Ms LAWRIE - 2004-10-07
I understand the Australian Bureau of Statistics has put out a two-page disclaimer on their unemployment figures. Could you please explain what this disclaimer contains.
ANSWER
Madam Speaker, I thank the member for Karama for her question, which is important. It is something I have never seen in 20 years of following the employment statistics, be they a 20-year history of the Northern Territory from Commonwealth Employment Services and Centrelink statistics years ago, to monthly ABS statistics over the past 14 years I have been in this Chamber.
There is a pattern to employment tradition in the Northern Territory, and it goes something like this. In November/December, January/February, and often March, there is a slow down and a general decline in economic activity right across the Territory, most notably around tourism and hospitality This is usually reflected in the figures. From April/May through to September/October, generally, you get growth and a robust economy with construction picking up as we get to a traditional Dry Season, and incoming tourism.
You do get the odd aberrations. I recall being in this Chamber in about 1997-98, when things were pretty good. The general flow of information coming through and the economic indicators were quite strong, as they are now, and ABS unemployment figures were going through the roof. We ran that line at government, although it did seem at odds with what was going on in the general economy.
Two years ago, around November, coming into the traditional slow down time, we started to get unanticipated, unexpected growth in the size of the labour market. The participation rate went up; the number of employed went up; and the number of unemployed went down through November, December, January, February and March. I thought this strange because we did not believe things were robust in the labour market …
Mr Dunham: Oh, you still don’t.
Mr STIRLING: … and in the economy, yet ABS was showing, on the figures - these clowns do not follow these things, so they would not understand. However, those figures looked very much at odds with what was actually going on. Here we have a repeat of what I have seen - this is the third time in about 20 years - of following these figures. That is, we know all the economic activity indicators are strong, and yet ABS is coming out with a figure of over 8% unemployment.
Interestingly, what ABS did today, which I have never, ever seen them do, is put two pages of explanations to their figures. ABS themselves recognise they have a flawed methodology, in a small jurisdiction like the Northern Territory, with a small labour market and the rotation of the …
Mr Dunham interjecting.
Mr STIRLING: This clown knows it all, so I am not addressing my remarks to him, but other people might benefit from the information.
What ABS has found is that the rotation of the sampling back in April/May, and again in August/September, has been such as to distort the general level of unemployment and employment activity in the labour market. Therefore, we get this over-8% unemployment figure.
Most Territory businesses will tell you the problem they have is getting staff, particularly in the skilled trades. We are putting a lot of work into our Jobs Plan in order to address that. With the major projects upon us and coming upon us, that is actually going to be exacerbated. Therefore, we have two rotational samples which have exacerbated what is already flawed methodology in the Northern Territory in relation to a small labour market. The first was in April/May when the figures started to go awry - the first sign of it was in May - and again in August/September, which have really doubled the effect of a poor sampling rotation back in April/May.
They have fessed up in that sense, and credit to them, because they recognise now that the methodology does not work particularly well for the Northern Territory. However, they say in their two pages, that it could take until around mid-2005 before they have a satisfactory methodology in place. Bear in mind, the commencement of the flaw in the sampling came in April/May, so you have to add eight months on from there before you might get back to a more representative sampling. Then in August/September they have picked up another one, so it is another eight months from then before they will flow through the eight month cycle of getting a complete sample.
Nonetheless, ABS have said they are going to address it. They are going to look closely at the methodology as it is employed, and what they might do to strengthen the robustness and accuracy of these figures in small jurisdictions such as the Northern Territory. We welcome this, and Treasury is there to assist in any way they can.
ANSWER
Madam Speaker, I thank the member for Karama for her question, which is important. It is something I have never seen in 20 years of following the employment statistics, be they a 20-year history of the Northern Territory from Commonwealth Employment Services and Centrelink statistics years ago, to monthly ABS statistics over the past 14 years I have been in this Chamber.
There is a pattern to employment tradition in the Northern Territory, and it goes something like this. In November/December, January/February, and often March, there is a slow down and a general decline in economic activity right across the Territory, most notably around tourism and hospitality This is usually reflected in the figures. From April/May through to September/October, generally, you get growth and a robust economy with construction picking up as we get to a traditional Dry Season, and incoming tourism.
You do get the odd aberrations. I recall being in this Chamber in about 1997-98, when things were pretty good. The general flow of information coming through and the economic indicators were quite strong, as they are now, and ABS unemployment figures were going through the roof. We ran that line at government, although it did seem at odds with what was going on in the general economy.
Two years ago, around November, coming into the traditional slow down time, we started to get unanticipated, unexpected growth in the size of the labour market. The participation rate went up; the number of employed went up; and the number of unemployed went down through November, December, January, February and March. I thought this strange because we did not believe things were robust in the labour market …
Mr Dunham: Oh, you still don’t.
Mr STIRLING: … and in the economy, yet ABS was showing, on the figures - these clowns do not follow these things, so they would not understand. However, those figures looked very much at odds with what was actually going on. Here we have a repeat of what I have seen - this is the third time in about 20 years - of following these figures. That is, we know all the economic activity indicators are strong, and yet ABS is coming out with a figure of over 8% unemployment.
Interestingly, what ABS did today, which I have never, ever seen them do, is put two pages of explanations to their figures. ABS themselves recognise they have a flawed methodology, in a small jurisdiction like the Northern Territory, with a small labour market and the rotation of the …
Mr Dunham interjecting.
Mr STIRLING: This clown knows it all, so I am not addressing my remarks to him, but other people might benefit from the information.
What ABS has found is that the rotation of the sampling back in April/May, and again in August/September, has been such as to distort the general level of unemployment and employment activity in the labour market. Therefore, we get this over-8% unemployment figure.
Most Territory businesses will tell you the problem they have is getting staff, particularly in the skilled trades. We are putting a lot of work into our Jobs Plan in order to address that. With the major projects upon us and coming upon us, that is actually going to be exacerbated. Therefore, we have two rotational samples which have exacerbated what is already flawed methodology in the Northern Territory in relation to a small labour market. The first was in April/May when the figures started to go awry - the first sign of it was in May - and again in August/September, which have really doubled the effect of a poor sampling rotation back in April/May.
They have fessed up in that sense, and credit to them, because they recognise now that the methodology does not work particularly well for the Northern Territory. However, they say in their two pages, that it could take until around mid-2005 before they have a satisfactory methodology in place. Bear in mind, the commencement of the flaw in the sampling came in April/May, so you have to add eight months on from there before you might get back to a more representative sampling. Then in August/September they have picked up another one, so it is another eight months from then before they will flow through the eight month cycle of getting a complete sample.
Nonetheless, ABS have said they are going to address it. They are going to look closely at the methodology as it is employed, and what they might do to strengthen the robustness and accuracy of these figures in small jurisdictions such as the Northern Territory. We welcome this, and Treasury is there to assist in any way they can.
Last updated: 09 Aug 2016