12/03/2009 - 09:23

WA jobless rate jumps to 4.2%

12/03/2009 - 09:23


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Western Australia's spike in unemployment to a two-year high has one business lobby group urging federal MPs to carefully consider the government's proposed Fair Work Bill ahead of next week's vote.

Western Australia's spike in unemployment to a two-year high has one business lobby group urging federal MPs to carefully consider the government's proposed Fair Work Bill ahead of next week's vote.

Latest figures from the Australiabn Bureau of Statistics show that WA's jobless rate in February reached a seasonally adjusted 4.2 per cent, up from the previous month's 3.3 per cent.

WA recorded the largest jump percentage wise but still holds the lowest unemployment rate compared to other states.

Chamber of Commerce and Industry WA chief executive James Pearson said although the jobless figure shows the state is not immune from the global financial crisis, it does tell a number of positive things.

"One of them is that business in this state has created 2000 new jobs in the last month," Mr Pearson said.

"And it also tells us that the participation rate has increased and that probably reflects that people such as retirees for example getting back into the workforce looking for work.

"Because full time employment has fallen, the proportion of part time employment has increased and what that suggests to us is that employers are reluctant to lay off workers and where they're able to, opting for other solutions such as reducing the hours for their current workforce."

The state's employment participation rate for February was up from 68.4 per cent to 69 per cent.

Females recorded an unemployment rate of 4.7 per cent, up from 3.7 per cent, while the male jobless rate was 3.8 per cent, up from 3.1 per cent recorded in January.

The number of people in full time employment dropped from 844,700 to 830,000, which was a nine-month low.

WA's latest jobless rate is the highest since December 2005, when it reached a seasonally adjusted 4.3 per cent.

Mr Pearson said governments at both the state and federal levels had a critical part to play in helping business create jobs.

"At a state level, the obvious thing that the state government can do is take the long overdue step to reform payroll tax," he said.

"Its well understood that the payroll tax is a tax on growth and imposes a financial penalty on small businesses as they grow beyond a certain size and it penalises employers for employing more people."

"Secondly and this really applies at a federal level, we really need to be sure that the fundamental changes that the government is making to our industrial relations system not reduce the flexibility and responsiveness of business while also adding to the cost of employment, particularly at a time when businesses can least afford it."

Nationally, the unemployment rate was a seasonally adjusted 5.2 per cent in February, compared to an unrevised 4.8 per cent in January.

Total employment rose by 1,800 to 10.81 million seasonally adjusted.

Full-time employment decreased by 53,800 to 7.664 million and part-time employment was up 55,600 to 3.146 million.

The participation rate in February was 65.5 per cent, compared with 65.3 per cent in January.

Economists had expected total employment to decline by 20,000, a jobless rate of 5.0 per cent and a participation rate of 65.0 per cent.

In Victoria, the unemployment rate rose to 5.6 per cent from 4.8 per cent, in NSW the jobless rate rose to 5.8 per cent from 5.5 per cent and in South Australia it increased to 5.8 per cent from 5.6 per cent.

In Queensland it rose to 4.5 per cent from 4.4 per cent.

The rate in Tasmania was unchanged at 4.5 per cent, as was the case in the Northern Territory which recorded a 3.9 per cent jobless rate and the ACT which posted a rate of 2.4 per cent.

Economists say the unemployment rate is set to climb further as the consequences of a weakening global economy continue to wash up on these shores, but disagree on the speed at which the unemployment queue is set to lengthen.

CommSec chief economist Craig James said Australia was not in the same position as some overseas economies.

"Businesses are spooked by what is happening in the US and Europe and have cut back on hiring new workers," Mr James said.

"But businesses certainly aren't slashing and burning."

Westpac Banking Corporation senior economist Anthony Thompson said the "writing is on the wall as far as the labour market outlook is concerned", given the decline in full-time jobs.

Mr Thompson said leading indicators of employment implied there would be a more rapid deterioration in employment growth through 2009.

"It remains a matter of when, not if, for some inevitable payback for this recent apparent resilience," Mr Thompson said.

JPMorgan economist Helen Kevans said the participation rate was likely to decline slowly, putting upwards pressure on the unemployment rate.

"This is mainly because of elevated skilled migration flows and older workers staying in the workforce longer than they had planned to compensate for the fact that their retirement funds have dwindled," Ms Kevans said.

JPMorgan's forecast was for the unemployment rate to peak at 9 per cent at the end of 2010, a view Ms Kevans said was supported by the "avalanche" of anecdotal job losses announced recently.

"The risks to this forecast are to the upside given that during Australia's last two recessions, in the early 1980s and early 1990s, the jobless rate ventured into double-digit territory," Ms Kevans said.

The federal government has forecast the unemployment rate to reach 5.5 per cent by June this year before climbing to 7 per cent by June 2010.


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