Job plan a lifeline to 700k workers

THE federal government’s JobKeeper program saved 700,000 Australians from the unemployment queue during the darkest depths of the coronavirus pandemic, the Reserve Bank says.

A study by the RBA has found one in five of the 3.5 million workers who received the wage support payments of $ 1500 a fortnight would have lost their jobs if the program were not in place.

“Without JobKeeper, employment would have fallen by twice as much as it did,” report authors James Bishop and Iris Day wrote.

Treasurer Josh Frydenberg said the analysis “confirmed the Morrison government’s JobKeeper program was a country- saving moment”.

The central bank’s business liaison program and other surveys have pointed to the wage subsidy playing a major role in keeping workers attached to employers during the pandemic.

But the study, titled How Many Jobs Did JobKeeper Keep?, was the “first to rigorously estimate the contribution of JobKeeper to stemming employment losses during the first few months of the scheme”, the authors said.

Mr Bishop and Ms Day studied labour force numbers from the Australian Bureau of Statistics over the first four months of the scheme.

They contrasted the experience of casual workers who had been with employers for longer than a year against similar employees who had been employed for between six and 12 months, and therefore were not eligible for the wage subsidy scheme.

Treasury has previously estimated its package of measures including JobKeeper had saved 700,000 jobs.

The RBA paper backed up those findings, and suggested, if anything, that Treasury may have underestimated the impact of the wage subsidy program in terms of jobs saved.

It did not include the impact on employment from the boost to overall demand in the economy as a result of JobKeeper.

The scheme is likely to have had an even greater impact in sectors heaviest hit by restrictions through the pandemic.

In a survey for accounting firm Deloitte, three- quarters of retailers said the scheme helped them avoid redundancies.

It remains to be seen how many of the 700,000 “saved” jobs will last after the government started tapering JobKeeper on September 28.

The program is due to end after March.

The RBA economists only said the 700,000 estimate provided an “upper bound” — loosely the upper limit to the potential range — on how many could lose work when income support ended.