Invest
JobKeeper tapering a risk to jobs
The RBA has outlined how a tapering of government support, including JobKeeper, could impact Australia’s recovery from the COVID-19 pandemic.
JobKeeper tapering a risk to jobs
The RBA has outlined how a tapering of government support, including JobKeeper, could impact Australia’s recovery from the COVID-19 pandemic.
In its quarterly statement, the central bank highlighted a growing concern about high and rising unemployment in the face of fading government support.
“There is a risk that business insolvencies will rise by more than expected as government support programs are tapered, slowing the recovery in activity, reducing investment and placing upward pressure on the unemployment rate,” the RBA’s report stated.
“By the same token, the unprecedented government interventions to support businesses and enable them to build cash buffers could cushion firms as support is unwound and provide the basis for a faster recovery than currently forecast.”
The RBA’s comments follow the Treasury’s comments at the Australian Business Economist webinar on Thursday, 5 November, when Treasury secretary Steven Kennedy said the movement may have to launch another series of interventions in the economy to help with unemployment post-COVID.
“Given the lack of monetary support available, the states and territories can also play an important role in supporting the economic recovery, especially in the areas where they have primary responsibility and are better placed to design and implement policy, including social and other infrastructure,” Dr Kennedy said.
Shadow treasurer Jim Chalmers said the decisions to cut JobKeeper and exclude many Australians from the new hiring credit scheme will mean that the recession will be deeper than necessary and the unemployment queues longer than they need to be.
“Australians need and deserve a comprehensive economic plan for the recovery to prevent a trillion dollars of debt and higher unemployment for longer being the only lasting legacies of this recession,” Mr Chalmers said.
He pointed out that much of the heavy lifting is being left to the central bank.
“The RBA has been forced to enact extreme measures to support the economy because the Morrison government is failing to prevent the jobs crisis from getting worse.
“It makes no sense for Scott Morrison to be pulling support out of the economy when unemployment is expected to be too high for too long.”
Treasurer Josh Frydenberg used a doorstop interview in Melbourne to point out the jobs recovery despite the tapering of JobKeeper.
“We’ve also seen job ads up this month by more than 9 per cent, and we’ve also seen loan approvals up by 5.9 per cent with particularly strong numbers for new loan approvals for new home construction off the back of the HomeBuilder program and other government incentives,” Mr Frydenberg told the media.
He also noted that the RBA’s slashing of the official cash rate was in line with the government’s support of the Australian economy.
“The decision by the Reserve Bank of Australia today to cut the cash rate down to 10 basis points and to target the three-year bond yield at 10 basis points complements the economic support that the Morrison government has provided the Australian economy.”
“The Reserve Bank made it very clear in their statement today that their moves today complement what the Morrison government announced in this year’s budget, particularly supporting job creation and our economic recovery,” Mr Frydenberg concluded.
About the author
About the author
Economy
Consumer confidence is quickly pushing Australia’s economy from recovery to expansion
Both Australian consumers and property investors came out of last month feeling pretty chuffed about the economy. ...Read more
Economy
4 Aussie cities among 10 most liveable in the world
This year’s global liveability score has been strongly influenced by measures taken to stem the spread of COVID-19, with cities ranked according to how successfully they dealt with the pandemic. Per...Read more
Economy
Australia attended the G7 as a ‘green laggard’, new report shows
Following a weekend at the G7, Australia has been labelled a “green laggard” as a consequence of letting its green competitiveness significantly slide over the past two decades. ...Read more
Economy
Melbourne’s lockdown ends tomorrow
As announced, Melbourne will begin its path out of lockdown as of 11.59pm Thursday evening, but some restrictions will remain. ...Read more
Economy
GDP slows to 60-year low
Australia’s gross domestic product per capita growth has fallen to its slowest pace in at least 60 years, with the massive government spending looking to come at a ‘great cost to future generation...Read more
Economy
Recovery falters just a month after JobKeeper ends
The end of JobKeeper has seen a rise in defaults and administrations, which could hamper Australia’s recovery from the COVID-19 downturn, new research has revealed. ...Read more
Economy
Frydenberg considers JobKeeper return for Victorians
The federal government has granted Victoria Premier James Merlino a chance to pitch his ‘JobKeeper style’ aid, but it has refused to acknowledge that Victoria’s predicament could be linked to fe...Read more
Economy
Australia’s economy is officially back to pre-pandemic levels
As most economists predicted, Australia’s economy is back to pre-pandemic levels, the latest official figures show. ...Read more
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Dissecting the budget and what it means for your equities, property and super
Listen now
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Economy
Consumer confidence is quickly pushing Australia’s economy from recovery to expansion
Both Australian consumers and property investors came out of last month feeling pretty chuffed about the economy. ...Read more
Economy
4 Aussie cities among 10 most liveable in the world
This year’s global liveability score has been strongly influenced by measures taken to stem the spread of COVID-19, with cities ranked according to how successfully they dealt with the pandemic. Per...Read more
Economy
Australia attended the G7 as a ‘green laggard’, new report shows
Following a weekend at the G7, Australia has been labelled a “green laggard” as a consequence of letting its green competitiveness significantly slide over the past two decades. ...Read more
Economy
Melbourne’s lockdown ends tomorrow
As announced, Melbourne will begin its path out of lockdown as of 11.59pm Thursday evening, but some restrictions will remain. ...Read more
Economy
GDP slows to 60-year low
Australia’s gross domestic product per capita growth has fallen to its slowest pace in at least 60 years, with the massive government spending looking to come at a ‘great cost to future generation...Read more
Economy
Recovery falters just a month after JobKeeper ends
The end of JobKeeper has seen a rise in defaults and administrations, which could hamper Australia’s recovery from the COVID-19 downturn, new research has revealed. ...Read more
Economy
Frydenberg considers JobKeeper return for Victorians
The federal government has granted Victoria Premier James Merlino a chance to pitch his ‘JobKeeper style’ aid, but it has refused to acknowledge that Victoria’s predicament could be linked to fe...Read more
Economy
Australia’s economy is officially back to pre-pandemic levels
As most economists predicted, Australia’s economy is back to pre-pandemic levels, the latest official figures show. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
