Unemployment in Australia: A 5-Year Analysis and Government Policy Response

This report examines the unemployment situation in Australia over the past five years, exploring the underlying causes and the impact on the economy. It delves into government policies implemented to combat unemployment, analyzing their effectiveness and potential shortcomings. The report concludes with recommendations for future policy directions.

Written Report
Unemployment during last 5 years and its effect on the Australian
economy and government policy towards reducing unemployment
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Contents
Introduction...........................................................................................................................................3
Unemployment in Australia...................................................................................................................4
Reasons for unemployment in Australia............................................................................................6
Government Policies to fight unemployment.....................................................................................9
Conclusion...........................................................................................................................................12
References...........................................................................................................................................13
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Introduction
Unemployment is a state of an individual in which do not earn his livelihood. The rate of
unemployment is increasing due to the negligence of work of unwillingness of people for
working. This has made an increment in the poverty rate of the country and leads to a
reduction in the economy rate. The report will give it clarification on the need for jobs for the
survival of an individual in Australia as well as the policy formulated by the government for
the reduction of unemployment in Australia. This will help in increasing the rate of
employment and lead to provide livelihood to the customers. The increase in employment
with the formulation of policies helps in providing job opportunity to the people and makes
them earn high income with a wide range of productivity. This led to improvement in the
living standard of people and makes them contribute to the economy of the country.
The reduction in the rate of unemployment in Australia will help in increasing the rate of the
economy and lead to provide satisfaction to the people. This will help in contributing a major
portion in the GDP of the country and increases the income level of the country. The
expectation of the Focus economic is that the rate of unemployment would be 5.2% in 2019
that need to be diminished for the meeting of demand and supply in the country. The increase
in unemployment leads to reduce the labour rate and lead to high contribution in the
diminishing result in the economy of the country. The report will explain the number of
policies that have been formulated and implemented by the government in last 5 years for the
reduction of unemployment and increasing the economy of the country. This led to increasing
the rate of employment in Australia.
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Unemployment in Australia
Every year a large number of youth is graduating and is trying to enter the labour market.
There are many reasons for there not able to maintain the jobs and search the related and
desired jobs. Many of them are facing recession and doing low rated jobs to earn their bread
and butter. For those who are actually working it is difficult to find correct hierarchy and
growth in the consecutive field. Currently, there is more than 30,000 youth unemployed in
Australia; this graph has increased considerably since mid-2008, after the change in Global
Financial Crisis (GFC). Although the rate of unemployment is high still the rate is under
maintenance. This time the graph as not stepped below a certain benchmarked number, thus
the situation has been under control for some time. But the economy of Australia has affected
since 2008. Around 80 million people are unemployed in Australia that constitutes to around
43% of the world’s employment, this is a huge number to consider and work upon
(Whiteford, 2018).
Figure1- Industries affected by a recession
(Source- Carvahlo, 2015)
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Some people believe that unemployment could have occurred due to immigration in the
country and then creating potential risk in the Australian job markets and affecting the
economy consecutively. This has affected various businesses in Australia, as per the pie
diagram above, the areas and businesses that got affected are mainly retail trades which
covers 22.8% of the overall structure. After that the second affected industry is the
accommodations, food and hospitality industry, this may be due to less number of people
visiting Australia due to a financial crisis. Other industries that were affected healthcare,
manufacturing, education and education industry. There can be the unexplainable number of
reasons for the downfall of these industries. Later in this report, the reasons for recession are
discussed (Whiteford, 2018).
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Reasons for unemployment in Australia
Out of many factors responsible for unemployment, some of them are discussed as under-
 Poverty- Many areas of Australia have less number of people earning more than
required per capita income. This is appointed of the serious issue, as they are not able
to earn enough to fulfil their families basic needs and requirements and helping them
to earn basic skills and have full meals at least 2 times a day. This has been a major
effect on the education system as well as the economy (Chang, 2017).
 The poor education system at school level- Due to lack of talent the education level
is quite low as compared to other countries. This has affected the knowledge of the
basics and affected the overall personality development of the youth. These lack skills
affect the knowledge of the people going further in career and pursuing the career in
respective fields. Thus increasing the rate of unemployment in the country.
 Gangs- Certain young individuals have formed gangs and are going towards violence
and massive noise and nuisance creation from the basic level of the education. The
age group can start from 15 years to 25 years and above. This has made it difficult for
the other students to study there and this creates a level of terrorism on the streets of
the country. This reduced the number of job seekers and eventually affects the
economy if respective companies and reduces their interest in Australian market
(Chang, 2017).
 Underdeveloped skills– This may be due to the family background or the
neighbourhood that the people are working in, the children are not much encouraged
to study more or develop any skills. They are more motivated to do labour and do
small jobs from the early age.
 Requirements not matched- Due to lack of education in vocational level, certain
candidates lack in skills that are asked by the companies, thus this has been a major
reason for people not being able to match with the expectations of the companies
(Lampach, 2017).
 Motivation dropping- Facing constant rejections from the job market eventually
drops the motivation level amongst the candidates and they move towards the part-
time job market or labour market. This is a huge loss of good talent and thus has an
adverse effect on the economy.
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Due to these reasons, the economy has also affected in the country, there have been certain
effects that were found during the study done by the government. Below mentioned are some
of the effects of unemployment on Australian economy-
 Exploitation of human resource- Due to the consecutive downfall in the demand of
the talented individuals, it is found that the people who are hired are not treated as per
their capabilities and the qualities they earn. They are not given proper promotions
and recognition in the company and the prospects to grow also decreases eventually.
This is highly demotivating and the candidate loses all hope in the job market. This
has been affected the economy with huge resource loss and thus dropping the quality
and market cash ratios (Rafi, 2017).
 Disputes amongst the industries- The low capability of people to work as per the
industry demands it is difficult for the industries to make up for the demands of the
customers. The rates of raw material have also reduced but the optimum purchase
capacity of the industries has reduced. This has reduced demands in many sectors like
retail, hospitality, travel and tourism etc.
 Unstable politics- An unemployed person becomes more prone to activities like
violence and terrorism and they blame the government for all the things happening to
them. They join political parties and become more involved in going against the
government policies thus make it difficult for the government to do any development
(Rafi, 2017).
 Social issues- Growing unemployment diverts the interest of the youth more towards
wrong paths such as gambling, violence and dishonesty. This increases the level of
chaos in the society and affects the measures taken by the government to improve
economic growth. These misguided youths become more focused in all illegal
activities like smuggling. This makes it difficult for the government to develop the
financial conditions of the country. The government cannot maintain the cash reserves
and cannot accurately measure the GDP and the rate of inflations and depreciation in
the market (Lampach, 2017).
 Poverty increases – There has been a considerate increase in the poverty ratio of
Australia as there is the low level of income of the maximum population, affecting the
economic development of the whole country. The more the gap between rich and poor
increases the difficult it is for the government to maintain the current state from being
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worse and develop methods to increase the lifestyle and cost of living of the society
and make them available to earn for themselves and for their family (Rafi, 2017).
 Loss of efficient human resources- Due to unemployment there is no constructive
use of the human resource has been done. Thus all the human resource go waste and
no optimum use can be done for them. This made it difficult for the government to
optimally utilize the resources. The government has been trying to provide youth
certain skill development classes and vocational courses to help them grow skills. But
the lack of employment options makes all those courses go waste and worthless to
work upon. There are more the 30,000 million people in Australia who are very much
talented but they are not getting enough opportunities to show their worth to the
country and thus reducing the speed of economic development.
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Government Policies to fight unemployment
Government reforms to develop the economy affected by the recession are mainly focussed
upon the raising of the economy of the country by using adequate norms to provide
employment and help in using the human resources effectively to reduce the rate of
unemployment and increase per capita income. Certain changes have been made in the
government policy they are-
Penalising policy
In this policy or technique, the major aim of the government is to increase the employment by
motivating the youth to go out and search more for the jobs around. If they fail to do so the
will be penalized, that may be in the form of monetary or non-monetary ways. The theory is
based on the fact that employment scarcity is more due to youth not trying to find jobs. They
are not putting down full efforts for it. There are certain strategies that are being used for
those people who need to look for the job actively; certain reforms used for them are-
 In order to allow them to apply for more jobs, they are provided with additional
benefits.
 There is certain work tests conducted for the unemployed; the result shows the effect
of the same on the candidate. They can buy sanctioned for further process or they can
be penalized for not performing well.
 There are certain schemes for the dole. In this scheme, in order to avail
unemployment benefits, the candidate has to show 15 hours of work to the
government to avail that.
It is observed that these schemes have been helpful in bringing out the good. It is also
observed that job search in Australia is far difficult as compared to other countries (Morris &
Wilson, 2014).
Pension Scheme
In order to give pension benefits to the people, the government made certain changes in the
pension scheme to facilitate the women as well as the men so that the age of job seekers is
not beyond 60 years of age. In order to restrict new entrants into the Wife pension scheme,
the age of pension recipients has been increased from 60 to 65 years but later on, the policy
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was restricted back to the original scheme. Later on, Mature Age Allowance and Partner
Allowance were also restricted to any new entrant.
These changes majorly affected a large number of women pension recipients who were
largely dependent on this money. Later on, changes were made on the Parents Pension Single
recipients scheme as per that the new parents were required to do new payments rather than
the old payment methods used by their parents when they were eight years old. Later on in
Disability support pension, the claimant under the age of 35 years has to show a work
capacity of eight hours or more a week to claim the amount. But these schemes did not prove
to be massive game changer to the job seekers. These schemes had many boundaries and
logic needed, thus restricted the participants to a small group (Morris & Wilson, 2014).
Child Care Changes Scheme
As per the new parliamentary laws now the parents will have more facility to pay the fees of
their children. Now, the facility of child care is available more easily as more than 843,000
families have their children in the child care services. Government is now trying to
implement additional 3$ subsidy in the child care services. It would give around 85 to 20
percent rebate in the child care services. In spite of revised budget, the subsidy for families
for child care service will remain the same. These services help in managing the economy in
all the age group of the society. Thus facilitating the working generation will not only help in
framing a good future for their children but also a saving and investment mode to help their
children in future (Thompson, et.al, 2012)
Apart from above methods, there are certain steps which government should take in order to
reduce unemployment-
 Increase overall demand- To increase the overall demand of the country, it will help
in the production of all the goods at low cost, thus this will help in increasing the
demand further. This will support the market value and small and large industries as
well.
 Unified Market- This will help in creating a unified market for producers and
consumers. The industries will get the material at low cost and the producers can buy
that at a reasonable price, thus helping in making more products and meeting
customer's demands. This will eventually raise customer’s demands as well and
increase the revenue of industries and eventually of Australia.
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 Transaction cost reduction- This will ease in doing business among the people. This
is ultimately helpful in helping the overall economy, as business brings revenues and
taxes to the country (Thompson, et.al, 2012).
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Conclusion
The above report has given its consideration on the impact of unemployment in the economy
of Australia. This has increased the rate of poverty and reduced the labour cost in Australia.
The government has made certain policies for the reduction of the rate of unemployment so
that it has removed the poverty and lead to improve the rate of the economy in the country.
The government help in providing the job opportunities to the people so that it could help in
providing them with the living standards and makes them use their skills for the effective
production in the organisation. This makes the increment in the income level of the country
and leads to contribute a major part in the development of the economy of the country.
The number of policies formulated by the government has been illuminated in the above
report. This has been made to bring sustainability to the economy of the country and lead to
improve the services provided by the people in the country. The diversified policies
formulated and implemented by the government of Australia in last 5 years have been
described in the above report. This has been made to increase the employment and economy
rate in the Country.
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References
 Chang, C., 2017. Young people to lose access to unemployment benefits as part of
welfare reforms [Online]. Chang, Charis. Available at
http://www.news.com.au/finance/economy/australian-economy/young-people-to-lose-
access-to-unemployment-benefits-as-part-of-welfare-reforms/news-story/
c308469ef415785c685b587a4e71287a [Accessed: 28 May 2018]
 Lampach, W., 2017. 7 Reasons for Youth Unemployment and How We Can Solve
Them [Online]. Lampach, Wassana. Available at http://www.careersonline.com.au/7-
reasons-youth-unemployment-can-solve/ [Accessed: 28 May 2018]
 Morris, A. and Wilson, S., 2014. Struggling with the Newstart unemployment benefit
in Australia: The experience of a neoliberal form of employment assistance. The
Economic and Labour Relations Review, 25(2), pp.202-221.
 Rafi, B., 2017. The impact of labour market regulation on the unemployment rate:
Evidence from OECD economies.
 Thompson, G., Murray, T. and Jomini, P., 2012. Trade, employment and structural
change: The Australian experience (No. 137). OECD Publishing.
 Whiteford, P., 2018. Ideas for Australia: Welfare reform needs to be about improving
well-being, not punishing the poor [Online]. Whiteford, Peter. Available at
http://theconversation.com/ideas-for-australia-welfare-reform-needs-to-be-about-
improving-well-being-not-punishing-the-poor-56355 [Accessed: 28 May 2018]
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