Shutdown devastates Victoria’s state’s post-COVID jobs recovery

More jobs were lost in Victoria over the two weeks to early September, while growth in the employee workforce across the rest of the country stalled.

The number of payroll jobs in Victoria continued to decline over the two weeks to September 5. Picture: AFP

Victoria lost 10 times more jobs than the rest of the nation over the month to early September, as small businesses struggled to keep their staff through the second shutdown.

The data from the Australian Bureau of Statistics, which draws on weekly Taxation Office payroll numbers, revealed that the further deterioration over the fortnight left the number of payroll jobs in Victoria down by 2.1 per cent over the four weeks to September 5. This compared with a drop in 0.2 per cent for the rest of Australia, the ABS said.

EY chief economist Jo Masters said the decline in payrolls in recent weeks was led by labour shedding among small and medium-sized firms.

“Larger businesses seem to have adapted better to the crisis, with payrolls in firms of over 200 employees increasing across the country, including in Victoria,” Ms Masters said. This may reflect larger businesses’ “greater agility to respond to rapidly changing conditions,” she said.

National payroll jobs remain around 4.5 per cent lower than in mid-March, when Australia recorded its 100th coronavirus case, an estimated deficit of around 480,000 jobs versus pre-COVID.

In Victoria, which continues to suffer through a second round of even more intense restrictions, payroll jobs are down 8.3 per cent versus March – revealing that the state has failed to participate in any of the national recovery over the past six months. Outside Victoria, payroll jobs were down 3.1 per cent between March 14 and September 5.

Total wages paid through the ATO’s weekly payrolls data remained 4.3 per cent lower than in mid March.

Westpac senior economist Justin Smirk said that “nationally, what is worrying is that the recovery in the COVID-hit industries, outside of education, appears to have run out of steam”.

Other industries, which escaped the worst of the hit during the initial lockdowns in April and May, such as the construction and professional services sectors, are now shedding jobs, Mr Smirk said.

Economists and policymakers have been using the payrolls figures to provide a more timely insight into the impact of the pandemic on workers.

However, last week’s labour force statistics revealed a massive boost in employment among sole traders – who are not captured in the employee payroll numbers – sent the unemployment rate unexpectedly plunging to 6.8 per cent, from 7.5 per cent.

The upcoming October 6 budget will “need to improve business and consumer confidence if there is to be a sustained improvement in the pace of the payroll recovery,” Ms Masters said.

Opposition Treasury spokesman Jim Chalmers on Tuesday renewed Labor’s attack on the phasing out of the JobKeeper and Jobseeker supplement payments from the end of this month.

“When we’re in the teeth of the worst recession in almost a century, it makes absolutely no sense for the Morrison government to be withdrawing support from the economy without a jobs plan to replace it,” Mr Chalmers said.