Scott Morrison wants to see the unemployment rate below four per cent in the second half of this year, but Employment Minister Stuart Robert says it could come sooner.
As of December the jobless rate already stood at 13-year low of 4.2 per cent.
The prime minister, just months out from a federal election, told the National Press Club on Tuesday an unemployment rate with a “three” in front was achievable – a level not seen in over 50 years.
“It could happen very, very quickly because of the amount of effort we are putting into training Australians,” Mr Robert told ABC radio on Wednesday.
“This is something we very committed to because it just changes lives. We are seeing a generation of skills coming through that we haven’t seen for a long, long time.”
Reserve Bank of Australia governor Philip Lowe has a similar view for the jobless rate, falling below four per cent this year and being around 3.75 per cent by the end of 2023.
Deputy Opposition Leader Richard Marles said low unemployment is obviously “a good thing”.
“But there is still considerable underemployment in Australia today, a lot of people who are working but want to have more work,” he told Sky News.
He also scoffed at the idea that the Morrison government could win the election based on its economic management
“This is a government which has racked up more than a trillion dollars of debt and there is very little to show for it,” he said.
“This is the second highest taxing government, next to the Howard government, which we have seen since the Second World War.”
Dr Lowe will address the National Press Club in Sydney later on Wednesday where he will get the opportunity to explain his thinking on the outlook for interest rates.
The governor stuck to the line of being “patient” before lifting the cash rate from a record low 0.1 per cent in his statement following Tuesday’s first board meeting of the year.
Financial markets, which are pricing in the risk of a rate hike by mid-year, had been expecting something more definite in its guidance following the recent drop in the unemployment rate and a surge in inflation pressures.
The RBA did announce the end of its multi-billion dollar bond buying program as economists had expected, which had aimed to keep market interest rates and borrowing costs low.
“Ceasing purchases under the bond purchase program does not imply a near-term increase in interest rates,” Dr Lowe said.
Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)