Coronavirus: Jobs axe falls as stimulus reined in

Jobs were lost in every state and territory late last month as the Morrison government pulled back on emergency support payments to business.

Scott Morrison in question time on Tuesday. Picture: Gary Ramage

Jobs were lost in every state and territory late last month as the Morrison government pulled back on emergency support payments to business, reigniting the political debate over whether stimulus is being withdrawn from the economy too quickly.

Labor seized on the worsening jobs data, warning it was the “consequence of a Morrison government that cuts support even as unemployment is rising”, leaving the nation hostage to a deeper recessio­n and longer jobless lines.

In the last two weeks of September, payroll jobs dropped across all jurisdictions despite COVID-19 restrictions being eased in all states and territories except Victoria. Australian Burea­u of Statistics data showed payroll jobs across the country remaine­d 4.1 per cent lower than mid-March, dominated by a 7.7 per cent slide in Victoria.

Josh Frydenberg said more than half of the payroll jobs lost between March 14 and April 18 had “now been regained” and 446,000 jobs had been created over the past four months as consume­r sentiment jumped by 11.9 per cent.

“Victoria remains, unfortun­ately and sadly, the weakest state with payroll jobs 7.7 per cent lower compared to March 14. This compares to 3.6 per cent in NSW,” the Treasurer said.

“Tragically in Victoria 73,000 jobs have been lost in the last two months — that’s nearly 1200 jobs lost per day. In comparison, 172,000 jobs have been created across the rest of the country, or more than 2800 jobs … a day.”

The drop in payroll jobs came as fortnightly JobKeeper payments reduced from $1500 to $1200 on September 28, with part-time workers receiving a lower rate of $750 ahead of a furthe­r scaling back of the program­ due in January.

The tax office’s payroll system had 440,000 fewer jobs registered on October 3 than it had in March, with only three of the 19 sectors tracked by the ABS — financ­ial services, public administration and health/social assistance — increasing their head­counts.

As the pandemic piles pressure on employment, ratings giant Standard & Poor’s reaffirmed on Tuesday the federal government’s AAA credit rating, making the nation one of only nine countries to hold that rating from the three major agencies.

S&P, which has rated Australia at AAA since 2003, warned that a downgrade could be issued within the next 24 months if key budget targets weren’t met. It also forecast that net debt of state and federal governments would rise from 16 per cent as a share of GDP to 42 per cent by 2023.

Opposition Treasury spokesman Jim Chalmers accused Mr Frydenberg of “pointing the finger­ at Victoria in a desperate attempt to distract from his own substantial failure on jobs”.

“These numbers show 440,000 jobs have been lost since the virus outbreak, and the government­ expects 160,000 more Australians will join the jobless queues by Christmas,” Dr Chalmers said.

Leading economist Saul Eslake­ said “on balance, it’s likely that the winding back of JobKeeper did play some role in the job decline”.

Goldman Sachs chief econo­mist Andrew Boak said the “step down in the JobKeeper wage subsidy may have contributed to the decline but we are mindful that the data tend to be revised up over time and exclude sole traders”.

Mr Frydenberg said the ­gov­ernment would continue with JobKeeper wage subsidies to the end of March and would try to legislate its JobMaker hiring credits program for young workers.

The payroll data follows a small monthly increase in the officia­l jobless rate to 6.9 per cent in September, which had pointed to a lower peak in the unemployment rate than the forecast 8 per cent in December. ABS head of labour statistics Bjorn Davis said “the fall in payroll jobs in late September was seen across all groups of people aged over 20, with an increase in jobs during this period limited to those under 20”.