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17:45 AEDT Thu Jun 7 2012
A fall in the number of strikes in Australia proves the Fair Work Act does not need to be overhauled, according to a state union.

Commenting on the latest Australian Bureau of Statistics figures showing a national fall in the number of days lost to industrial disputes over the past three quarters, UnionsWA secretary Simone McGurk said it proved the Fair Work Act was effective.

“This is a reality check for the campaign of myths by some employers who wrongly claim that Australia’s industrial system needs radical change in favour of employers,” Ms McGurk said in a statement on Thursday.

The union secretary said March quarter figures showed the number of days lost to industrial disputes in WA fell to 300, down from 2,300 in the corresponding period last year, and 5,900 in December 2011.

“This is one of the lowest recorded levels of industrial disputes in WA,” Ms McGurk said.

“If we look at days lost through disputes in WA over the full years to March 2010, 2011 and 2012, these have fallen from 25,500 to 16,700 and now 8,100.”

Ms McGurk said the trend was Australia-wide.

“Nationally, days lost due to industrial disputes have fallen for three consecutive quarters.”

While the Fair Work Act was “working”, Ms McGurk said it still needed to be finetuned.

“Unions are now required to give notice of industrial action, which is fair enough,” she said.

“However, there is no similar requirement for employers to give notice if they lock out staff, as was the case with the recent Qantas dispute.”

Gareth Hutchens

May 12, 2012

New system presents data in physical and monetary terms, writes Gareth Hutchens.

The economics profession has always had an uneasy relationship with the environment. Since the 1700s, if mainstream economists thought about the ”environment” at all, they often considered it part of the macro-economy – a mine, a forest, a fishery – not as a vital part of a fragile, and finite, natural system.

But in a sign of how things have changed, the Bureau of Statistics released a paper this week exploring the primary links between economic activity and the environment.

It follows the adoption in March by the United Nations Statistical Commission of a new system of national accounting that presents data about the environment and economy in physical and monetary terms, in a way that policymakers can use to measure the environmental consequences of government policies.

The ABS paper explains how the UN’s System of Environmental and Economic Accounting could be applied to public policy issues that ”cut across environmental and economic domains” – issues such as climate change mitigation, solid waste management, how best to look after the Great Barrier Reef and Murray-Darling Basin.

It says the system is a “significant milestone” because it has the same status as the traditional System of National Accounts, from which important economic indicators such as gross domestic product are drawn.

”The development of the SEEA has been driven by a desire to have more complete and robust information on the economy and the environment, and to better understand the interactions between the two,” the ABS report says.

”This has been due to increasing realisation that economic prosperity is dependent on the ability of the environment to supply natural resources and to absorb pollution, and that environmental policies impact on economic activity.”

The ABS paper cites a report from the Stiglitz Commission, formed in early 2008 at the request of the outgoing French President, Nicholas Sarkozy, to address concerns about the way modern economies measured economic performance and wellbeing. That report, which was co-written by the economists Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi, focused on the inadequacy of the most widely used measurement of economic activity – gross domestic product.

”What we measure affects what we do; and if our measurements are flawed, decisions may be distorted. Choices between promoting GDP and protecting the environment may be false choices once environmental degradation is appropriately included in our measure of economic performance,” the Stiglitz report wrote.

But Dr Stuart Rosewarne, a senior lecturer in political economy at the University of Sydney, said he was concerned about attempts to put a dollar value on environmental assets.

”I think there’s some measure in it; it does open the possibility for some lobbying, but the crucial question is who does the valuing [of environmental assets],” he said.

”Putting a dollar value on the environment turns it into some sort of nominal abstract form that disregards what’s unique about a particular environmental amenity or area.”

The ABS will be hosting a conference on Monday and Tuesday in Melbourne to examine how environmental accounts can be developed and used in Australia.

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May 11, 2012


THE official job figures published by the Bureau of Statistics have significantly underestimated recent job growth, due to forecasting errors that first overstated, then understated the growth in the adult population.

The errors, which have serious implications for economic policy, began when the number of foreign students living in Australia fell rapidly after immigration laws were tightened in late 2009.

The unforeseen fall at first led bureau forecasters to greatly overstate population growth – and hence, job growth – in 2010, when they reported an extraordinary growth of 363,400 jobs.

When they realised the error, they decided to correct it by understating population growth in future forecasts used in the labour force figures. These then reported a net loss of 900 jobs in 2011.

On one estimate, once the figures are adjusted for the erroneous forecasts, at least 100,000 of the jobs supposedly created in 2010 in fact arrived in 2011.

The errors are not in the official estimates of population growth, which are issued six months after the period to which they apply. They are in the estimates – in effect, forecasts – of the adult civilian population used in the labour force figures.

Usually the two series move together. But in the year to September 2010, population growth (including children) shrank rapidly, from 433,000 to 325,000, whereas the forecasts for the labour force estimated that adult population growth would remain steady at 394,000.

In the year to September 2011, that suddenly reversed. Actual population growth was little changed at 320,000, but the Bureau slashed the forecasts used in the labour force figures from 394,000 to 224,000.

Since most people interviewed in the labour force survey are employed, the effect of understating population growth was to understate employment growth.

The bureau defended itself yesterday in an article published with the labour force figures, arguing that its main focus is on getting a correct reading of the unemployment rate and workforce participation rate – which come straight from the survey data.

But its approach seriously misled readers, commentators and ultimately the public about the size of the slowdown in the job market – and hence, the true state of the economy.

One prominent commentator seized on the reported fall in jobs to describe the labour market as being in its worst shape since 1992.

The Australian Statistician, Brian Pink, yesterday stood by the bureau’s figures. ”We do not believe that the employment growth that we have shown has been biased in some way by the method – that’s our view,” he said.

Senior economic officials are aware that the data is flawed, but have refrained from making any public statement so as not to reduce confidence in the bureau.

But tax data released with the Victorian and federal budgets confirm the job market in 2011-12 has been stronger than the official figures show.

The bureau estimates that jobs in Victoria fell by almost 20,000 in the first nine months of 2011-12, with 38,000 full-time jobs lost. Yet the state’s payroll tax revenue rose 7.7 per cent in that time, with no fall in jobs.

Tuesday’s federal budget showed PAYE income tax revenues up 9.7 per cent in 2011-12, rising faster than the 9.4 per cent growth in 2010-11. While officials believe job growth has weakened in recent months, the tax take is strong evidence that the bureau’s estimates are wrong.

Westpac senior economist Justin Smirk said the bank’s economics team was uncomfortable with the way the bureau had tackled its problem.

Additional reporting by PETER MARTIN

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