One million jobs are forecast to be created over the next four years in Australia, with the unemployment rate to be locked at its lowest level since before the Global Financial Crisis, the federal budget update is expected to show.
Thursday’s mid-year economic update will also reveal Treasury has upgraded its wages forecasts, with a full-time worker expected to get a $2500 annual increase in their pay over the next four years.
This would mean someone currently earning $90,000 would get $100,000 by 2024-25, while a person on $67,000 would be paid $75,000.
The budget update will also show that Treasury expects to see more than 13.8m people employed by June 2025, which is 150,000 more than forecast in the May budget.
The unemployment rate is projected to fall to 4.5 per cent by the middle of next year and 4.25 per cent by June 2023, which is the lowest sustained level since September 2008.
This would mark the first time Australia’s unemployment rate has been locked below 5 per cent since the Global Financial Crisis and only the second time in 50 years.
In October it jumped to 5.2 per cent amid lockdowns from Delta.
With the government making the economy a key pillar of its re-election strategy, Treasurer Josh Frydenberg credited support payments, business incentives and tax cuts with helping jobs figures bounce back.
The Mid-Year Fiscal and Economic Outlook could be the last fiscal statement handed down by the government if Prime Minister Scott Morrison decides to send voters to the polls before the scheduled March 29 budget.
“Saving jobs and creating jobs is a top economic priority,” Mr Frydenberg said.
“It’s a pathway to a stronger economy, an improved budget bottom line while being fundamental to a healthy and prosperous society.
“While we have avoided the scarring of the labour market that was characteristic of the 1980s and 1990s recessions, there are still many more new jobs to create.
“We have the economic plan to do this with the Treasury estimating around a million new jobs to be created over the next four years.”
Mr Frydenberg said Australia was emerging from the greatest economic shock since the Great Depression, pointing to March 2020 when Treasury was contemplating a collapse in GDP of more than 20 per cent.
“We have been working to a clear fiscal strategy to drive down the unemployment rate to historically low levels,” he said.
“JobKeeper, the cashflow boost, household payments, the Covid Disaster Payment and
business support payments did their job in saving lives and livelihoods.
“Now our tax cuts and business investment incentives are helping to create a new wave of economic activity as the baton is passed to the private sector helping to create more jobs and secure the recovery.”
It has previously been revealed the mid-year budget update is expected to show a plan to increase permanent migration back to 160,000 a year to help with economic growth.
Business investment is expected to rise by 16 per cent over the next two years – higher than the 12 per cent predicted in May.
But the National Disability Insurance Scheme’s future costs are expected to blow out by another $26bn over the next four years, according to reports, in a major hit to any gains secured to the budget bottom line.