'There will be a shift to JobKeeker': Government's chilling admission that unemployment is set to soar when the subsidy given to 3 MILLION ends
- JobSeeker payments have been doubled from $550-a-fortnight to $1,100
- The payments will revert back to the usual $550 at the end of September
- The government warned unemployment will spike once JobSeeker ends
- The scheme, set up during the pandemic, was previously known as Newstart
- Industrial Relations minister said unemployment won't return back to normal
- Here’s how to help people impacted by Covid-19
Unemployment will skyrocket when JobSeeker and JobKeeper payments end in September, the Federal Government has warned.
Since the COVID-19 outbreak began, JobSeeker payments - previously known as Newstart - have been doubled from $550-a-fortnight to $1,100.
The government has signalled the payments will revert back to $550 at the end of September.
JobKeeper pays workers $1,500-a-fortnight so their employers can keep at work despite a substantial drop in business thanks to COVID-19 restrictions.
Industrial Relations Minister Christian Porter warned on Tuesday it would be wrong to think everything could shift back to a pre-pandemic state at the end of September when both subsidy schemes come to an end.
Unemployment will skyrocket when JobSeeker and JobKeeper payments end in September, the Federal Government has warned
Prime Minister Scott Morrison said there would be jobs and businesses lost once the government supports were removed
'Some of the jobs that are being supported through that wage subsidy are not going to be sustainable in the long run,' he said.
'There will be a shift between JobKeeper and JobSeeker at some point and to some degree.'
There are now 1.6 million people on the JobSeeker unemployment benefits, while another three million Australians receive JobKeeper payments through their employer.
The JobKeeper scheme is legislated until September but is being reviewed, with the outcome to be announced on July 23.
It has ended early for the child care sector, which the government has moved on to a separate support plan.
'The idea that things will return seamlessly to the way they were six months after JobKeeper commenced is just a false apprehension and we have to plan ourselves and work ourselves out of this, not just hope for the best,' Mr Porter said.
Industrial Relations Minister Christian Porter warned unemployment won't shift back to a pre-pandemic state at the end of September when both subsidy schemes come to an end
The minister cautioned that governments had limited resources and had to apply them for maximum effect.
His remarks come a day after Prime Minister Scott Morrison said there would be jobs and businesses lost once the government supports were removed.
Mr Morrison told the forum on Monday that keeping wage subsidies and other support measures in place for too long would damage the super-charged growth Australia needs to escape the crisis.
ACTU secretary Sally McManus said there were clearly big sections of the economy that would still be more or less in stasis when September arrived.
She warned workers wouldn't stand for permanent pay cuts as the Australian economy recovered from coronavirus.
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While industrial relations changes had been needed to deal with the crisis, it was important not to conflate that with what would be needed in the future as the system was reformed.
'If we let these discussions get coloured or affected by the current situation, we could then be building solutions that are really crisis solutions,' Ms McManus told the CEDA forum.
'The union movement clearly won't have a lot of patience if some employers come and say they want changes because of the current situation and for those to be permanent.'
But she said workplace laws could have a role to play in preventing a second wave of coronavirus infections, which would be 'unthinkable' for the economy.
Australia's unemployment rate has surged to a five-year high following the COVID-19 business closures, with many more people not counted in the official statistics.
The jobless rate soared from 5.2 per cent in March, before the coronavirus shutdowns of non-essential businesses, to 6.2 per cent in April.
The jobless rate soared from 5.2 per cent in March, before the coronavirus shutdowns of non-essential businesses, to 6.2 per cent in April
The government also warned extending JobKeeper could put spending on vital services, including schools and hospitals, at risk.
The $70 billion wage subsidy scheme is costing taxpayers $20 billion every month.
Mr Morrison insisted 'it is not a wise or responsible course' to keep the emergency measure in place, revealing the economy is expected to shrink by $100 billion this year.
Both the Reserve Bank of Australia and Treasury are expecting the official unemployment rate to hit double digits this month as the health pandemic caused an even faster downturn than the 1930s Great Depression.
The number of payroll jobs plunged by 7.5 per cent or about 980,000 in 11 weeks, the Australian Bureau of Statistics revealed on Tuesday.
The means the number of people with a job has fallen from 13million to 12million in little more than two months.
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