Malcolm Turnbull and Scott Morrison got a nice first-year anniversary present this week when Australia recorded its best unemployment rate for three years. Oddly however, they both ignored the news and preferred to talk about the deal they made with Liberal party room on superannuation.
When the ABS announced that the seasonally adjusted unemployment rate of 5.6%, the lowest since July 2013 – that is at any time during the Abbott/Turnbull period of government – you would have expected the boasting to have been long and loud.
And yet there was mostly silence.
The employment minister Michaelia Cash gave a brief press conference, and during Senate question time after questions from her own side on superannuation, defence, innovation and science she was asked about the figures – not exactly it a high priority.
Anyone who tuned into the House of Representatives question time, however, would have found nothing to enlighten them on the current state of the labour market. The prime minister was even given a nice broad question about the government’s “commitment to deliver economic security for Australians”.
In his response, the closest he came to talking of the figures was to note that “jobs are growing”.
That at least was closer than the treasurer came to mentioning the good figures. All Morrison wanted to talk about was the changes to the superannuation system.
The closest anyone came to talking about the actual situation of jobs was Christopher Pyne who told parliament that “we created over 200,000 jobs in the last 12 months” (it was actually 191,000 in trend terms or 180,000 in seasonally adjusted, so not quite 200,000 let alone “over”).
In both houses the big issue was the changes to superannuation.
The lack of attention on actual unemployment highlights the triumph of the “budget is the economy” argument, where anything that reduces the budget deficit is considered an inherent good.
It also highlights that despite the impressive overall unemployment rate, the employment situation is not that good.
Malcolm Turnbull suggested that “jobs are growing”, but mostly it is part-time jobs that are growing and even overall job growth is slowing dramatically.
Last year in the first eight months 191,000 jobs were created; this year it is just 83,900. The situation for full-time work is particularly bad – there are now 21,000 fewer full-time jobs than there were in December.
And August also saw a record set for the level of underemployed workers.
So it is no surprise really that the government was happy to focus on superannuation reforms which reduce the budget deficit.
And what was the upshot of these reforms?
The prime minister noted that 96% of people would be better off or unaffected. Among of those who will “benefit” are low-income earners who will profit from the government replacing the “low income super contribution,” which is worth up to $500 a year with the “low income superannuation tax offset,” which is worth up to ... err ... $500 a year.
And just how adversely affected the remaining 4% will be is up for debate.
The high-income-earner-friendly Australian Financial Review headlined an article on the policy with “Wealthy are the winners in Coalition’s superannuation deal”. It also led another article explaining what the “changes mean for you” by noting that “wealthy savers were granted a last chance to stash up to $540,000 from after-tax earnings before the end of the financial year”.
So you would be right in wondering just how big a hair cut the very wealthy will be having.
It’s worth noting that the savings to the budget are estimated to be roughly $3bn over the next four years. That sounds big until you realise Treasury estimates the amount of revenue foregone through superannuation tax concessions is around $140bn over that same period.
And the changes to the policy – which among other things saw a backflip on the proposal to impose a $500,000 lifetime limit on post-tax contributions – was not arrived at though some great bipartisan negotiation. The negotiation was all within the Liberal party room and effectively involved giving the disgruntled and very emboldened rightwing of the party room what it wanted.
The ALP will pass the changes – there is no reason not to – and there will be many a story about backflips or good deal-making, and others about how the government is at least making steps to improve the budget, and how important and good that is.
The government for the most part will welcome such stories – for they will spin the narrative as best they can. And better those stories than focussing on how for the employment situation looks a lots less buoyant than it was 12 months ago when Turnbull took office.
