The recent lift in unemployment across Australia to its highest level since the pandemic “points to the impact that our weak private sector is having on the labour market”, according to Australian Industry Group CEO Innes Willox.
Data from the Australian Bureau of Statistics (ABS) showed the employment rate lifting to 4.3 per cent in seasonally adjusted terms, with an additional 33,600 people looking for work. It is the highest unemployment rate since November 2021.
"This unfortunate outcome is a consequence of our weak private sector labour market,” Willox said. “For over a year, there has been negligible jobs growth in the private market sector, with government-supported employment in the public and non-market sectors doing the heavy lifting.”
Year-on-year job vacancies in the May 2025 quarter – the latest results – show low single-digit declines across trend, seasonally adjusted and original terms, with private sector leading in trend terms, down 2.8 per cent compared to 1.4 per cent in public sector vacancies.
"During 2024, approximately four in five new jobs created in Australia were in these government-supported sectors,” Willox said. “As the Australian Industry Group has been warning since the start of this year, this level of dependence on the taxpayer for job creation is plainly unsustainable.
"With the private market sector accounting for two-thirds of employment in Australia, it was inevitable that its sustained weakness would eventually spill over to the broader labour market. It appears this problem is now coming home to roost.”
"It is therefore imperative that government takes immediate action to return the private sector labour market to health. There is much that can be done – on tax, energy, regulatory burden, industrial relations and more – to provide better policy settings for private sector investment and jobs creation.”
The rising unemployment has also been noted by Roy Morgan research, with its data showing unemployment at 10.4 per cent. The higher comparison to ABS data is due to Roy Morgan classifying anyone as unemployed if they are looking for work, no matter when.
Roy Morgan CEO Michele Levine said the first full month of the re-elected Albanese Government shows a continuing issue of persistently high unemployment and under-employment, at over 3 million, or more than 20 per cent of the workforce.
“So far this year, average total unemployment and under-employment has averaged 3.26 million (20.5 per cent),” Levine said.
“The share of Australians aged 14+ now employed did increase in June, up 0.8 percentage points to 61.6 per cent. However, this share remains well below the average of 2022-2024: 62.9 per cent when overall unemployment and under-employment was significantly lower.
“Clearly the high jobs growth of the last three years (up 867,000 since June 2022) has not kept pace with the even more rapidly rising population (up 1,845,000 – a record high figure over a three-year period) or the much larger workforce (up 1,396,000 since June 2022).”
Levine added that the gap between the rising workforce and increasing employment levels is filled by more people joining the ranks of the unemployed – up a large 529,000 compared to three years ago.
“Tackling the persistently high level of labour under-utilisation presents a tremendous challenge for the re-elected Albanese Government which secured a record-breaking re-election victory in early May,” she said.
“The Government now has three years to return the Australian economy to sustainable growth and finding gainful employment for the over 3 million Australians either unemployed or under-employed.”