Unemployment to reach highest levels in almost three decades, says Treasury
The Treasury has revealed it expects unemployment to jump up from 5.1% to 10% in the June quarter - the highest Australia has seen since 1994 - as the economy teeters on the brink of a recession.
In February, 700,000 Australians were looking for a job. An unemployment rate of 10% would see that number swell to 1.4 million.
Were it not for the Government’s JobKeeper program - a $130 billion subsidy to help employers keep workers on the payroll - the Treasury estimates that unemployment would reach 15%.
The impact of the COVID-19 outbreak has been keenly felt by Australia’s commercial sector, with all but the most essential businesses forced to close their doors to contain its spread.
It’s put the Federal Government in a state of crisis management. The launch of the JobKeeper scheme on March 30 brought its stimulus efforts up to $320 billion, or 16.4% of the country’s GDP.
Businesses with an annual turnover of less than $1 billion will be able to apply for the subsidy, so long as they can show they have experienced a drop in revenue of at least 30% due to the COVID-19 outbreak.
While the payments aren’t due to commence until May 1, they will be backdated to March 30. So far, more than 800,000 businesses have registered.
According to Treasurer Josh Frydenberg, the support measures the Government has introduced are a necessary and proportionate response to the challenges the country is currently experiencing.
“The economic shock facing the global economy from the coronavirus is far more significant than what was seen during the global financial crisis over a decade ago,” he said in a statement today.
“Every arm of government and industry is working to keep Australians in jobs and businesses in business, and to build a bridge to recovery on the other side.”
What to do if you’re facing financial hardship
The stop in commercial activity due to the COVID-19 outbreak has led to widespread job insecurity. If you're struggling to cope financially, here are a few things you can do that might help.
Find out if you’re eligible for government support
The government has introduced a number of support measures to help individuals weather the current downturn. These include:
- A $550 Coronavirus supplement, which will be paid out to eligible income support recipients every fortnight for six months (starting April 27).
- Two separate $750 economic support payments, which will be available to eligible income support recipients and concession card holders (starting March 31).
Pause your mortgage repayments
The big four, along with several minor banks, are giving customers the option to temporarily pause mortgage repayments. If you’re under financial stress, this is well worth considering. Just keep in mind that interest will continue to accrue over the deferral period.
Speak to your energy provider
Energy retailers are also stepping up to assist households, with many extending support to customers in the form of payment extensions, tailored payment plans, and late fee waivers.
For more information on the assistance available to individuals, households and businesses, along with other tips to keep your finances in good health amid the current crisis, visit our guide to coronavirus and your finances.