The Reserve Bank of Australia (RBA) have long complained that too few people are unemployed. They will no doubt be happy then that unemployment in April rose to 4.5% - the highest level since 2021 – and before the full impact of the rates rises this year take effect.
Thu 21 May 2026 13.50 AEST
Photo: AAP Image/Dean Lewins
The Reserve Bank have long complained that too few people are unemployed. They will no doubt be happy then that unemployment in April rose to 4.5% – the highest level since 2021 – and before the full impact of the rates rises this year take effect.
It’s quite incredible just how consistently wrong the Reserve Bank has been about the economy this year. And today’s unemployment figures for April reveal once again how utterly detached from the reality of the economy those running our central bank are.
In the minutes of the May Reserve Bank Monetary Policy Board meeting, published this week, it was noted that “most indicators of the labour market had been little changed since the March meeting and had affirmed the staff’s judgement that aggregate conditions were still a little tight relative to full employment.”
Well, today the Bureau of Statistics revealed that in April unemployment rose from 4.3% to 4.5%, to reach the highest level in 53 months:
Make no mistake – the rise in unemployment is the Reserve Bank’s doing.
They saw the war in Iran, the rising petrol prices and the weak wage growth and decided the economy was not bad enough. Worried about a mythical wage-price spiral, they raised interest rates in April and May despite acknowledging it would do nothing to lower inflation.
Instead, as the minutes of the board meeting make clear, the RBA wanted unemployment to rise just to make sure no workers thought they should be arguing for higher wage growth to counter the impact of the cost-of-living shock from the Iran War.
No, the RBA wants workers to just be thankful that they have a job, and to let companies continue on making profits and paying workers as little as possible.
The April figures are terrible news. There were 18,600 fewer people employed in April than in March with the biggest falls coming for young workers – some 35,160 workers aged 15-19 lost jobs in April – a 4% fall. That is the biggest one month fall for youth employment since the lockdown in September 2021 and before the pandemic, the worst since September 2001. This is worrying, because when an economy slows, young people are usually the first to lose their jobs.
Across most age groups, annual employment growth slowed, and the annual 0.9% employment growth is much slower than population growth:
It is a sign that the Reserve Bank may have been far too cavalier in raising rates.
In January, the unemployment rate was 4.1%, and the cash rate was at 3.6%. Since then, the RBA has raised the cash rate to 4.35%, and unemployment has risen to 4.5%.
Worryingly, that is the same pace the unemployment rate rose during the Global Financial Crisis (GFC) back in 2008-09:
Let us hope the RBA wakes up soon to the risks of a recession that it is increasing with every rate rise.
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Former Prime Minister Paul Keating has stepped into the debate on changes to the Capital Gains Tax (CGT) announced in last week’s budget with a full-throated defence of the Government’s proposals.
Before I began the major reform of the tax system, as Treasurer in 1985, capital profits in this country were completely untaxed. The takeover merchants were taking over industrial companies, closing down the businesses, selling off assets, taking the profits free of any taxation.
