Professor Mark Wooden says governments should focus on job creation instead of job protection to halt rising unemployment.

Professor Wooden says state and federal government policies focused on saving jobs are “misplaced” and should be redirected toward job creation.

He says a number of declining industries are going to die out no matter how much funding is provided, and that the recession is “just the mechanism that accelerates the process”.

“Government policy has to think not only about saving jobs but also creating jobs and creating conditions under which employers feel a little less cautious about hiring people,” he says.

“I think this idea gets a little lost when we are too focused on job preservation”.

Professor Wooden agreed that the inclusion of an $8 billion investment toward major projects in the new Victorian State Government budget - with the intention of creating 35,000 jobs - was a good one.

Professor Mark Wooden is Deputy Director of the Melbourne Institute of Applied Economic and Social Research.