Jobless rate falls to 5.4pc

Figures show jump of 32,600 part-time workers

THE jobless rate fell to 5.4 per cent in May, the lowest level this year, as 12,000 people found work in the month.

While fewer Australians found employment than had been expected by economists, the drop in the unemployment rate from 5.6 per cent in April was a surprise and partly reflected a fall in the number seeking employment.

The jobs figures reflected a 32,600 jump in part-time workers, which was partly offset by a 20,600 drop in full-time staff. The result does not change the interest rate outlook.

Many economists doubt there will be an increase in the cash rate until next year and that means the Reserve Bank won’t be about to join the US Federal Reserve, which lifted its key rate for the seventh time in the past few years on Wednesday.

Reserve Bank governor Philip Lowe said in a speech on Wednesday that conventional wisdom puts full employment in Australia about a 5 per cent unemployment rate.

Dr Lowe told a conference in Melbourne it was possible an even lower rate could be achieved if the 5 per cent mark was approached at a steady pace, rather than too quickly. “In a number of other countries, estimates of the unemployment rate associated with full employment are being revised lower as wage increases remain subdued at low rates of unemployment,” he told the Australian Industry Group lunch. “We have an open mind as to whether this might turn out to be the case here in Australia, too.”

The news was welcomed by Prime Minister Malcolm Turnbull (pictured), who described it as “another great day for jobs”.

“Jobs and growth is what we said in 2016 and we are delivering on it,” Mr Turnbull said yesterday. “We have got the policies that are building a stronger economy.”

Finance Minister Mathias Cormann said the next instalment of the Government’s plan would come before the Senate over the next parliamentary sitting fortnight when senators could vote for personal income tax relief and back a globally competitive company tax rate.

Both the remainder of the Government’s 10-year business tax plan and the multiphased, seven-year personal income tax package are due to be voted on in the Upper House from Monday.

“To keep our business taxes in Australia high when countries around the world are lowering theirs helps business overseas take jobs and investment away from Australia,” Senator Cormann said.