Nationally, 1.54 million workers remained on JobKeeper at the end of 2020, a massive drop from 3.6 million in September 2020 as workers at 520,000 companies no longer received the wage subsidy.
Grattan Institute household finances director Brendan Coates said measuring the decay rate of businesses on JobKeeper would most likely show the sectors that had been hardest hit.
“Most of the businesses that are on JobKeeper now are the ones that were on early [in the scheme] — that’s the sectors that have been hit hardest like accommodation, food services — so you’d expect it to be a lot of cafes, arts and recreation,” Mr Coates said. “They’re still struggling under the weight of social distancing rules and are not back to full capacity.”
Rolling back JobKeeper when unemployment is still above 6 per cent is likely to suspend the improvement in unemployment, slow down the pace of recovery and delay wages growth because it’s a lot of money coming out of the economy in a relatively short space of time, Mr Coates said.
“Unemployment will likely need to be below 5 per cent before we see wages growth, and the Reserve Bank doesn’t think that’s going to happen until at least 2024,” he said. “The government is considering a rise in the rate of JobSeeker and, the smaller the step-down, then the smaller those impacts will be.
“A question we have to grapple with is what will happen if we have a fourth wave [of coronavirus infection] because the vaccine won’t be rolled out to most people before this winter.”
The number of businesses claiming JobKeeper in Lakemba has not changed much since April. The number of businesses on the scheme remaining on it in November was above 80 per cent.
Hurstville, Campsie and Edmondson Park all have support going to about three-quarters of the number of businesses that were initially on the scheme.
Treasurer Josh Frydenberg said JobKeeper was always meant to be temporary and other support such as the JobMaker hiring credit, tax cuts, investment incentives and infrastructure spending will create jobs.
“The most recent public JobKeeper data shows a remarkable recovery (with) improvements across all states, territories, regions and sectors,” Mr Frydenberg said.
“At the same time, 813,000 jobs have been created since May and unemployment has fallen from 6.8 per cent in November 2020 to 6.4 per cent in January 2021.”
Labor and the trade unions have called for JobKeeper to be extended past March 28. This has been ruled out by Mr Frydenberg.
ACTU boss Sally McManus has said the scheme should continue until the pandemic is brought under control.
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Nigel Gladstone is an investigative journalist at The Sydney Morning Herald.