The concept of full employment is not just central to our Employment White Paper, Working Future, it is a cornerstone of the Albanese Government's entire approach.
It's an idea that was prominent in the discussions at last year's Jobs and Skills Summit, we've put it front and centre in the budget's economic and fiscal strategy, and it shapes and guides our policy making at all levels.
That's why we really welcome the current debate about full employment, its definition and the strategies to achieve it.
There's never been a better time to re‑examine the way we think about full employment.
Consider this remarkable fact: of the 18 months that the unemployment rate has had a three in front of it since monthly records began in 1978, 15 of those 18 months have been under this government.
We should see this as the perfect opportunity to reconsider how we measure and how we target full employment.
We know the unemployment rate, as important as it will always be, doesn't always tell the full story of underutilisation and underemployment in our economy, or the distribution of opportunity in our society.
It doesn't always capture the differences and the complexities of frictional, cyclical and structural factors at play in our labour market.
While more people are working in Australia than ever before and the participation rate is at a record high, there is still considerable untapped potential.
There are around 3 million people in Australia who want work or want to work more hours - equivalent to a fifth of the current workforce.
It is clear labour market outcomes vary significantly across the country.
It is also clear for too long the cost of unemployment has been borne disproportionately by some groups in the community - the young, seniors, women, First Nations people, those with a disability, migrants and those living in disadvantaged areas.
This indicates more can be done to reduce structural underutilisation, expand employment opportunities and increase economic potential.
When monitoring the labour market, economists frequently refer to an indicator known as the NAIRU, the non‑accelerating inflation rate of unemployment.
The concept is about what level of unemployment is currently achievable that is consistent with low and stable inflation.
The Reserve Bank and Treasury use the NAIRU as part of their assumptions and forecasts for the economy - it's necessary and important but also a narrow and technical way to look at the labour market.
The NAIRU informs and complements the Government's broader and longer‑term goal to create an economy where everyone who wants a job can find one without having to search for too long.
We don't see the NAIRU as set in stone, we want to drive it down over time - by reducing the structural barriers to work.
That's why we've adopted twin goals of sustained and inclusive full employment.
Sustained full employment is about minimising volatility in economic cycles and getting employment as close as possible to the current maximum level consistent with low and stable inflation.
Inclusive full employment is about broadening opportunities, lowering barriers, and reducing structural underutilisation over time to increase the level of employment in our economy.
A short‑term focus on sustained full employment does not and should not come at the expense of the longer‑term and more ambitious objective of expanding opportunities in our labour market to more people.
These twin goals do not put us at odds with the Reserve Bank, as some commentators have wrongly concluded ‑ in fact I consulted the Governor on this approach and she has publicly and repeatedly backed it in.
The important shift in the way we think about full employment is outlined in Working Future, a document with a heap of analysis but with an emphasis on action.
And this new bolder, full employment objective is what underpins and unites the 70 actions we've implemented, the 80 actions that are underway and 31 future reform directions that are detailed in the report's pages.
We are taking comprehensive action, including improved education, migration and regional planning systems.
We are equipping the workforce with the skills needed for the jobs of the future, enhancing the ability of individuals and businesses to adapt to the modern labour market, and breaking down barriers affecting people's ability to participate.
This approach and this agenda for full employment is central to the Albanese Government's plan to build the workforce we need for a stronger, fairer and more inclusive economy.
