Invest
Real unemployment ‘reality’ almost 10%
Treasury has revealed to the Senate committee on COVID-19 that April’s unemployment figures could be much higher than indicated due to the large number of people unavailable for work because of lockdown restrictions.
Real unemployment ‘reality’ almost 10%
Treasury has revealed to the Senate committee on COVID-19 that April’s unemployment figures could be much higher than indicated due to the large number of people unavailable for work because of lockdown restrictions.
Addressing the committee on Thursday, Treasury secretary Steven Kennedy said the 6.2 per cent unemployment figure recorded by the ABS in April was in reality closer to 10 per cent, with almost 500,000 people having left the workforce because social distancing restrictions meant they were unable to seek work.
“The April labour force survey... showed there was around 489,000 people that left the labour force, plus the unemployed, we get an unemployment rate of 9.6 per cent,” Dr Kennedy said.
“That is roughly equivalent to the 10 per cent unemployment rate we expected to see.”
Dr Kennedy said the number of people who left the workforce was larger than Treasury anticipated, which was put down to the fact that individuals needed to be “available for work” to qualify as unemployed.
“I anticipate those people will go back into the labour force and be unemployed, partly because you have to be available to work in the reference week, and in the economy in that week, there were a lot of restrictions,” he said.
“It was a disturbing outcome, but one we expected – there have been conversations about whether some of those people have gone onto Jobseeker at a time when mutual obligations are not in place, but a lot of it was that people weren’t available for work in a period where you’ve been advised to stay home.”
Dr Kennedy said that as a result, it was likely the unemployment rate would continue to deteriorate significantly in May and June as lockdown restrictions ease and more people became technically available for work.
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