Jobs and doctor visits go as RBA war on inflation cuts deep

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A third of businesses are considering laying off workers before Christmas while more than 1.2 million people have delayed medical appointments or prescription refills because of their cost as the Reserve Bank’s war on inflation intensifies financial pressure on companies and households.

The growing cost pressures faced by Australians are fuelling an increasingly bitter political debate.

Next year is looking cooler for the jobs market, with more businesses planning to lay off workers ahead of Christmas.Credit: Louise Kennerley

Peter Dutton says Prime Minister Anthony Albanese is missing in action as families faced growing grocery and energy bills, prompting Treasurer Jim Chalmers to accuse the opposition leader of lying about the economy.

Earlier this month, the Reserve Bank board lifted the official cash rate to a 12-year high of 4.35 per cent in a bid to bring down inflation, which is not expected to return to the institution’s 2-3 per cent target band until late 2025.

RBA governor Michele Bullock, who has declared inflation will remain the bank’s biggest challenge for the next two years, said on Tuesday the country’s jobs market had been a bright spot in the economy coming out of the COVID-19 pandemic.

“We have had … fabulous performance on unemployment, but more generally, across the board, underemployment, hours work, all of these things have been really, really positive,” she said at the ASIC annual forum in Melbourne.

But there are growing fears for the jobs market as borrowers struggle with the Reserve Bank’s interest rate increases.

A survey to be released on Wednesday by the long-standing Australian HR Institute shows 31 per cent of its members are expecting to retrench staff this quarter. Three months ago, just 17 per cent were expecting to axe workers.

In a sign of the churn facing the labour market, 71 per cent of businesses are planning to take on staff.

Institute chief executive Sarah McCann-Bartlett said businesses could be reorganising their operations while also recruiting for existing or new roles.

“Either way, 2024 looks a more challenging year for employers and workers,” she said.

Deloitte Access Economics is also expecting the jobs market to stumble because of the Reserve Bank’s aggressive monetary policy tightening since last May.

It is forecasting the country to create just 75,000 jobs next year, after adding more than 405,000 this year.

Deloitte partner David Rumbens said the jobs market was entering a “cool summer” as the combination of high interest rates and elevated inflation weighed on consumers and their spending plans.

He said the manufacturing sector could shed 4 per cent of its workforce, or almost 39,000 positions, while the wholesale trade sector faced the loss of 11,200 workers over the coming year.

“Due to the high share of blue-collar workers in the manufacturing industry, the blue-collar workforce will likely bear the brunt of the labour market slowdown,” Rumbens said.

A lift in unemployment would add to the financial pressures facing many Australians, who are now forgoing medical treatments because of costs.

The Australian Bureau of Statistics said on Tuesday the portion of people who needed to see a GP but either delayed or did not see their doctor because of cost had doubled in the past year – from 3.5 per cent in 2021-22 to 7 per cent in 2022-23. At the same time, GPs reported their average fee for a standard visit jumped from $64 last year to $75 this year.

The rate of people missing or delaying GP appointments because of cost is the highest since figures started being recorded in 2013-14.

The portion of people who skipped medication purchases jumped from 5.6 per cent to 7.6 per cent in 12 months – the highest rate since 2015-16.

Young people were the most likely to forfeit healthcare because of cost-of-living pressures.

More than 10 per cent of 25- to 34-year-olds delayed or cancelled a doctor’s appointment they needed, compared to 2.3 per cent of people aged 75 to 84.

Almost 750,000 of the 3.9 million Australians who need to see a mental health professional also skipped or delayed their appointments because of money last year, including half a million who could not afford to see their psychologist.

Dutton said the government had made decisions over two budgets that had forced the Reserve Bank to drive up interest rates.

“The government’s energy policy continues to drive up inflation, which means you’re paying more for your mortgage because it’s not just you in your family household or your small business paying more for your electricity or paying more for your groceries – it’s everybody else in the supply chain,” he said at a press conference in Victoria on Tuesday.

But Chalmers rubbished the opposition leader’s claims, pointing to ABS data that showed electricity prices would have jumped 18.6 per cent in the September quarter, but instead rose 4.2 per cent due to the government’s bill relief.

“Peter Dutton thinks he can lie about the economy all he likes, but this just proves that his nasty negativity is no substitute for economic credibility,” the treasurer said in a statement.

“He voted for higher energy prices and higher inflation in the parliament. Now he wants to pretend otherwise.”

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