Former Treasury Secretary Ted Evans, who was the best in living memory according to Treasury old timers, gave a great speech in the 1990s in which he noted something along the lines of “a country chooses the level of unemployment it has.” While of course international factors are important, Evans was correct in so far as Government policy can certainly make the labour market situation worse, especially if it maintains regulations that make it difficult to hire and fire and which set unrealistically high minimum wages.
Now as the outgoing chairman of Westpac Ted Evans is warning the Government not to over-regulate the economy (Westpac to go its own way on rates), and given the frustration of Australian business with the new Fair Work Act I expect in part he is warning about IR regulations.
A big test of the new Fair Work Act will be whether unemployment gets down to around 4% as it did under Work Choices, which I’m very surprised the ABS forgot about in its timeline of major events impacting upon Australia’s labour force in the latest Australian Social Trends. According to the ABS nothing significant happened between 1992 when unemployment peaked at around 11% and 2009 when the Fair Work Act was introduced.
I’m a bit concerned that people at the ABS didn’t notice that Australia experimented with a radical IR reform, Work Choices, that signficantly reduced the cost of hiring people at the bottom end of the labour market (by allowing the removal of costly entitlements) and which saw unemployment reach a rate not seen since the 1970s. I guess being stuck out at Belconnen the ABS could miss some of the policy debate but I find this level of ignorance extraordinary.
Queensland Economy Watch 
You’re making the assumption that the omission was due to “extraordinary ignorance”, rather than creeping politicisation, or some other factor – like the omission by a junior statistician not being picked up in editing due to resource constraints in the organisation.
I’m not sure that it can be conclusively demonstrated that workchoices had any positive effect on unemployment. After spiking up sharply in the wake of the 1990 recession, unemployment followed a long downtrend until around 2009 – when not only was the fair work act introduced, we were rocked by the effects of GFC (though we suffered very much less than many other countries).
The point is: unemployment fell for years before workchoices existed. It fell during the period workchoices was active. And it continued to fall after workchoices was scrapped. It fell under both Labor and Coalition governments. It fell during a long period of economic growth of which workchoices only occupied a very small part.
Typically when we see correlation, we tend to suspect causation. In this case however, it seems difficult to see any correlation as a starting point.