Australia’s unemployment is the worst it’s been since 1994, but the treasurer said the government’s $320 billion economic stimulus package provides hope that Australia will recover more quickly once on the other side of the crisis.
Those 5 additional percentage points translate to 700,000 more job losses.
“It’s a heartbreaking number. Unemployment at that rate, hundreds of thousands of people losing their jobs. It is just absolutely heartbreaking,” he said.
Worse Than 2008
The treasurer said the current downturn is far more significant than what happened in 2008. However, he is confident that the government is on the right track in boosting business resistance through the Jobkeeper program.“More than 800,000 businesses have already registered for the Jobkeeper payment which will allow the economy to recover more quickly once we are through to the other side of the crisis.
“Every arm of government and industry is working to keep Australians in jobs and businesses in business,” he said in the statement.
Forecasts
The $130 billion (US$83.2 billion) Jobkeeper package legislated on April 9 grants around 6 million Australian workers a $1500 per fortnight lifeline subsidy. The money is paid to employers to continue paying their employees for six months. It also brings the total economic support provided by the government and the Reserve Bank of Australia to a staggering $320 billion (US$205 billion)—more than 16 percent of GDP.Economists responded positively to the stimulus packages. Westpac chief economist Bill Evans updated his forecasts following the announcement of the program in a video update in early April.
He recognized the program as a “major game-changer for the Australian economy” and adjusted the unemployment rate for the June quarter from an initial 17 percent (amounting to a loss of 1.7 million jobs), down to 9 percent, before falling back to around 7 percent at the end of 2020.
As for economic growth prospects, Evans forecasted that June and September will see a GDP contraction by 8.5 percent and 0.6 percent respectively, before a 5.2 percent lift in the December quarter. Overall, the economy is expected to contract by 5 percent through 2020.
The official labour force figures for March are expected to be released on April 16.