isn't so bad - on core measures - but it's certainly at the level where the RBA will take out some insurance to make sure it doesn't leak into wage setting or other prices.

Anonymous said...

in the Aust today

Centrebet last night had the Coalition at $1.57 to win next year's poll while Labor was a less optimistic $2.25.

Matt Johnson said...

Another month, another 50k employment report. unemployment is at 4.8% - a 30yr low. and these are real gains as participation is record high levels (65%).

i'd be willing to bet that the bulk of these people are the poor folks who the labour party claims to represent. as Blair said: fairness starts with a job at work.

The only explanation for the present increase is that workchoices is giving people job - and therefore new life choices.