In what is likely to be his final major speech before handing down next month’s budget, the treasurer says despite the fall in the jobless rate to 5.6 per cent, it is still not what he considers to be “comfortably below six per cent”.
This was a target he had previously set before undertaking budget repair after the government’s big-spending support programs in the face of the pandemic.
He said the virus remains a threat to both the global and domestic economies, international borders remain largely closed, Australia’s population growth is the lowest in a century and interest rates are close to zero.
“For these reasons, we remain firmly in the first phase of economic and fiscal strategy,” he will say in a speech in Canberra today.
“We need to continue working hard to drive the unemployment rate lower. We will not move to the second phase of the fiscal strategy until we are confident that we have secured the economic recovery.”
Frydenberg wants to drive the unemployment rate down to where it was before the pandemic – 5.1 per cent – and then even lower.
He said the last time Australia had a sustained period of unemployment below five per cent was between 2006 and 2008 and just prior to the global financial crisis.
He says the government’s core values have not changed and it remains committed to lower taxes, containing the size of government, budget discipline and guaranteeing the delivery of essential services.
“But we won’t be undertaking any sharp pivots towards austerity,” he says.
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