A stronger than expected jobs boom is set to be the centre piece of the federal government's update on the state of the books, with latest indicators now showing the economy is well on its recovery from COVID-19.
Treasury documents set to be released as part of the mid-year economic fiscal outlook are anticipated to reveal a major jobs boom, exceeding government expectations as a result of swift economic rebound from the Delta lockdowns in the south east of the country.
Treasurer Josh Frydenberg will outline more than 150,000 additional jobs have been created than initially forecast in last May's budget, spruiking the momentum of the economy would generate over one million new employment opportunities over the next four years.
MYEFO's showcasing of robust projections comes off the back of Westpac's leading indicator unveiling optimists outweigh pessimists on the state of the future economy, despite concerns over new variants unravelling the recovery.
Australia's soaring job numbers has prompted Treasury to anticipate the unemployment rate by the June quarter next year to fall to 4.5 per cent and 4.25 per cent in the 2023 June quarter, making it the lowest level since the Global Financial Crisis.
The expectations also mark the second time since the 1970s where the sustained unemployment rate has dipped below 5 per cent.
Mr Frydenberg is poised to use MYEFO to cement jobs creation as a key economic priority for the Coalition ahead of the incoming election year.
"Saving jobs and creating jobs is a top economic priority," he said. "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."
At the beginning of the pandemic, Treasury initially tipped a devastating slide in gross domestic product in excess of 20 per cent and an unemployment surging beyond 15 per cent due to the introduction of lockdowns which halted the economy.
NAB Economics anticipates the damage caused by the Delta variant which forced GDP for the third quarter to slide 1.9 per cent, would recover early in the coming year.
The major bank also flagged a tightening labour market with an unemployment rate of less than 4 per cent would see a pick up in wages growth.
Treasury's MYEFO analysis is expected to show the biggest pick up in jobs were in accommodation, food services and health care. Mr Frydenberg also flirted tax cuts would assist in the jobs recovery particularly for the private sector.
"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," he said.
"JobKeeper, the CashFlow Boost, Household Payments, the COVID Disaster Payment and Business Support payments did their job in saving lives and livelihoods."
The Coalition has additionally used the mid-year update to sledge Labor, claiming the opposition would be the only group disappointed about a booming economy.
"Only the Labor Party will be disappointed by the strong labour market outlook presented in MYEFO after years of talking down the economy as Australia recovers from this once in a century pandemic."
The Westpac-Melbourne Institute's consumer sentiment survey for December showed confidence in the economy fell 1 per cent to an index position 104.3, but still remained in positive.
Westpac's survey showed states which did incur lockdowns had a bigger swing in sentiment, but consumer concerns did remain over the emergence of the Omicron strain and its potential impact to the recovery from the pandemic.
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