Australian Treasury Sec says expects a spike in long term unemployment

Australian Treasury Secretary Kennedy giving testimony to parliament (committee)

He is sounding a cautionary note:

  • says there will be a spike in long term employment in coming months due to the jump in people who lost their jobs in March last year
  • youth employment is still 3.8% down on where it was pre-virus
  • economy has recovered 85% of the decline from COVID-induced recession
  • the end of JobKeeper will see some firms close, jobs lost
  •  scarring of jobs market now expected to be much lower than originally feared
  •  coronavirus recession looking much different to other shocks.
  • Treasury assesses that the NAIRU (non-accelerating inflation rate of unemployment) is between 4.5-5% (compared with the RBA’s around 4%)

JobKeeper is the government wage subsidy scheme that finishes at the end of March

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