The Australian Government has revealed that between 16,000 and 40,000 workers who were on JobKeeper during its final stage have lost employment since the $90 billion wage subsidy program was discontinued on Sunday 28th March.
The recently released figures, are drawn from estimates from Single Touch Payroll microdata for the fortnight ended Sunday 11th April, are well below the predicted 100,000 to 150,000 job losses that the Treasury had previously anticipated. The Commonwealth Bank of Australia had also earlier predicted that there would be up to 110,000 job losses due to the discontinuation of JobKeeper.
The figures appear to confirm that the employment losses associated with the completion of JobKeeper won’t derail the broader labour market recovery.
The early indicators suggest that despite there being job losses associated with the end of the wage subsidy program, many of these workers appear to have found, or already had, other jobs and have benefited from the broader strength of the labour market.
Now that unemployment is currently down to 5.6 percent, Dr Kennedy expects the unemployment rate to reach 5 percent by the end of 2022, and 4.5 percent by 2023–24.
While the labour market’s recovery has exceeded the Treasury’s expectations, the Treasury Secretary believes the government is on the right track with its current fiscal policy to further drive down the unemployment rate before stabilising and then reducing gross and net debt as a share of GDP.
Although the recovery has been stronger than expected, there is still considerable slack in the labour market and few signs of wages and price pressures.
There is also a considerable degree of uncertainty about how the pandemic will continue to play out in Australia and internationally.
“Fiscal policy has played a large role in driving down the unemployment rate to date, and we expect this to continue with the additional stimulus coming through this budget. This should in turn provide greater impetus for real wage growth” says the Treasury Secretary.
Right up until it’s completion on Sunday 28th March, JobKeeper remained to be a critical economic lifeline for 372,000 Australian businesses. New research shows that almost a quarter of Melbourne based businesses were dependent on help from the scheme during its final phase.
Businesses in regional parts of the country fared better than those in the capital cities during the final stage of the $93 billion wage subsidy scheme. Despite this, tourism hotspots such as Byron Bay and Port Douglas remained heavily reliant on the taxpayer-funded assistance right until the end.
Overall, 15 percent of Australia’s 2.4 million businesses accessed JobKeeper in January 2021. Businesses still receiving JobKeeper in January were among the most at risk of going insolvent from the medium to long-term fall out of the pandemic. Craig Dangar notes that there has been an uplift in inquiry from businesses that are looking to explore expansion options to recover revenue lost during the Jobkeeper period and an acknowledgment that there will still be structural changes required.
The number of businesses on JobKeeper had dropped significantly since the early months of the scheme – from 40 percent in August 2020 to 15 per cent in January 2020.
During the same period of time, Australia’s unemployment rates have improved since the pandemic peak in July 2020. This demonstrates that ultimately JobKeeper has been a success in maintaining the level of demand for goods and services.
The strict lockdown that Melbourne endured during its second wave of the pandemic meant that 46 percent of the businesses in Victoria were on JobKeeper during July and August last year. This percentage fell from 46 percent to 24 percent during the final phase of the scheme.
In January 2021 Sydney had a total of 17 percent of businesses receiving JobKeeper. 13 percent of Brisbane and Adelaide businesses were on JobKeeper and 11 percent of Perth businesses were still on the scheme during this same timeframe.
13 percent of businesses in non-metropolitan Victoria were on JobKeeper in January 2021. During same timeframe 12 percent of non-metropolitan businesses in Queensland, 11 percent of non-metropolitan businesses in New South Wales and Tasmania were also on JobKeeper during January 2021.
The total hours worked has also returned to the same levels that were recorded prior to the covid-19 pandemic. These figures are also illustrating hat there is a big increase in full-time employment across the country.
The recorded level of employment and hours worked in March 2021 were both higher than the levels recorded in March 2020. Employment was up by 0.6 percent and hours worked was up by 1.2 percent.
The data also illustrates that last month 62.6 percent of people over the age of 15 were employed, which is higher than March 2020 which was recorded at 62.4 percent.
The percentage of women employed is also the highest it’s ever been sitting at 58.5 per cent. This is half a percentage point higher than in March 2020. The latest figures illustrated that the percentage of men employed remained slightly lower than before the pandemic 66.8 percent, compared with 67.0 per cent in March 2020.
The number exceeded expectations for a 35,000 to 45,000 increase in jobs for the month.
The current unemployment rate is higher than it was twelve months ago, but this is mainly due to the fact that more people are looking for work, with participation around record highs at 66.3 percent.
The figures from March remain highly following an increase of 89,000 new jobs added during the month of February 2021. Of these 89,000 a total of 69,000 were women.
The new figures have emerged after there was a record number of job ads posted during the month of March. A large percentage of the job postings came from hospitality and retail sectors which were significantly impacted by covid-19 enforced lockdowns. Other industries that received a lot of job postings included tourism, healthcare, trades and services.