Yahoo Finance Budget 2022: Josh Frydenberg’s ‘dangerous’ jobs gamble
Treasurer Josh Frydenberg needs money to pay for the 2022 Budget and is relying on Aussies getting back to work to make that happen.
The Government is predicting the unemployment rate will drop to 3.75 per cent by the September quarter this year.
That would mean an additional 1.2 million Australians in jobs, and around 770,000 off welfare payments.
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“With more people in work and less people on welfare, the budget bottom line is improving after providing unprecedented economic support to Australians,” The Australian revealed Frydenberg is expected to say when he presents the Budget tonight.
“But there is more to do … now is not the time to risk the gains we have made.”
Is the plan feasible?
The forecast for an unemployment rate of 3.75 per cent is in line with what the Reserve Bank of Australia is expecting.
Danielle Wood, CEO of the Grattan Institute, told Yahoo Finance that while Frydenberg’s plan was not unreasonable, it was also not guaranteed.
“We are in a very strange and unusual environment, which is making forecasting challenging, but it's not an unreasonable suggestion that we might see real wages growing from next year onwards,” she said.
“So it's not crazy, but it's not guaranteed.”
Wood said that because times were so uncertain, now may not be the right time for a Government to be relying on future forecasts.
“Forecasting is always challenging, but I think it is extra challenging at the moment,” she said.
“So, you don't necessarily want to be banking money that you're assuming you're going to get based on these forecasts,” she said.
“It's actually a time when there's an argument that Governments should be more careful because there are no guarantees and certainly assuming that [unemployment] will definitely [drop to 3.75 per cent] is dangerous."
Opposition Leader Anthony Albanese slammed the plan, saying the data shows the jobs Australians are taking are not sustainable.
“The reality out there is that there are almost 2 million Australians who want more work,” Albanese said in Canberra this morning.
“What we see is growth in the gig economy, a growth of casualisation, the growth of contracting out and labour-hire companies.
“What we don't see is a growth in secure work, a growth in the sort of jobs where people can get a mortgage, where people can plan to have a family. That's the problem with the pressures that are on the Budget.”
Albanese added that the Morrison Government was relying on the predicted lower unemployment rate to push wages higher.
But, Albanese said, a wage increase was not something the current Government could promise.
“This is a Government that can't be taken seriously in terms of looking after the interests of working people,” he said.
“And now, they say that wages are going to increase. Well, they've had 55 projections about wage increases during their terms in office. And 52 of them, they have missed.”
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