On Thursday, Australians saw an incredible set of job numbers.
More than 366,000 jobs were created in November, a monthly record. Almost 60 per cent of these jobs went to women, and one-third to young people.
The unemployment rate fell to 4.6 per cent, compared to 5.7 per cent when we came to government. Employment is now at a record high, with 180,000 more Australians in work than before the pandemic. Our economic plan is working.
Australia has outperformed every major advanced economy through the Covid-19 pandemic.
The mid-year economic and fiscal outlook was also released on Thursday. It showed that despite the impact of Delta, which saw 13 million Australians subject to extended lockdowns, the economic outlook is stronger than what was forecast in May.
Growth is higher next year at 4.25 per cent. Investment is expected to increase by 16 per cent over the next two years, off the back of record business investment incentives. These are the strongest investment numbers since the mining boom and demonstrate that the private sector is leading the recovery.
Tax cuts for families are boosting household incomes, with consumption expected to grow at 5.5 per cent next financial year – the fastest in more than two decades.
Unemployment is expected to fall further to 4.25 per cent, and to remain in the low 4s for only the second time since the 1970s.
The strong outlook for the labour market will see one million more people in work over the next four years. A tighter labour market, where jobs ads are their highest in 13 years, is generating a stronger outlook for wages, with wages growth upgraded in every one of the next four years.
The combination of higher wages and more people in work and less people on welfare has contributed $50bn to the budget bottom line since May. It is this dividend from a stronger economy that has ensured the budget did not deteriorate even though Delta caused the third-largest fall in quarterly GDP on record.
In response to Delta, the Morrison government provided a further $25bn in economic and health support, with payments to businesses and households, and further investments in vaccine purchases and treatments, and hospital funding.
It is only with a stronger economy that the essential services people rely on can be guaranteed.
With the number of people on the NDIS expected to increase from 480,000 today to 670,000 over the next three years, the cost of this demand-driven program is forecast to increase by $26bn over the next four years. This additional funding, provided in this budget update, underscores our clear commitment to fully funding this vital program supporting many Australians in need.
This budget update also includes further investments to grow our economy and create jobs. There is a boost to skills and training, with wage subsidies for apprentices. And further funding for key infrastructure projects such as the MetroNet passenger rail network in WA, upgrades to the Bruce Highway in Queensland, the Hawkesbury River Crossing in NSW, and the intermodal terminal in Victoria.
While higher revenues from a stronger economy have been largely offset by the cost of the Delta outbreak and growth in the NDIS, the underlying cash balance still improves this year by $7.4bn compared to budget.
This builds on the $80bn improvement in last year’s final budget outcome. Significantly and consistent with what we forecast in May, the budget deficits … halve over the next four years.
There is also a material improvement in our net debt position, which now peaks at 37.4 per cent of GDP as opposed to 40.9 per cent in 2024-25 – $65bn lower than what was expected in May.
At peak, Australia’s net debt levels are less than half the average seen today across G20 countries, with Australia one of only nine countries in the world to have a AAA credit rating from the three leading rating agencies.
As the Omicron variant reminds us, this pandemic is not over. But with a vaccination rate of more than 90 per cent, one of the highest in the world, and an economic recovery that is one of the strongest in the world, Australia is in a better position than any other nation.
To maintain this momentum, we must continue to open safely, learn to live with the virus, and stick to our economic plan. A plan that lowers taxes for families and small businesses, boosts investment for infrastructure and skills, and is creating one million new jobs as we lock in the recovery.
As Australians approach Christmas they have good reason to look forward to next year with confidence, optimism and hope.