Australia’s Unemployment Rate Rises to 6.2% in April
April was a devastating month for Australians as close to 600,000 jobs were lost in a tidal wave inflicted by COVID-19 domestic and global lockdowns. Unemployment statistics rose from 5.2 per cent in March to 6.2 per cent- which is significantly lower than the 8 per cent that was expected by economists and the highest it has been since April 2015. The Reserve Bank of Australia and the Australian Treasury is predicting that this statistic will rise to 10 per cent by June. The Treasury does forecast, however, that there may be up to 850,000 jobs reinstated by July if coronavirus related restrictions are eased.
The Australian Bureau of Statistics (ABS) reported that there had been 2.7 million Australians who have either had their hours reduced; lost their job, or left the labour force in April. Job seeking sentiment has also reduced with the people actively searching for jobs likely to decrease from 66 per cent to 65.3 per cent. Fortunately, the JobKeeper stimulus package has softened the blow of these statistics, which would’ve been much higher if it did not exist as it is currently supporting more than 6 million people. A reported 55 per cent of jobs that were lost have been to females, with their hours worked reducing 11.5 per cent, while males had fallen 7.5 per cent.
JobKeeper and JobSeeker payments are scheduled to end in September which is questionable as to whether this termination is too soon. Labour is already accusing the government of excluding too many people that are eligible for the stimulus payments. Thus, creating an even more bleak outlook and solidifying the fact that financial strain extends further than those receiving the stimulus payments.
Underemployment has also jumped from nearly 5 per cent to 13.7 per cent. Controversially, Australia is beginning to ease their restrictions to get the economy back up and running and Australian people back to work. Meanwhile, investment into businesses is likely to shrink by 8 per cent by June although it is believed that supportive government policies will be the way out of this.
Australia’s big four banks have lost more than $150 billion from the effects of the coronavirus. Commonwealth Bank, ANZ, NAB and Westpac are all painting a bleak outlook by establishing provisions for doubtful and bad debts from cashed-strapped Australians struggling with their loan repayments. The profits of these ‘Big Four’ banks have declined 45 per cent to a combined half-yearly profit of $6.8 billion as they prepare for a recession. Thus, ANZ and Westpac have resorted to the suspension of dividends to free up capital in an attempt to weather the storm.
By Caroline Wong
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