‘No spike’ in job losses

Experts optimistic on employment as wage subsidy comes to an end

THE end of the government’s flagship JobKeeper wage subsidy program will not cause a spike in unemployment, say economists.

They predict the rapid pace of Australia’s economic recovery will absorb the newly unemployed within months.

The $90bn program will end on Sunday and Treasury Secretary Steven Kennedy has flagged that 100,000 to 150,000 jobs could be lost as JobKeeper winds up.

Deloitte Access Economics partner Chris Richardson said last quarter’s strong economic growth rate of 3.1 per cent made him hopeful “it turns out to be towards the bottom end” of Treasury’s forecast.

“Surveys indicate there are a fair amount of job vacancies out there, some of the sectors that will lose most jobs are also the ones saying they will take on more people,” Mr Richardson said.

“In other words, old jobs may die but there is a degree of match with new businesses opening up – but the bottom line is that the job recovery has been marvellous to date.

“My best guess is that this time by June or July we would have won back the jobs lost.”

AMP Capital chief economist Shane Oliver said he was “relatively optimistic” fewer than 100,000 jobs would be lost. “We’ve gone from something like one million people working zero hours to around 70,000 in February, so on that basis our estimate for jobs loss is around 70,000 to 75,000,” Dr Oliver said.

NAB chief economist Alan Oster said business revenue data available to the bank showed reliance on JobKeeper payments had fallen considerably. “Across the board, the reliance on JobKeeper is nowhere near where it was six months ago,” Mr Oster said.

“The job rate might go sideways or slightly backwards, but I wouldn’t expect any macro shocks.”

Mr Oster said the shift of economic activity from CBDs to the suburbs will concentrate job losses among inner-city accommodation and hospitality businesses.

HSBC Australia and New Zealand chief economist Paul Bloxham said he expected the end of JobKeeper would take some wind out of the economy’s sails.

“Although the economy is reopening, it is not reopening fully — the international border is still closed and that will test a few business models once the support from the wage subsidy is removed,” Mr Bloxham said.