Speaking to ABC News on Sunday, Treasurer Josh Frydenberg said the government has a historic opportunity to force a labour market rebound in record time, despite concerns over the lasting impacts of JobKeeper’s expiry in March.
Mr Frydenberg said more than 100,000 Australians have come off income support despite the wage subsidy’s withdrawal in March, symbolising the labour market’s resilience compared to slower recoveries in the wake of other notable recessions in recent decades.
“If you compare the labour market’s response to this recession, compared to the ’80s and ’90s recession, unemployment has come back a lot faster,” Mr Frydenberg said. “We think we’ll get to pre-pandemic levels in around two years, compared to 10 years for the 1990s recession.”
The unemployment rate, which reached a pandemic high in July last year, fell 2 percentage points to 5.6 per cent in March, as 71,000 jobs were added to the economy.
The overall employment rate has rebounded to pre-pandemic levels across the board, as total employment climbed to 13,077,600 in March and unemployment decreased by 27,000 people.
Mr Frydenberg on Sunday took the opportunity to laud the results of the government’s JobTrainer program — a scheme designed to subsidise upskilling across various in-demand industries and trades, like aged care and IT, for up to 300,000 — which has so far seen uptake of more than 100,000.
He also pointed to the success of the government’s apprenticeship scheme, which offers a $7,000 quarterly subsidy to Australian employers who hire and train apprentices. The scheme currently supports about 100,000 apprentices nationwide.
“We did that in five months,” Mr Frydenberg said. “And we topped up that apprentice wage subsidy scheme. So we’ve had a lot of programs that have been designed to support the labour market — JobKeeper, obviously being the most significant — keeping that formal connection between employers and employees.
“The net outcome is the one we’re focused on, which is the unemployment rate. It’s come down substantially. And again, Australia has outperformed the rest of the world when our employment levels are now back above where they were pre-pandemic.”
The RBA on Friday released its quarterly monetary policy update which suggested employment growth is expected to see continued growth over the next few months, even in the wake of JobKeeper’s end, which many expected to destabalise Australia’s COVID recovery.
The central bank expects the impacts of JobKeeper’s expiry will have only a “muted effect” on Australian employment figures through 2021.
“Employment growth is expected to remain strong over the next few months given solid momentum in activity and buoyant forward indicators of labour demand... suggesting a muted effect from the end of the JobKeeper program,” the RBA said.
The RBA’s latest update shows a revised unemployment forecast, down from its February estimate of 6.5 per cent to 5.25 per cent, further suggesting that Australia could reach full employment by the end of 2022.
Beyond employment, Mr Frydenberg also signalled the government’s commitment to the aged care sector, the recent subject of a royal commission whose recommendations will offer a centrepiece to Mr Frydenberg’s forward estimates.
“More than $10 billion, over the forward estimates, will be in this budget in terms of aged care spending,” he said.
“We’ve had a royal commission, which has indicated that the sector is in dire need of reform and additional funding. And we’ll be responding to that royal commission report in this budget.
“Obviously, we have an ageing population. And it’s not just about spending more money, it’s also about ensuring that their money is well spent. And our focus is on governance, workforce issues and the quality of aged care services.”
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John Buckley is a journalist at Accountants Daily.
Before joining the team in 2021, John worked at The Sydney Morning Herald. His reporting has featured in a range of outlets including The Washington Post, The Age, and The Saturday Paper.