Unemployment at highest level in 12 years

The unemployment rate rose to 6.4% in June, the highest it has been since August 2002. 14,500 full time positions were added but 14,800 part time jobs were lost, causing the economy to lose around 300 jobs in July.

The labour force data is causing some analysts to worry, with HSBC Chief Economist Paul Bloxham calling the labour market “weak”. This is the first time since 2007 that the country’s unemployment rate finished higher than the United States, currently at 6.2%. The recent announcements caused the Australian dollar to drop to 92.96 US cents from 93.55 US cents.

Read more about this on the Sydney Morning Herald website.

Unemployment remains unchanged

The May unemployment rate remained unchanged at 5.8%, with 22,000 full time jobs added to the economy despite a 27,000 loss in part time jobs, according to the Australian Bureau of Statistics. The Reserve Bank will not make any changes to the interest rate upon hearing the news, citing the high Australian dollar and slow economic activity as factors in their decision.

The recent results are more than the forecast of 10,000 new jobs, but the drop in the participation rate is offsetting the numbers of jobs added, dropping to 64.6% as opposed to 64.7% for the previous month. The younger generations are also having trouble looking for a job, where there are 126,000 fewer jobs for people under 25.

Read more about this on the Sydney Morning Herald website.

Jobs up for the fourth straight month

Employment has been on a roll for the fourth straight month, with companies adding 14,200 jobs to the economy, according to the Australian Bureau of Statistics. The increase in jobs are twice as expected based on forecasts by the Reserve Bank, clear signs that the jobless rate is peaking and that possible rate hikes loom in the future.

Economists predicted an adaditional 8,800 jobs for April, with a jobless rate of 5.9%. The results are impressive as it was almost double than predicted, with the jobless rate pegged at 5.8%. Upon release of the employment data, the Australian dollar jumped to a day’s high of 93.62 US cents. New South Wales and Queensland were the leading states for employment, while Western Australia lost jobs in the weakening mining sector.

Read more about this on the Age website.

Government to offer unemployment benefits starting July 1

A new scheme is in the works to assist unemployed individuals with new incentives to assist in fees, bond and rent for job seekers aged 18 – 30 years old. A total $157 million is allotted for this scheme, according to Minister for Employment, Eric Abetz.

Individuals will be receiving $2,500 for being employed for the first year, and an additional $4,000 for two years. Relocation assistance will also be provided – up to $6,000 for families moving to a regional area and $3,000 for those relocating to a city. Unemployed parents with dependents can receive up to $9,000 in government funding.

This government initiative is driven by the Social Security Legislation Amendment Bill of 2014, which also requires individuals to receive the Newstart Allowance or Youth Allowance Other for 12 months, provided that they are employed for a minimum of 12 months off benefits.

The relocation assistance is a replacement of the Move 2 Work initiative, which will expire on June 30 this year. All bonuses are tax free.

Read more about this on the Property Observer website.

Securing Home Loans for the Self-Employed

Self-employment has its rewards. Self-employed contractor and freelancers get to decide on their own work hours, not being tied down by a company’s strict rules and guidelines. Too often too, self-employed individuals get higher pay than regular employees. But once you start looking to secure a home loan, then you begin to see the disadvantages of being self-employed. Traditional creditors are mandated to look at employment as a basis for loan approval.

Currently, it is very difficult and close to impossible to secure self employed home loans. Self-employed individuals are easily frowned upon by lending companies, regarded as not having a “stable” source of income. Lending companies have traditionally looked at self-employed people as a potential risk in terms of debt repayment. They require borrowers to be employed in a company for a minimum number of years before they can even be considered for loan approval.

Luckily for self-employed individuals, there now are specialist lenders that have turned away from the traditional manner of evaluating their capacity to pay debts. These companies will evaluate details of the income history of the self-employed individual, instead of immediately turning down the loan applicant simply because they do not have an “employed” status. Self employed home loan can be availed either through a Full Doc loan or a Lo Doc loan. In Full doc loans, the borrower furnishes proof of income such as tax returns of the two previous years. If you are able to provide proof of income to the lender, it would be much easier for you to secure a home loan. For self-employed borrowers who do not have tax returns for the previous years, the Lo Doc is the alternative.

Self-employed borrowers may choose to secure a home loan via a low doc loan system, where less documentation is required for loan approval. However, due to the recent economic crisis across the globe that had been caused by irresponsible handling of mortgages in core countries, tighter rules have been enforced in approving lo doc loans. The Federal Government has made new guidelines as to how lenders are to approve loans for self-employed individuals. Under the new rules, lenders should not fully trust the word of a self-employed borrower, but they should require some form of documentation to verify the pronouncements.

If you are self-employed and are looking to secure a home loan, the best thing to do is to get as much documentation as you can to prove your income generation. That way, you will have better chances of getting a loan. These documents may include bank statements, your Business Activity Statement (BAS) or other documentation showing you earn on a regular basis.