More than 2 million Australians no longer require the JobKeeper wage subsidy but the road to recovery is still bumpy, Treasurer Josh Frydenberg has said.
The number of Australians receiving JobKeeper has fallen from 3.6 million to 1.5 million in less than two months, however those remaining on the payments scheme face a serious cut to their income within months.
The JobKeeper supplement fell from $1,500 a fortnight to $1,200 in September and will fall to $1,000 from January before ending in March altogether.
"There will be some businesses that don't make it and some jobs that cannot be saved. But it's our analysis the unemployment rate will come down next year and the year ahead even after JobKeeper comes off at the end of March," Frydenberg said.
“While there is still a long road ahead, these are promising signs that our economic recovery is well under way."
However Opposition Treasurer Jim Chalmers said that while the scheme was successful, the Government didn’t get “everything right”.
“We called for wage subsidies and we were pleased when the Government had a change of heart and brought them in but that doesn’t mean that they’ve been perfectly implemented. Too many people were excluded,” Chalmers said.
“Too many people in the unemployment queues were deliberately excluded from JobKeeper by the Government. What that has meant is that unemployment queues were longer than they need to be and we’ll have a problem with unemployment and underemployment longer than we would like to.”
Chalmers said that even as the economy recovers, those Australians receiving a reduced JobKeeper payment will still suffer.
1.5 million on JobKeeper as unemployment payments are cut
It comes as the Government meets to discuss the unemployment payment, JobSeeker. The Government plans to extend the payment but reduce its value.
As it stands, JobSeeker is worth two-thirds of the pension and around 40 per cent of a full-time minimum wage.
The $550 fortnightly Coronavirus Supplement effectively doubled the JobSeeker payment, but that fell to $250 in September and will slide to $150 in January before expiring in March.
That means the JobSeeker rate will return to around $287.25 per week.
However, analysis by Deloitte Access Economics found that cutting and removing the Coronavirus Supplement will reduce the economy by $31.3 billion and see around 145,000 full-time jobs lost across 2020-21 and 2021-22.
A survey by The Conversation and the Economic Society of Australia interviewed 45 economists, and only four of them believed a return to the pre-Covid JobSeeker settings was the right move.
Emeritus Professor Margaret Nowak said the pre-Covid settings actually denied employment to Australians as they didn’t have the transport, shelter and food required to successfully find work.
Other economists noted that the decision to increase the payments during the pandemic didn’t lead to unfilled jobs as the incentive to find paid work remains strong.
Most experts also agreed that JobSeeker needs to be linked to wages, as the pension is, rather than to the consumer price index, to ensure those receiving it have the means to seek work.
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