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- Australia’s workforce is preparing for a potential spike in unemployment after the JobKeeper Payment Program ended on Sunday
- The wage subsidy was implemented to help eligible businesses and workers impacted by the COVID-19 pandemic
- Australia’s Treasury Secretary expects between 100,000 and 150,000 people to lose their jobs after JobKeeper support ends
- Treasurer Josh Frydenburg has stated that other support from the Federal Government will be implemented in JobKeeper’s absence
- However, unemployment rates may be further exacerbated on March 31, when the JobSeeker coronavirus supplement is set to end
Australia’s workforce is preparing for a potential spike in unemployment after the JobKeeper Payment Program ended on Sunday.
On March 30 of last year, the Federal Government implemented the JobKeeper Payment Program, which was designed to help businesses and workers impacted by the COVID-19 pandemic.
Prime Minister Scott Morrison said at the time that the subsidy would provide millions of businesses and their workers with a lifeline to get through the crisis, allowing them to bounce back on the other side.
“This is about keeping the connection between the employer and the employee, and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months,” he said.
The JobKeeper subsidy started off with an initial six-month period but was extended from September 28 until January 3, 2021. This was then followed up by a second extension of the program until March 28, 2021, just days shy of a year after it was first announced.
When announcing the extensions to the programme, the Government also stated that its fortnightly rate would slightly decrease and would be applied through a two-tiered payment system.
Under the JobKeeper 2.0 system, people working 20 hours or more in the four-week period before March 1, 2020 were entitled to a higher rate, while those who worked under 20 hours on average were entitled to a partial rate.
From September 28, 2020 to January 3, 2021, the full fortnightly rate was $1200 and the partial rate was $750. From January 4, 2021 to March 28, 2021, the full fortnightly rate was $1000, and the partial rate was $650.
Australia’s Treasury Secretary, Dr Steven Kennedy, is concerned about how the country’s workforce will be impacted with the program now finished. During a Senate Estimates hearing on Wednesday last week, Dr Kennedy predicted that between 100,000 and 150,000 workers who were supported by JobKeeper may lose their jobs.
The following day, Deputy Labor leader Richard Marles condemned the Federal Government for cutting off support to over a million Australians.
“Treasury is warned that up to 150,000 Australians currently on JobKeeper will lose their jobs,” he said.
“How many Australians will be left behind by this government when the Prime Minister rips away JobKeeper this Sunday?” he asked.
It’s expected that many of the people who will fall into unemployment without JobKeeper will transfer to the JobSeeker income support program, while they look for new jobs. Unfortunately, they are unlikely to find any solace there, as the coronavirus supplement to JobSeeker will end three days after JobKeeper did – March 31, 2021.
As a result, a single person on JobSeeker will go from receiving $720.80 a fortnight to $620.80 next month. That will represent a reduction of $44 a day, further decreasing the amount that struggling people will have to spend on essentials like rent, food and other regular bills.
Back in February, the Australian Reserve Bank’s Governor, Dr Philip Lowe, warned against cutting the coronavirus supplement and even suggested a permanent increase in unemployment benefits.
“For me it’s not a macroeconomic management issue, it is a fairness issue: what is the appropriate level of support we should provide to people who are unemployed?” he asked.
Dr Lowe has received public criticism about his suggestion from some politicians. One such critic, Liberal MP Tim Wilson, argued that Dr Lowe’s comments about income support were outside of his mandate as Governor of Australia’s Reserve Bank.
