JobKeeper figures reveal ‘promising signs’ of economic recovery

Two million Australians have stopped receiving JobKeeper payments after the government tightened ­eligibility rules.

‘The lower than forecast take-up of the JobKeeper payment extension in October is further evidence that Australia’s recovery from this once in a century pandemic is well under way’: Federal Treasurer Josh Frydenberg. Picture: NCA NewsWire / David Geraghty

More than two million Australians stopped receiving JobKeeper ­payments in October amid a ­resurgent economy and tighter ­eligibility rules.

T he second phase of the wage ­subsidy scheme reassessed firms’ profitability from September 27 and introduced a two-tiered ­payment for full-time and part-time ­workers, leading to a near halving in the number of businesses applying for the program.

Treasurer Josh Frydenberg said “the lower-than-forecast take-up of the JobKeeper payment extension in October is further evidence that Australia’s recovery from this once-in-a-century pandemic is well under way”.

Treasury figures revealed 450,000 fewer businesses and around two million fewer ­employees qualified for ­JobKeeper in October than in September, leaving 1.5 million workers still relying on it.

The data suggested the nation’s single largest intervention in the ­labour market will now cost less than assumed in the 2020-21 federal budget, with around 700,000 fewer employees and sole traders covered by the payment in October “due to their employer no longer meeting the required decline in turnover test”, the Treasurer said. The fate of the remaining 1.3 million workers no longer ­receiving the $1500 fortnightly payment from October remained unclear.

Almost $70bn was paid out to 3.6 million workers over the first six months of the emergency scheme after one million businesses signed up as the COVID-19 crisis forced firms to close and devastated ­entire industries.

Around 86 per cent of workers qualified for the full-time payment of $1200 a fortnight, with around 14 per cent on the lower, part-time payment of $750 a fortnight, preliminary data showed.

Bumper jobs growth in October — as revealed in official employment statistics — suggests improving conditions rather than failing or retrenching firms drove the massive fall in JobKeeper recipients.

Treasury’s “effective” unemployment rate — which accounted for workers without work but technically still employed thanks to JobKeeper — dropped from 9.4 per cent in September to 7.4 per cent in October, close to the 7 per cent official jobless rate, as 80 per cent of stood-down workers were back at work.

“While there is still a long road ahead, these are promising signs our economic recovery is well under way,” Mr Frydenberg said.

But there are signs the transition from emergency support may have triggered a lift in financial strain in some households. A recent Australian Bureau of Statistics survey showed one in 10 mortgage holders in October reported difficulty in meeting loan obligations in the previous four weeks, double the rate in June during the depths of the pandemic.

ABS payroll figures also showed large-scale labour shedding among small businesses through October, even as larger, more financially stable firms lifted hiring.

The first phase of the Morrison government’s pandemic response strategy focused on supporting the economy and promoting growth.

Mr Frydenberg has said strong fiscal support measures will remain until the unemployment rate is comfortably below 6 per cent.