Figures reveal rise in Victorians collecting unemployment benefits

One statistic has highlighted the toll of Victoria’s lockdowns as experts say the official unemployment rate needs to be taken with a grain of salt.

The number of Victorians collecting unemployment benefits has ballooned by close to 50 per cent since the start of Covid, with around 82,000 more people now dependent on JobSeeker and Youth Allowance.

The rise in the number of Victorians surviving on unemployment benefits contrasts starkly with an official jobless rate which sits at a record low and raises questions over the strength of any future economic snapback.

There were 258,464 Victorians on JobSeeker and Youth Allowance in August, the latest numbers from the Department of Social Services show.

That is 81,853 more than the 176,611 Victorians who were collecting the welfare payments in February 2020 ahead of the nation entering its first lockdown. The number of Victorians dependent on the welfare payments for their survival is now 46 per cent higher than what it was before Covid struck.

The number of Victorians collecting unemployment benefits has ballooned by one-third since the start of Covid.

The rise in Victoria is also well above a national increase of 34 per cent.

Victorian Chamber of Commerce and Industry chief Paul Guerra said the longer business was affected by Covid ­restrictions, the harder the economic fallout would be.

“We must find a way for business to trade at 70 per cent double vaxxed and beyond ­before it’s too late,” he said.

“We would expect there is a bounce back in the economy as we have seen at the end of previous lockdowns, but we need to make sure that between now and then, businesses have ­sufficient support to survive so that they are ready to go when restrictions are eased.”

Victorian Chamber of Commerce and Industry chief Paul Guerra.

The jump in the number of people collecting JobSeeker and Youth Allowance comes despite the Australian Bureau of Statistics registering Victoria having an unemployment rate of 4.1 per cent in August.

Victoria was recorded as having 149,100 unemployed people in August, according to the ABS, almost 110,000 fewer than were receiving JobSeeker and Youth Allowance in the same month.

AMP Capital chief economist Shane Oliver said Covid had created distortions in the labour market, which meant the unemployment rate needed to be taken with a large grain of salt. These included people withdrawing from active job hunting, as well as a rise in people being classified as employed but working zero hours.

“The unemployment rate has become pretty useless as a guide to how the labour market is faring at present,” Dr Oliver said.