Employment Participation Rate

The Hon. S.G. WADE (14:36): I seek leave to make a brief explanation before asking questions of the Minister for Employment about participation.

Leave granted.

The Hon. S.G. WADE: From March 2002, the South Australian participation rate rose from 60.6 per cent in trend terms to 63.9 per cent in September 2008. Since then, it has trended downwards to the current level of 62.3 per cent, which is the lowest rate of any mainland state. Male participation in particular has fallen by 3.8 percentage points since September 2008. My questions are:

1. What factors does the government consider are the main causes of people dropping out of the workforce?

2. What strategies or programs does the government have in place to connect and re-engage workers who have abandoned their search for employment?

3. With South Australia's participation rate being so low, what level of participation is the government aiming for?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (14:38): I thank the honourable member for his question about the participation rate, as measured by the ABS in their monthly jobs figures. It is dangerous to talk about the participation rate from month to month. I know it was steady from this month's figures from the months before. If we look over the longer recent term, over the last 12 months the participation rate has increased 1.3 per cent, from 62 per cent this time one year ago up to 62.3 at the moment, so it has had a 1.3 per cent increase over the last 12 months.

The Hon. S.G. Wade: Isn't that 0.3 per cent?

The Hon. K.J. MAHER: 1.3. Twelve months ago it was 62 per cent participation rate; 12 months later (as in now) it is 62.3 per cent. Sorry, not 1.3 per cent but a 0.3 per cent increase. It has jumped around a bit but we have seen, in particular in last month's figures, an increase in female participation rate. I know there are a number of economic explanations about what may or may not influence participation rate and, when talking to the employment economists in the state government, it is always a very fraught thing to try to explain away increases or decreases in participation rates to one particular cause.

Certainly, there are those who would advocate or speculate that an increase in participation rates could be a result of people who were not otherwise interested in being part of the job market now interested because of a confidence in the economy. Equally though, economists would argue that an increase in the participation rate can result from people who previously were not at all interested in working wanting to enter the labour force because family circumstances dictate that they need a job that they did not need before. So, there are at least two conflicting views you will get from economists at either end to explain increases or decreases in the participation rate.

From this month to last month it has been relatively steady. Over the last 12 months there has been a slight increase in the participation rate, but there are myriad explanations economists will give for an increase or decrease in the participation rate. I am not going to speculate as to what is a sole cause for a participation rate increase or decrease in South Australia, except to note that it has been steady for the one month, and certainly over the last 12 months it has increased very slightly.