Australia's unemployment rate is about to be doubled. How the COVID-19 pandemic has affected the job market severely (and why it might get worse)
Deepak Gopalakrishnan | On 20, Apr 2020
Treasurer Josh Frydenberg recently revealed that he is concerned about the jobless rate and the financial situation of thousands of Aussies. So far, more than 800,000 people have signed up in hopes of getting some financial aid from the government’s ‘JobKeeper’ funds. Will it get a lot worse before it gets any better?
What the stats say
The unemployment rate currently stands around 5.1%. However, according to Josh Frydenberg, it might reach double digits and surpass 10% by the end of the June quarter. Stating that it reflects the financial/economic crisis the country is facing, John admitted that he is extremely concerned about the situation.
Will it get any better?
John said that there would be new job opportunities for Australians on the other end of the crisis. He added that it would be a “team Australia moment” when hundreds of thousands of Aussies will search for jobs again and try to fill the gaps in the market.
He stated that are “certainly some challenges ahead,” adding that despite this storm, social distancing is still of paramount importance – and getting ahead of the medical advice would be “dangerous and unrealistic.”
It could have been worse.
The Australian government allocated 130 billion dollars as ‘JobKeeper payment’ to support the unemployed and the businesses. Now, it has been the saving grace of the market. Treasury estimated that the unemployment rate might have broken the 15% mark without this fund.
In addition to the above, there are welfare funds in action, along with many government departments (and private organisations) opening their doors to new job opportunities; to make sure government operations (and essential services) keep running smoothly.
The fund is turning out to be a game-changer, helping around 6 million Aussies to get fortnightly payments of $1,500 (before taxes) from their respective employers. These funds are ensuring that employers and businesses can retain their workforces in this time of crisis.
If your enterprise or business has suffered catastrophe because of the COVID-19 pandemic, you can apply for a wages subsidy, which will allow you to keep paying your staff. This will also help you restart things once the crisis is over. You can find the rules for this subsidy here. You can also read their explanatory statement here.
How Australia is keeping it together
Australia is also one of the only ten countries in the world to hold its AAA credit rating amid the COVID-19 pandemic and the economic slowdown.
Earlier, the economists had predicted unemployment rates to be in the 5-9% range (which is a level that has not been seen since the first half of 2016). However, the JobKeeper fund is working and slowly changing the statistics.
As Australia, like most countries, struggles with the economic consequences of the COVID-19 pandemic, the government is trying to make sure the damages aren’t catastrophic. What’s left to see now, is if the government will be able to recover quickly after the worse is over.