{"id":202168,"date":"2025-10-10T05:19:10","date_gmt":"2025-10-10T05:19:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/202168\/"},"modified":"2025-10-10T05:19:10","modified_gmt":"2025-10-10T05:19:10","slug":"will-government-austerity-end-the-jobs-boom","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/202168\/","title":{"rendered":"Will government austerity end the jobs boom?"},"content":{"rendered":"

Australia\u2019s \u2018miracle\u2019 jobs market has been a fool\u2019s paradise.<\/p>\n

The unprecedented boom in government-funded jobs has driven Australia\u2019s job growth and historically low unemployment rate.<\/p>\n

\"filled<\/p>\n

The non-market sector, comprising public and private service providers that rely on government funding, accounted for around 60% of total job creation since the pandemic and nearly 80% of job creation over the past two years.<\/p>\n

This non-market job growth has been driven by the $52 billion blowout in the National Disability Insurance Scheme (NDIS), which has fueled the growth of carer jobs.<\/p>\n

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\"Carer<\/p>\n

As a result, the nation\u2019s unemployment rate remains historically low at 4.2% and the Reserve Bank of Australia (RBA) expects unemployment to remain at this low level for the next two years.<\/p>\n

\"RBA<\/p>\n

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The clear and present danger is that non-market job creation stalls (or the sector loses jobs) and there is insufficient handover to the private sector.<\/p>\n

Given the persistent strong growth in the labour force due to continually high net overseas migration, such a scenario would indicate a significant increase in unemployment.<\/p>\n

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Alternative indicators of the labour market are looking shaky.<\/p>\n

Roy Morgan\u2019s alternative measure of unemployment and underemployment has risen sharply over the past year:<\/p>\n

\"Roy<\/p>\n

The various job ad surveys also point to rising unemployment:<\/p>\n

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\"Unemployment<\/p>\n

State and federal budgets are stretched, resulting in cost-cutting and austerity\u2014neither of which is helpful for non-market employment.<\/p>\n

<\/p>\n

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For example, in its most recent state budget, the Victorian government revealed plans to reduce 2,000 to 3,000 public sector jobs, with projections<\/a> indicating that the government might lay off up to 6,500 workers.<\/p>\n

The New South Wales government recently announced<\/a> that more than 1,500 jobs would be axed.<\/p>\n

Reports indicate<\/a> that federal government departments are confronting \u201cfunding cliffs\u201d that could lead to the loss of thousands of jobs.<\/p>\n

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For example, the Health Department\u2019s budget is expected to decrease from $1.69 billion in 2024-25 to $893 million in 2027-28, while the Energy Department\u2019s funding is expected to shrink from $357 million in 2025-26 to $180 million in 2028-29.<\/p>\n

The most severe budget gaps are expected to occur between 2026 and 2027, when financing for up to 100 programs will expire.<\/p>\n

The federal government is also under tremendous pressure to reduce the cost of the NDIS, which has been the primary driver of the large increase in non-market employment.<\/p>\n

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<\/p>\n

Australia\u2019s non-market job boom, therefore, appears to have ended amid nascent austerity measures.<\/p>\n

With Australia\u2019s private sector failing to fire up and the government continuing to import hundreds of thousands of migrant workers each year, there is a real possibility that the country\u2019s unemployment rate rises well beyond the RBA\u2019s forecast.<\/p>\n

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Unemployment is the single biggest downside risk for Australian interest rates.<\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s \u2018miracle\u2019 jobs market has been a fool\u2019s paradise. The unprecedented boom in government-funded jobs has driven Australia\u2019s…\n","protected":false},"author":2,"featured_media":202169,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-202168","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/202168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=202168"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/202168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/202169"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=202168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=202168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=202168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}