Abbott government may break jobs promise

The Abbott government faces further pressure over broken promises with a new analysis showing it will fall well short of its pledge to create 1 million jobs over five years.

Despite Tony Abbott's repeated vows as opposition leader to ''under-promise and over-deliver'' in government, new parliamentary research based on the government's own economic forecasts indicates the Coalition will fall at least 200,000 jobs short.

The analysis, carried out by the Parliamentary Library at the request of Labor, was backed by a range of economists.

In the run-up to the election, Mr Abbott repeatedly vowed to create 1 million new jobs over five years, and 2 million over a decade, by scrapping the carbon and mining taxes, cutting red tape for business, and boosting productivity, among other measures.

By combining employment data from the Australian Bureau of Statistics with Treasury's jobs growth forecast in last month's mini-budget, the library calculated the Australian economy would add about 620,000 jobs over the next four years. Even allowing for a fifth year, the figures show the government will fall well short of 1 million new jobs.

The mini-budget, or midyear economic and fiscal outlook (MYEFO), was the government's first major economic statement.

The analysis follows broken Coalition promises on school funding and the roll-out of the National Broadband Network, as well as hints at changes to paid parental leave, the National Disability Insurance Scheme and Medicare. It also comes as the government battles the political fallout of job losses with the planned pull-out by Holden and lay-offs by SPC Ardmona.

Acting Treasurer Mathias Cormann stood by the government's jobs pledge, blaming Labor for the modest jobs growth forecast in the MYEFO.

''It is no secret that we inherited an economy growing below trend, rising unemployment, and a budget in very bad shape,'' he said. ''MYEFO is a reflection of that.''

But shadow treasurer Chris Bowen said the shortfall looked set to become Mr Abbott's ''biggest broken promise''.

''We cannot continue to see the poor performance on jobs continue with mass lay-offs, particularly in manufacturing, as the government abandons any meaningful role in fostering innovation and the high-skills and high-wage jobs that come with that,'' he said.

Professor Bill Mitchell, head of the University of Newcastle's Centre of Full Employment and Equity, said the jobs promise was ''incredibly far-fetched''. He said the shortfall would be greater even than the Parliamentary Library's figures suggested because Treasury's employment forecasts were overly optimistic.

Employment growth over the past two years had been ''virtually flat'', he said. Deep cuts flagged by the government in its coming May budget would worsen the problem.

Bank of America Merrill Lynch chief economist Saul Eslake said the government would need real GDP growth to be 4 per cent to 4.5 per cent. ''Nobody is forecasting that,'' he said. And Shane Oliver, chief economist at AMP Capital, said the pledge was ''a bit of a stretch'', given Treasury's jobs growth forecast was fairly flat.

John Daley, chief executive officer of the Grattan Institute, said employment growth would depend largely on factors beyond the government's control, such as the global economy.

smh.com.au

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