Australia’s economic recovery from COVID-19 could be faster than expected after new figures revealed the number of JobKeeper recipients had halved in just a month.
Government figures released on Sunday showed the number of Australians on JobKeeper had dropped from 3.6 million in September to 1.5 million in October.
The government tightened eligibility for the program in September, with the data showing 450,000 businesses had also come off the scheme in the following month.
The effective unemployment also dropped from 9.3 per cent to 7.4 per cent between September and October.
Treasurer Josh Frydenberg conceded not all businesses would see the other side of the pandemic, but the numbers showed Australia’s economic recovery was gaining momentum.
“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,” he told Today.
“This builds on earlier positive data that we have seen … We know it’s going to still be a pretty tough time for many Australians as we recover from the big hit of COVID. But certainly these numbers are encouraging.”
The 2020-21 budget had assumed 2.2 million Australians would receive JobKeeper supplements in the December quarter, but that figure has been revised down by around 700,000.
The payment was reduced from $1500 to $1200 per fortnight in September. It is scheduled to drop to $1000 in January before ceasing in March.
Mr Frydenberg claimed several measures included in the delayed October budget, including tax cuts and instant asset write-offs, had prompted investment.
But Labor Treasury spokesman Jim Chalmers downplayed the government’s role, saying serious economic dips were usually followed by steep recoveries.
“Josh Frydenberg will pretend that it is his genius that has seen that happen. But most economists know that from such an extraordinarily low base, of course there‘s going to be a substantial recovery,” he said.
“It’s good to see the numbers down, but it’s not surprising given in the last few months we have seen some substantial easing of restrictions around Australia, and there’s also tighter eligibility criteria for the payment.
“For the 1.5 million Australians who are still on the JobKeeper payment, the Morrison Government’s cuts will sting at the worst possible time.”
Victoria’s employment rate has bounced back, rising to just 1 per cent under pre-lockdown levels.
Australian Industry Group chief executive Innes Willox said the national numbers were encouraging but warned against cutting businesses off from support too early.
“We should not think that we are out of trouble yet…The recovery clearly still has a long way to go and fiscal policy will remain critical to maintaining momentum,” he said.
“Both the Prime Minister and the Treasurer have indicated their willingness to consider further fiscal stimulus if the recovery begins to falter.
“Our fear is that many businesses who are struggling to maintain employment levels early in the new year will find themselves prematurely cut-off from JobKeeper and that this will dampen the recovery.”