NSW employment data: NSW economy appears to be weathering economic storm

NSW appears to be weathering the economic storm with the State’s total employment holding steady for four months (3.393 million in February vs 3.394 million in May). 

Whilst employment has held steady, the NSW unemployment rate of 6.4% is the highest of any state in Australia with the number of unemployed rising by 10,300 in May.

“The NSW economy appears to be holding itself in the balance, appearing to withstand the severe economic pressures that have resulted from the global financial crisis”, said Kevin MacDonald, CEO of NSW Business Chamber.

“It would be unwise to feel either a sense of elation or a sense of impending doom from these results.  These results show that whilst there has been deterioration in the headline unemployment rate, actual employment levels are holding up better than expected.”

Mr MacDonald said the delicate position of the NSW economy made next week’s Budget crucial as a means of creating jobs, protecting NSW’s AAA rating and ensuring a return of business confidence.

“The best way for the government to protect jobs and lift business confidence is for the Government to fast-track its own plan to cut payroll tax.  I believe this is the best way to continue to protect jobs in NSW.” Mr MacDonald said.

NSW Business Chamber has advocated for the scheduled cut in payroll tax from 5.75% to 5.5% to be fast-tracked to 1 January 2010.  This would be a full year ahead of the original timetable of 1 January 2011 and save NSW businesses approximately $475 million a year.

“Payroll tax is a tax on jobs.  What we are proposing is a modest and achievable policy change that would help NSW businesses to keep people in jobs.

Mr MacDonald said the major challenge on the horizon for the NSW Government is to protect the AAA credit rating in next week’s State Budget.  A loss of the rating would have a negative impact on investor confidence in NSW.

“The State’s AAA credit rating is not a temporary goal to be discarded when times are tough.  Our credit rating is critical for job creation.  Maintaining our AAA credit rating encourages business confidence and investment which supports jobs.

“Today’s announcement that the NSW Government intends to rationalise the number of government departments is a welcome announcement.  NSW Business Chamber advocated this change in its Pre-Budget Submission and we believe that, if implemented correctly, it should result in significant savings and improvements in performance and productivity across Government. 

“We call on the Union movement to back these proposals and not be obstructive.  The NSW Government cannot afford to continue a “business as usual” approach in relation to into performance.  There are tough decisions that need to be made for the future sustainability of NSW.” Mr MacDonald concluded.