Unemployment soars to its highest rate in 26 years with 1.4million Australians set to lose their job due to coronavirus pandemic
Australia’s unemployment rate will likely nearly double to peak at 10 per cent for the June quarter as a direct result of the coronavirus crisis.
Treasurer Josh Frydenberg said early investigations suggest that figure would’ve been about 5 per cent higher had the government not introduced the JobKeeper stimulus package, worth about $130 billion.
At least 1.37 million people will be out of work by June according to the projections, but that number could have soared to 2.05 million had workplaces not been offered an incentive to keep staff on the books.
Unemployment has not reached double digits in Australia since April 1994, 26 years ago. Australia’s peak unemployment rate of 11.2 per cent was in 1992.
More than 300 people lined the streets of Sydney after losing their jobs, desperately waiting to get into Darlinghurst’s Centrelink office to claim unemployment amid the coronavirus pandemic
People are seen in a long queue outside a Centrelink office in Brisbane after losing their jobs
Prime Minister Scott Morrison described the predicted figures as ‘heartbreaking’ during an interview with the Today Show on Tuesday morning.
‘It’s a heartbreaking number. Unemployment at that rate, hundreds of thousands of people losing their jobs. It is just absolutely heartbreaking,’ he said.
In February, before the pandemic led to major shutdowns and mass stand downs of workers, the jobless rate was 5.1 per cent.
Economists feared that number would triple – or worse – in the months to follow after the government restricted all unnecessary travel and told people to stay home to slow the spread of the virus.
‘In the absence of the $130bn JobKeeper payments, Treasury estimates the unemployment rate would be five percentage points higher and would peak at around 15 per cent,’ Frydenberg said in a statement.
‘More than 800,000 businesses have already registered for JobKeeper payment, which will allow the economy to recover more quickly once we are through to the other side of the crisis.’
Queues stretched around the block for medicare offices throughout Australia as hundreds of thousands of hospitality and retail staff were let go
The forced closure of cafes, bars and restaurants has forced some out of business entirely (like this cafe in Mollymook on the NSW south coast)
The JobKeeper payment is just one of three separate stimulus packages the government has proposed to inject $320 billion – or 16.4 per cent of GDP – back into the Australian economy.
After it was announced, Westpac chief economist Bill Evans updated his forecasts to have unemployment peak at nine per cent in the June quarter instead of the initial 17 per cent.
‘We expect the beneficial effects of the Government’s JobKeeper policy to restrict the rise in the unemployment rate to a peak of 9 per cent at June 2020 and to then see it fall back to around 7 per cent at year’s end,’ he said in early April.
He credited the government’s third stimulus package, which grants six million workers, through their employer, $1,500 a fortnight to be kept on the books for the next six months.
Australians will get an early taste of what the pandemic has meant for unemployment when March labour force figures are released on Thursday.
Economists’ forecasts centre on an unemployment rate of 5.4 per cent for March, compared with 5.1 per cent in February.
Predictions range as high as 5.9 per cent, a level not seen since early 2016.
Treasurer Josh Frydenberg on Sunday warned Australians to expect a significant rise in the unemployment rate alongside a big reduction in the rate of economic growth as a result of the coronavirus crisis.
‘That’s a reflection of the queues we have seen outside Centrelink and that is the reflection of the health restrictions that have had a severe economic impact,’ he told the ABC’s Insiders television program.
He said the current crisis was more significant than what was experienced during the global financial crisis more than a decade ago, and promised ‘every arm of government and industry is working to keep Australians in jobs and business in business, and to build a bridge to recovery on the other side.’
WHAT IS THE $130BILLION JOBKEEKER PACKAGE?
JOBKEEPER SUPPORT PLAN
* Workers will get $1500 per fortnight through their employers
* It’s equal to about 70 per cent of the median wage
* Total cost of $130 billion for a six-month period
WHO CAN GET IT?
* It applies to full and part-time workers, as well as sole traders
* Casual workers will get it if they’ve been on the books for 12 months or more
* Workers stood down since March 1 are eligible
* Six millions Australians are expected to benefit
* Kiwis on 444 visas will also get the payment
WHICH COMPANIES CAN APPLY?
* Those with turnovers that have fallen by at least 30 per cent
* For businesses with annual turnovers of more than $1 billion, that must have fallen by 50 per cent or more
* It also applies to not-for-profits
* Companies can register on the tax office website
WHEN WILL PAYMENTS START?
* From May and backdated to March 30
* Parliament will reconvene to pass the underpinning legislation
– Australian Associated Press