JobKeeper end facing 380,000 Victorians with Melbourne most at risk

The Morrison government’s signature $90 billion JobKeeper wage subsidy will end next week with more than 380,000 people across Victoria still using the program and Melbourne facing the biggest hit from its cessation.

Figures to be released by Treasurer Josh Frydenberg on Wednesday show a huge fall in the number of individuals and businesses requiring JobKeeper to survive as the economy has recovered from the coronavirus recession faster and stronger than expected.

Josh Frydenberg says new JobKeeper figures show the economy is recovering. They also reveal more than 1 million people face losing the wage subsidy when it ends next week.Credit: Alex Ellinghausen

But the same numbers highlight concerns within Treasury, the government and the Reserve Bank that the program’s end will hit the jobs market with more than one million Australians still on JobKeeper as it comes to an end.

JobKeeper was introduced in April last year, paying $1500 per fortnight per employee for businesses with a turnover of less than $1 billion that suffered an estimated 30 per cent drop in turnover.

Eligibility was tightened for the final three months of 2020 and then again for the January to March period this year, while there are now two payment rates of $1000 and $650 per fortnight depending on a workers’ hours.

Between April and September there were 3.8 million people on JobKeeper. This had dropped to 1.7 million between October and December, before dropping down to less than 1.1 million by January.

Across Victoria, there are now 388,986 people on JobKeeper compared to 1.1 million between April and September, the largest number of any state or territory. There’s been a 65.3 per cent drop in the number of people in the state on JobKeeper since September and January.

Some parts of the state have out-performed the rest of Victoria. In Shepparton there has been a 79.7 per cent drop in the number of people on JobKeeper while in the state’s north-west there has been a 76.3 per cent fall.

Bendigo (down 74.6 per cent), Geelong (down 72.6 per cent) and Ballarat (down 70.7 per cent) have all recorded sizeable falls.

But Melbourne continues to struggle, accounting for about 300,000 of the state’s residents still on JobKeeper.

Western Australia (81.4 per cent drop off) and the Northern Territory (81.6 per cent) are the best-performed jurisdictions. NSW’s recovery is better advanced than Victoria with a 72.7 per cent drop off.

Mr Frydenberg said more than 680,000 businesses and 2.7 million workers had graduated from JobKeeper since it was put in place. The drop in workers needing the program through January showed the economy was improving.

“The final number for the month of January confirm JobKeeper numbers confirm that Australia’s economic recovery is broad-based across all states, regions and industries,” he said.

“We know that some families and businesses are still doing it tough and our message is that the Morrison government continues to have your back.”

The largest improvements by industry have been in healthcare, retail trade and wholesale trade.

The number of people in healthcare on JobKeeper has fallen by 87.4 per cent. There were 47,117 people being supported by JobKeeper at the end of January compared to 373,506 in September last year.

More than 82 per cent of people in retail and wholesale trade have come off JobKeeper over the same period. There has also been a strong improvement in the manufacturing and financial services sectors.

But some sectors continue to struggle.

Just 58.5 per cent of administrative and support service workers have left JobKeeper with 84,416 still on the wage subsidy at the end of January. In accommodation and food services there has been a 68.5 per cent drop since September, leaving 100,414 on the program.

Another 144,617 people in the professional, scientific and technical services sector were on JobKeeper at the end of January with 146,729 construction workers also surviving on the subsidy.

More than one in five arts and recreation services workers are still on JobKeeper compared to less than one per cent of people in public administration and safety.