Full Employment

Australia's Recent Performance

The rate of unemployment has generally fallen during the last 10 years. In 1996/7 there was a slight increase in the rate of unemployment. This was due in part to a fall in business confidence. However, a fall in the value of the AUD in the following years helped to increase exports, which resulted in significant gains in the export sector.

The rate of unemployment in Australia

Another small increase was experienced in 2001/2. Once again, this coincides closely with a fall in business confidence associated with the introduction of the GST. This increase can be explained in part by businesses taking a “wait and see” approach to the New Tax System – once the system had been accepted by the Australian public a return to lower rates continued once again.

In the second half of 2003 the unemployment rate fell below 6%. This was the first time in many years that the unemployment rate had been this low. By the end of 2004 the rate had fallen to 5.1%, and by the end of 2006 the unemployment rate was steady at 4.6% - a figure which has not been achieved in Australia for many decades. This figure continued to fall in 2007; the rate went as low as 4.2% in September of that year.

Unemployment was a key issue in the election campaign of 2007. Shortly after the election, a small increase in the unemployment rate was recorded; in early December 2007 a rate of 4.5% was announced. More significant was the outlook published at that time. For the first time in many years, economists expected the Australian unemployment rate to increase in 2008. As it turned out, the unemployment rate experienced only a very small increase in that year, peaking at 4.4% in December after falling to 4.3% during the year. Many economists are now predicting that an increase is almost certain during 2009, with one newspaper headline in December 2008 declaring that 250,000 jobs will be lost in the following twelve months.

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