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ABC News News Home Fact Check Dominic Perrottet says unemployment in NSW was nearly 50 per cent higher under Labor. Is he correct? Share # Dominic Perrottet says unemployment in NSW was nearly 50 per cent higher under Labor. Is he correct? RMIT ABC Fact Check * Topic:State and Territory Elections Wed 6 Mar 2019Wednesday 6 March 2019Wed 6 Mar 2019 at 2:38pm ![\\'The](\\" cdn.net.au/d6bc78ba10766104aa4fab13810dc296?impolicy=wcms_crop_resize&cropH=530&cropW=939&xPos=0&yPos=85&width=862&height=485\\"/) Display caption The statistics used by NSW Treasurer Dominic Perrottet are meaningless, experts told RMIT ABC Fact Check. (AAP: Joel Carrett) abc.net.au/news/fact-chec-nsw-votes-jobless-rate-46-per-cent-higher-under- labor/10867388 Link copied ShareShare article ## The claim Sorry, this video is not yet available or has expired ![\\"Dominic](\\" cdn.net.au/413d3f46529b521db25709d675deac25?impolicy=wcms_crop_resize&cropH=572&cropW=1016&xPos=3&yPos=0&width=862&height=485\\"/) Dominic Perrottet Heading one of the nation\'s strongest economies, the Berejiklian Government has been spruiking its economic credentials in the lead up to this month\'s NSW election. In a news conference on February 21, NSW Treasurer Dominic Perrottet took credit for the state\'s solid employment figures and declared that a vote for Labor was a vote \"to take our state backwards.\" He went on to claim: \"It was only 10 years ago, under Labor, the unemployment rate was 5.7 per cent. Today, 3.9 per cent.\" Is he correct? RMIT ABC Fact Check investigates. ## The verdict Mr Perrottet\'s claim amounts to cherrypicking. His figures are accurate, but they do not fairly represent Labor\'s record on jobs. Experts told Fact Check that comparing unemployment rates for two individual months 10 years apart was meaningless, and suggested longer-term averages would provide a better, albeit crude, yardstick. Averaged over two terms per party, the jobless rate under the most recent Labor and Coalition governments was the same, at 5.2 per cent. Also, in referring to Labor\'s record, Mr Perrottet chose a rate from the middle of the global financial crisis when unemployment spiked nationally. Experts said that it was unfair to ignore economic shocks beyond the control of state governments and that, while the Coalition had created jobs through its infrastructure program, no government shouldered sole responsibility for the unemployment rate. ## So, what is the unemployment rate? The unemployment rate is calculated via a simple equation — it is the number of unemployed people expressed as a percentage of the labour force. The Australian Bureau of Statistics defines as unemployed anyone aged 15 and over who is seeking and is available for work. The labour force is the sum of all unemployed and employed people. ## Where\'s the data come from? In his claim, Mr Perrottet cited January figures drawn from the bureau\'s monthly Labour Force Survey, which were published the day of the Treasurer\'s news conference. His numbers match the bureau\'s seasonally adjusted rates — which were 3.9 per cent in January 2019, and 5.7 per cent in January 2009. That\'s nearly 50 per cent higher than today\'s rate. Seasonally adjusted data removes the statistical effects of recurring events. But the ABS also publishes trend data, which smooths out the effects of other, non-seasonal variation in the data and allows month-to-month comparisons. Using trend rates, unemployment in January 2019 was at 4.1 per cent. In January 2009, it was 5.8 per cent. ## Are two months enough? Mr Perrottet compared the unemployment rates for two individual months, 10 years apart. However, experts warned that this comparison wasn\'t valid. Professor Phil Lewis, the director of Canberra University\'s Centre for Labour Market Research, told Fact Check the monthly jobs data was subject to fluctuation because the ABS only surveys a sample of the population. \"It\'s a sample of about 0.32 of 1 per cent. And every month they revise the previous month,\" he said. \"Which is why you don\'t give much credence to month by month figures.\" Jeff Borland, a professor of economics at Melbourne University, said: \"Basically, it\'s nonsensical to quote an unemployment rate from one month when one party was in government, and one month when another party was in government.\" He said comparing average rates over longer periods — say, 12 months or whole government terms — would yield a rough but more accurate comparison. Fabrizio Carmignani, a professor of economics at Griffith University, agreed that comparing two monthly rates \"doesn\'t necessarily say a lot about the economic record of the two governments.\" ## The longer view Fact Check has calculated average unemployment rates to give a better sense of each party\'s record. The 10-year period cited by Mr Perrottet covers eight years of Coalition government and just two of Labor. For a fairer comparison, Fact Check considered rates for the last 16 years — or two terms under each party. Labor\'s period starts in April 2003, after the March re-election of Bob Carr. The Coalition\'s period begins in April 2011, the month after Barry O\'Farrell assumed office. The data shows that, in trend and seasonally adjusted terms, the NSW unemployment rate averaged 5.2 per cent under both parties. Labor\'s first five years saw unemployment fall steadily to reach a low of 4.5 per cent in January 2008, according to trend estimates. This helped offset a spike that peaked in the first half of 2009, when unemployment reached 6.3 per cent. Though in trend terms the jobless rate is now at 4.1 per cent, it hasn\'t all been plain sailing for the Coalition either. They inherited unemployment at 5.1 per cent, which, before beginning its four- year decline, crested at 6.1 per cent in December 2014. NSW Unemployment (Source: ABS, January 2019) ## Ignoring the global financial crisis During his media conference, Mr Perrottet compared unemployment in January 2019 with that of January 2009, and said \"that is the difference\" between Labor and the Coalition. However, January 2009 was near the height of the global financial crisis. \"Unemployment was probably higher almost everywhere in the world 10 years ago,\" Professor Carmignani told Fact Check. In NSW, unemployment went on to reach a peak in May 2009 at 6.3 per cent in trend terms. \"That was a particularly unusual event which affected the whole economy,\" Professor Lewis said. \"So you can\'t really make valid comparisons.\" He said while the data might show that the job market had improved considerably since then, \"you can\'t say it\'s because of anybody particularly managing the economy well\". Professor Borland echoed these sentiments. \"The GFC will have had a huge effect on the unemployment rate at that time\", he said, which means taking credit for the subsequent drop was \"not sensible at all\". ## Taking credit Mr Perrottet\'s comparison suggests state governments can take blame or credit whenever employment rises or falls, but experts said it\'s not that simple. Professor Borland said national economic influences affected the whole country and led to \"highly synchronised\" unemployment rates across all states. There is still variation between states, he said, but some of this can be explained by localised shocks stemming from broader influences — for example, globalisation and the decline in manufacturing. \"So, I\'m not saying the state government can\'t have any influence, but it would be silly to look at a number 10 years ago and a number today and say all of that is because of the state government.\" Professor Lewis said there was no doubt that the NSW economy was booming, though he ascribed much of this to the state\'s growing population. \"But to the extent that they have been putting resources into improving the infrastructure of Sydney, given the population squeeze, you could attribute that to the NSW Government.\" Professor Carmignani agreed that, when it came to unemployment rates, the influence of state governments was minor. \"It\'s not a major driver.\" he said. \"Unemployment is not really very much under the control of the state government.\" _Principal researcher: David Campbell_ _factcheck@rmit.edu.au_ ## Sources * CommSec, State of the states report, January 2019, * Dominic Perrottet, press conference, February 21, 2019 * ABS, Labour force, Australia (January 2019), February 21, 2019 * ABS, Concepts, sources and methods, February 2018 * NSW Parliament, Premiers of NSW * RBA, Explainer: the Global Financial Crisis, accessed February 2019 ## Get a morning news briefing in your inbox Subscribe to our ABC NewsMail bringing you breaking news from overnight, plus a heads-up on the stories that will shape your day. Your information is being handled in accordance with the ABC Privacy Collection Statement. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Email address Subscribe Posted Wed 6 Mar 2019 at 2:38pmWednesday 6 Mar 2019 at 2:38pmWed 6 Mar 2019 at 2:38pm, updated Fri 14 Jun 2019 at 5:16pmFriday 14 Jun 2019 at 5:16pmFri 14 Jun 2019 at 5:16pm Share options * Copy link * Facebook * X (formerly Twitter) ## ![\\"Fact](\\"/news-assets/logo-fact-check.png\\"/) Fearlessly follow the facts no matter where they lead. More Fact Check stories ### Attributing this article This article was undertaken through a collaborative partnership between RMIT University and the ABC, which concluded in June 2024. 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It was only 10 years ago under Labor the unemployment rate was 57 per cent Today 39 per cent