Million job man: Prime Minister Tony Abbott. Photo: Jonathan Ng
The Abbott government came up with its pledge to create 1 million jobs in five years solely on the employment growth rate achieved under the former Howard government, a Coalition insider says.
In comments that cast further doubt on the achievability of the pledge made before the September election, the source has told Fairfax Media that no modelling or detailed calculations were done to reach the figure of 1 million jobs.
Rather, then-opposition leader Tony Abbott's office took the employment growth rate of about 2.2 per cent year-on-year under the Howard government and used it to extrapolate its own job-creation target.
''Abbott's office assumed they could achieve the same outcome,'' the source said. ''There was no detailed modelling or serious work done to justify the 1 million job target. They looked at the Howard record and said, 'We can match it'.''
The source said questions had been raised within the then opposition as to whether the pledge was a realistic one to make. ''They did not have the same reform package as the Howard government,'' the insider said.
Mr Abbott repeatedly said in the run-up to the election that a Coalition government would create 1 million jobs in its first five years and 2 million in a decade.
Treasury forecast in last month's mini-budget that employment would grow three-quarters of 1 per cent this financial year and 1.5 per cent in each of the next three years. A Parliamentary Library analysis commissioned by Labor found last week that this was likely to leave the Coalition at least 200,000 jobs short of its five-year pledge.
That view was broadly backed by a range of economists who said it would be very difficult for the Coalition to create 1 million jobs in five years, with the mining boom ending and with plans to make deep cuts to the federal budget.
Finance Minister Mathias Cormann declined to give details as to how the 1 million jobs figure was calculated, including the assumed employment growth rate and the unemployment rate over the next five years. He also declined to comment on the Liberal insider's account of the process.
''These commitments were all extensively canvassed during the recent election campaign; we stand by them and will be judged on our performance against those commitments at the next election - as the previous government was,'' he said.
Senator Cormann said the Coalition would improve Australia's competitiveness by scrapping the carbon tax and mining taxes, cutting red tape costs for business by $1 billion a year, reducing company tax by 1.5 per cent and investing in infrastructure.
''Lower taxes and less red tape will lead to increased investment, stronger growth and more jobs,'' he said.
Shadow treasurer Chris Bowen said the insider's comments showed the pledge was ''nothing more than guesswork''.
''Tony Abbott promised 1 million jobs in the next five years and all the evidence is that he will fall well short of this solemn pledge,'' Mr Bowen said.
He said the government had already sent the wrong signals on agribusiness, small-business tax concessions and car manufacturing.