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Summary
- Approximately 150,000 more people could be looking for work following the rollback of end of JobKeeper.
- As of April, the standard JobSeeker payment has fallen from AU$715.70 to AU$620.80 per fortnight for single people and from AU$660.80 to AU$565.40 for partnered people.
- The rollback, coupled with more stringent mutual obligations, could see unemployment levels rise to above 7%.
The Australian Treasury believes jobless numbers may rise by as much as 150,000 as a result of the end of JobKeeper scheme on 28 March 2021.
Although the next figures will not be published until 20 May 2021, nine days after next month’s budget, Treasury expects to see a dramatic increase in jobless numbers, with one estimate from Jeff Borland at Melbourne University predicting that the number could be as high as a quarter of a million.
Treasury anticipates a considerable increase in unemployment figures (Source: © Casaalmare | Megapixl.com)
JobSeeker Rollback
The last figures, published in March, reported that unemployment fell to 5.6%. This number is predicted to increase in the upcoming May report.
In addition to the end of JobKeeper, JobSeeker payments also took a hit. As of 1 April 2021, unemployment benefits in the form of JobSeeker and Youth allowance (for those younger than 22) were reduced to levels not seen since before the COVID-19 crisis. The standard payment fell from AU$715.70 to AU$620.80 per fortnight for single people and from AU$660.80 to AU$565.40 for partnered citizens.
Moreover, the income singles can earn, whilst still claiming benefits, has fallen from AU$300 per fortnight to AU$150 per fortnight. Besides, the rate at which a partner’s income lowers benefits rose from 27% to 60%.
The result of the removal of JobKeeper is that employment growth will likely be significantly weaker in the coming months with unemployment likely to rise above 7%.
The only possibility that unemployment will not rise is if more people get off government benefits and get out of the workforce as opposed to staying on benefits whilst searching for work. This, however, seems unlikely.
ALSO WATCH: What is Unemployment?
Mutual Obligation Changes Will Make Staying on Benefits Less Attractive
To add to the reduction of JobSeeker payments, changes have also been made to requirements for mutual obligation. Mutual obligation requirements are tasks and activities a person must adhere to while getting certain payments from the government.
The changes in mutual obligations mean that from April 2021 the minimum number of job applications jobseekers need to report each month climbed from 10 to 15. It will further jump from 15 to 20 from July.
Benefits for those self-employed as well as sole traders were abolished on 1 April 2021.
This is likely to result in a greater number of people searching for work, which will subsequently mean those people will be counted as unemployed.
DO WATCH: Why are corporations paying back Jobkeeper payments?
