Outside of Victoria the number of hours worked has almost returned to where it was – nowhere near where it would have been, but almost where it was.
Employment figures released as Treasurer Josh Frydenberg was unveiling the mid-year budget update show 1,298 billion hours were worked outside of Victoria in November, just a whisker short of the 1,303 billion worked in March, before things went south.
Monthly hours worked in all jobs, excluding VictoriaABS Labour Force, Australia
Eagle-eyed readers will note that hours worked were turning down before the coronavirus hit. They peaked in September last year.
Victoria itself has bounced back sharply from the lowpoint of its lockdown in August.
Then it put in 417 billion hours of paid work. In November, with its lockdown over, it put in 453 billion, not too far sort of its peak of 476 billion before things turned bad.
Frydenberg says 85% of the 1.3 million Australians who either lost their jobs or saw their working hours reduced to zero are back at work.
With more people back in jobs more quickly, and people leaving JobKeeper more quickly than expected in the October budget, the projected deficits will be somewhat smaller, peaking at just under A$200 billion this financial year instead of just over A$200 billion as expected in October.
The budget will still remain in deficit for as long as anyone can forecast, at least ten years, and even after that the government’s net debt will still exceed one third of gross domestic product, although falling interest rates will mean net interest payments start to fall before net debt does.
Some government loans cost it 5% to 5.75% per year in interest. As they expire in the next the years they will be replaced by loans costing 1% or less, and in some cases less than zero, where bidders for bonds offer negative interest rates.
Soaring iron ore prices have pushed up estimates of this year’s company tax take from the $84.5 billion expected in October to $87.9 billion.
At the time of the budget on October 6, the “cost and freight” spot iron ore price (which includes the cost of getting to it to the buyer) was near US$120 a tonne. In the ten weeks since it has climbed to more than US$150 a tonne.
Spot iron ore price, US$ per tonne, cost and freight
- ^ mid-year budget (budget.gov.au)
- ^ 1,298 billion hours (www.abs.gov.au)
- ^ V-shaped (thenewdaily.com.au)
- ^ It isn't right to say we are out of recession, as these six graphs demonstrate (theconversation.com)
- ^ MYEFO (budget.gov.au)
- ^ ten years (www.aph.gov.au)
- ^ negative (theconversation.com)
- ^ cost and freight (www.investopedia.com)
- ^ marketindex.com.au (www.marketindex.com.au)
- ^ free-on-board (www.investopedia.com)
- ^ ramps up production (www.afr.com)
- ^ Robodebt was a policy fiasco with a human cost we have yet to fully appreciate (theconversation.com)
- ^ Appendix A (budget.gov.au)
- ^ Robodebt (www.smh.com.au)
Authors: Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University