(Australian Associated Press)
More than 700,000 Australians are expected to lose their jobs before the middle of this year because of the coronavirus pandemic.
The federal treasury expects the unemployment rate to hit 10 per cent in the June quarter, leaving 1.4 million people out of work.
Before the coronavirus led to major economic shutdowns and mass standdowns of workers, the jobless rate was 5.1 per cent.
Treasury estimates the rate could have tripled to 15 per cent were it not for the government’s $130 billion wage subsidy scheme.
More than 800,000 Australian businesses have registered for the JobKeeper program that passed parliament last week.
Treasurer Josh Frydenberg says the expected unemployment rise is very concerning.
“But it’s also a reflection of the economic challenges that we face,” he told reporters in Canberra on Tuesday.
Mr Frydenberg says the debt for the $130 billion package will be felt for years to come, but that the government isn’t considering a rise to the GST.
Prime Minister Scott Morrison described the projected figures as a tragedy.
“Unemployment at that rate – hundreds of thousands of people losing their jobs – it is just absolutely heartbreaking,” he told Nine.
“The JobKeeper program means we’ll be able to limit that devastation.
“We’ve also got the doubling of the JobSeeker program, which means that those who do find themselves unemployed will be able to gain access to support that we’ve never seen in this country before.”
Money under the JobKeeper program will begin flowing to eligible businesses in early May, who will then pass the $1500 fortnightly payments onto their employees.
The subsidies will be backdated to March 30.
The JobSeeker payment, previously known as Newstart, has been boosted to $1100 a fortnight during the pandemic.
Australia continues to hold its prized AAA-credit rating, one of only 10 countries to do so.
Shadow treasurer Jim Chalmers said expectations for double-digit unemployment were a sobering reminder of the devastating economic impacts of a diabolical health crisis.
Labor wants the JobKeeper program extended to more casual workers, council staff and temporary visa holders.
“When unemployment spikes in the next few months, remember hundreds of thousands of job losses could have been prevented if the treasurer picked up his pen and included more workers currently left out and left behind,” Dr Chalmers said.
Australians will get the first taste of what the pandemic has meant for unemployment when March labour force figures are released on Thursday.
Economists are forecasting an unemployment rate of 5.4 per cent for March, compared with 5.1 per cent in February.
Some predictions range as high as 5.9 per cent, a level not seen since early 2016.
The Australian Banking Association says that as of April 9 there were 409,305 inquiries for loan deferrals, relating to both business and mortgage.