Australia’s effective unemployment rate, which includes people working zero hours or who are no longer trying to find a job, will rocket past 13 per cent, Prime Minister Scott Morrison said this morning.
The figure comes as Australia’s Treasury and central bank revise unemployment forecasts on an almost-weekly basis as the cases of coronavirus in Victoria continue to climb, paralysing the state’s economy.
The effective unemployment rate includes people who have lost their jobs but also those whose employment hours have been reduced down to zero.
Two weeks ago, Treasurer Josh Frydenberg said the unemployment rate was expected to peak at 9.25 per cent. While the current jobless rate is 7.4 per cent, the effective unemployment is closer to 11.3 per cent, he added.
And just two days ago, Reserve Bank governor Philip Lowe revealed in his monthly statement that the unemployment rate would rise to “around 10 per cent later in 2020”.
Now, Victoria’s lockdowns will see a further quarter of a million to 400,000 people fall into effective unemployment.
“It is estimated that we would see this effective rate of unemployment, which had fallen in the most recent numbers down to just over 11 per cent, head north again, back to where it had come down from which is in the high 13s,” Morrison said.
“So, that is very concerning. That is very troubling but it is not unexpected.”
Morrison also revealed that the combined impact of Stage Three and Four lockdowns in Victoria would see a hit of $10-12 billion in the September quarter and shave off around 2.5 per cent from quarterly real GDP growth.
The restrictions introduced in August and September alone are estimated to reduce the economy by $7-9 billion.
“This is a heavy blow, a heavy blow,” he said.
“80 per cent of this economic cost is expected to be in the affected areas of Victoria, of around $6 billion to $7 billion in that state.”
Victoria’s strict measures will also have knock-on effects to supply chains outside the state.
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