Job figures and the art of cherry-picking

Government and opposition are masters at finger-pointing, says Martyn Goddard

IF you ever feel tempted to trust a politician, choose a topic other than jobs and the economy.

Whoever is in government claims any improvements are all their own work. Whoever is in opposition claims things aren’t so good after all. Both blatantly cherry-pick their figures and hope the electorate never finds them out.

Predictably, this month’s employment figures — when nothing of significance actually happened — triggered yet another example from Tasmanian Treasurer Peter Gutwein.

“ABS figures released today show there has been a massive increase in employment under the Liberals,” he said.

“Over the last 12 months alone, 5700 new jobs have been created.”

Last month, nothing much happened with employment figures either. “The Liberals are in complete denial as the Tasmanian economy haemorrhages full-time jobs,” Labor’s shadow treasurer Scott Bacon said. “We’ve lost 2100 full-time jobs since last year.”

The truth about jobs, and the state economy more broadly, is more complex than either side wants you to think. And neither side has performed well.

Full-time employment, in line with the rest of the economy, moves in long cycles largely divorced from shortterm politics. It reached a trough in 1998, improved steadily to a peak in 2009, then fell again to a trough in 2013 before, once again, starting the long and slow climb back up.

Retail turnover figures show the same pattern.

The broadly accepted fiscal strategy is for governments to seek to balance their budgets over the economic cycle, increasing spending when conditions are weak and making savings when prosperity returns.

But Labor and Liberal governments have consistently cut spending at exactly the wrong time, when the economy is clearly in need of a boost. In the early 1990s the Field government slashed spending just as a deep recession was hitting. The incoming Bacon Labor government a few years later rode an economic upturn in the late 1990s, its budget restrictions took money out of the economy and inevitably weakened the recovery.

In 2011 the Giddings government slashed government spending when the economy was in its weakest state for many years. It contributed to unemployment and inflicted serious damage on productive services like health and education.

The eventual upturn was the product of many national and global as well as local factors and coincided, about a year before the state election, with the partial reversal of the 2011 cuts.

The new Liberal government did just what three Labor governments did. It is a reflection of the inability of state governments to greatly influence their economies that, in spite of savage budget cuts and mass public service sackings, the recovery continued — though predictably at a slower, weaker pace than would otherwise be the case.

Despite all this, Labor and Liberal governments have claimed credit for job creation and prosperity, none more so than the Hodgman government. But are those claims justified?

In fact, the number of hours worked in Tasmania, the most revealing measure of available work, has now stalled.

This state’s recovery from a deep but short-lived downturn now shows many signs of faltering.

This is the time the government should be stimulating the economy by investing in labour-intensive services like health and housing.

The crises in both these areas reveal only part of the damage inflicted by the shortsighted, out-of-phase approach to budgeting that seems to afflict all Tasmanian politicians, regardless of party.