Thursday , October 1 2020
Breaking News
Home / Federal Politics / ‘Zombie jobs’: OECD pushes back date of Australian recovery

‘Zombie jobs’: OECD pushes back date of Australian recovery

According to the OECD, local lockdowns had hurt several nations including Australia over recent months, which meant their economies faced a longer climb back to recovery.


“The localised lockdowns, border closures and new restrictions being imposed in some countries to tackle renewed virus outbreaks are likely to have contributed to the recent moderation of the recovery in some countries, such as Australia,” it said.

Among the world’s 20 largest economies, the OECD is expecting growth to fall by 4.5 per cent this year before rebounding by 5 per cent in 2021. Some countries such as South Africa, Britain, Argentina and Mexico are predicted to see contractions of more than 10 per cent in 2020.

Only one nation, China, is expected to grow this year, by 1.8 per cent, which the OECD said is due to it being the first country to go through the coronavirus pandemic.

The OECD urged governments to maintain spending, particularly on public infrastructure, through the next year and a half, saying that a premature reduction in fiscal support could hurt the global economy.

Healthcare, education, digital and environmental infrastructure should be given priority.

The OECD says governments will need to reduce support for businesses or risk a generation of people being trapped in "zombie" jobs.

The OECD says governments will need to reduce support for businesses or risk a generation of people being trapped in “zombie” jobs.Credit:Glen Hunt

The organisation also warned governments that had put in short-term support measures such as wage subsidies like Australia’s JobKeeper program or cheap loans to businesses that these needed to be wound up or risk propping up businesses that should close.

Governments had to embrace structural changes, including the collapse of some firms, if economies were to recover from the virus-induced recession – even if it meant some short-term pain.

“Failure to do so could hinder aggregate productivity and the economic recovery by trapping resources in non-productive ‘zombie’ firms and jobs, and reduce the prospects for job switching to more productive and higher-paid positions. Young people are particularly exposed to these risks,” it warned.


“A lasting shift to remote working and the increasing digital delivery of services, including e-commerce, could also change the mix of jobs available and the location of some workplaces. Adjusting to these changes is likely to require substantial labour and capital reallocation.”

Official job figures to be released on Thursday by the Australian Bureau of Statistics are expected to show the Victorian lockdown pushed up unemployment through August. The jobless rate in July was 7.5 per cent.

Figures compiled by SEEK show job ads nationally dropped by 2 per cent in August. Almost all the fall was because of Victoria where job ads dropped by 17.6 per cent.

They eased by 3.9 per cent in the ACT and by 1.2 per cent in Queensland, while they were up 1.7 per cent in NSW and by more than 7 per cent in Western Australia, South Australia, Tasmania and the Northern Territory.

Ads are up in annual terms in three jurisdictions − WA, SA and Tasmania − and in Victoria they are 56.1 per cent lower than in August last year. They are down by 30.6 per cent in NSW.

Nationally, ads are down by more than 29 per cent over the past 12 months.

SEEK Australia managing director Kendra Banks said the results were being heavily influenced by the Victorian lockdown.

“Excluding Victoria, the rest of Australia saw a 1.8 per cent increase in job ad volumes in August when compared to July,” she said.

Most Viewed in Politics


About admin

Check Also

‘Worst is yet to come’: Legal services desperate for money ahead of domestic violence wave

“Even in ‘normal’ times, there is often a delay between when violence occurs and when …