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150,000 jobs to go: Industries at risk from JobKeeper end

·5-min read
JobKeeper is ending. Here are some of the sectors most at risk. Image: Getty
JobKeeper is ending. Here are some of the sectors most at risk. Image: Getty

The JobKeeper wage subsidy is due to end on Sunday and as many as 150,000 Australians could lose their jobs in the following weeks, according to Treasury Secretary Dr Steven Kennedy.

Speaking before a Senate Estimates hearing on Wednesday, Kennedy said anywhere between 100,000 and 150,000 Australians currently on the JobKeeper payment could lose their jobs at the end of the subsidy.

He said there was a “wide band of uncertainty” around that figure, but that the subsidy needed to end to avoid distorting the labour market and it had “done its work”.

"In our view it is appropriate for the program to end as other support measures take effect and to allow the economy to continue adjusting,” Kennedy said.

“We are by no means pleased that there are businesses in difficult circumstances.”

It comes just days after the unemployment rate dropped to a surprise 5.8 per cent as 89,000 Australians returned to work in February.

However, challenges remain for some industries.

JobKeeper ending: In numbers

Crosswalk, people crossing in downtown
Image: Getty.

The administrative and support service worker sector has been one of the slowest to recover from the COVID downturn, with only 58.8 per cent of workers in that sector leaving JobKeeper as of the end of January.

Some 84,416 were still receiving the subsidy at the end of January, according to figures due to be released by Treasurer Josh Frydenberg’s office on Wednesday.

Accommodation and food services has also only seen a 68.5 per cent drop in the number of people on JobKeeper, with 100,414 still receiving the subsidies.

The professional, scientific and technical services sector has 144,617 workers on JobKeeper and 146,729 workers in the construction sector are also receiving the pay subsidy.

In retail, 55,428 workers receive the payments, although this reflects just 4.4 per cent of total workers.

And in the arts and recreation industry, one in five still receive the payments.

Since the scheme was introduced in April 2020, 2.7 million workers have left the scheme, along with 680,000 employers.

State by state, Victoria has the most workers still reliant on the payment, with 389,000 still receiving it in January.

That’s a fall of 65 per cent since April last year.

In NSW, 330,000 receive the payment and in Queensland 169,000 are on the subsidy.

In South Australia, 51,600 receive the payment and in Western Australia 66,000 do.

In Tasmania 14,400 workers are on JobKeeper and in the Northern Territory there were 4,000 people on the payment as of January.

And in the nation’s capital, 10,100 workers received the payment as of January.

‘Shoulder charge’ to employment

"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," Treasurer Josh Frydenberg said.

However, The Australia Institute warned the removal of the payment will act as a “shoulder charge” to employment.

“There is no doubt that a big boost in Government spending last year helped prop up the economy and keep unemployment down, and Treasury’s advice today makes clear that big cuts in Government spending will drive economic growth down and unemployment up,” Dr Richard Denniss, chief economist at the Australia Institute said.

“For a Government that says it’s all about ‘jobs, jobs, jobs’ it is inconceivable they would pursue such a policy.”

According to the December mid-year economic and financial outlook report, JobKeeper is expected to cost a total $90.1 billion.

“While JobKeeper has been a lifeline for many businesses, it is necessary to remove it this month given its high cost. The federal budget deficit is expected to reach $197.7 billion this year, equivalent to 9.9 per cent of GDP,” IBISWorld senior industry analyst Matthew Barry said.

“The number of business failures in the first half of 2020-21 was down by 54.8 per cent relative to the prior year, showing how many businesses have been propped up by the government’s COVID-19 support policies.”

Replacement packages

The Government has announced a $1.2 billion package for Australia’s aviation industry, providing $500 wage subsidies for 7,000 international Qantas workers, with the proviso that those workers will be ready to step back up when borders do eventually reopen.

Virgin will receive similar support, although it’s planning to funnel that into training for staff.

Additionally, the Government will subsidise 800,000 half-price flights to regional Australia in an attempt to boost the tourism sector.

Finance Minister Simon Birmingham has also indicated a package for the entertainment sector is on the way.

“I know minister [for communications and the arts Paul] Fletcher is looking at particular issues across the entertainment sector and looking at matters as they relate to independent cinemas. I’m confident he is close in terms of settling any adjustments to the types of support into those sectors,” Birmingham said on Wednesday.

With AAP.

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