EDITORIAL: Baird government's new job creation plan

IN Australia, as in most liberal democracies, governments on both sides of the political fence have privatised large numbers of government enterprises, arguing that the private sector does better than its public counterpart when it comes to succeeding in the commercial world.

Governments, according to this philosophy, should simply govern for the greater good, and let businesses get on with the complicated process of making money.

Despite this hands-off approach, if there’s one area where governments of both persuasions like to keep their hand in, it’s the often opaque world of job creation.

At Lake Macquarie on Friday, the chief executive of Jobs for NSW, Karen Borg, unveiled details of a Baird Government plan to create one million jobs in the next 20 years, starting with a $190-million fund to be allocated over the coming four years, with a minimum of 30 per cent to be spent in regional areas.

In parliament this week, Premier Mike Baird seized on new jobs figures showing the Hunter workforce grew by 13,400 people, or 4.6 per cent, in the past year as proof that government spending in the region was “delivering more jobs”.

Interestingly, however, there are few politicians willing to put their hand up and claim responsibility when the job market goes the other way. At these times, it will more likely be an unfavourable exchange rate, or a wages-led inflation figure, that our leaders will point to in order to get themselves off the hook.

In truth, the modern economy is such a complicated animal that it can be extremely difficult to divine the relationship between cause and effect, even when it comes to major economic levers, like movements in interest rates. For government job-creation programs to work properly, the employment they create should continue once the original subsidy, or stimulus, is removed. Otherwise, the government is simply interfering in the efficiency of a market it has already placed its faith in: a market that supposedly works best when left alone. From a regional perspective, the government should probably skew the grants to cities and towns outside of Sydney, which is already growing much faster than the rest of NSW. As the Parliamentary Secretary for the Hunter, Scot MacDonald, said at Friday’s launch, the world is moving very, very quickly. Helping the rest of NSW counter the gravitational pull of the capital is surely no bad thing.

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