Unemployment in Australia is a situation in the labour market where people are actively seeking a job at current wage rates but are unable to find one. Unemployment can pose an extreme problem within economies when at substantial rates, however through strategic use of both macroeconomic and microeconomic policies the Howard Government has been able to curtail its effects. Unemployment is currently at 5.5%, a rate judged to be the Natural Rate of Unemployment.

The Natural Rate of Unemployment is the rate of unemployment that is consistent with full employment. As this rate represents the supply constraint of the labour market any increase in aggregate demand will result in inflation.

The Natural Rate of Unemployment indicates that the Government has eliminated cyclical unemployment. Australia has been able to achieve this due to macroeconomic management enabling 13 years of strong sustainable economic growth of between 3.5%-4%. Also, as the Natural Rate...