Wage subsidies expiry to bring job losses

·3-min read

Treasury secretary Steven Kennedy has declined to predict how many jobs will be lost when wage subsidies end in less than two months.

JobKeeper, which is supporting an estimated 1.3 million Australians' employment, will wind up at the end of March with workers and businesses anxious about the scheme's death.

Dr Kennedy told the Senate's coronavirus response committee the number of wage subsidy recipients who would join the dole queue was unclear.

"I don't expect it to be many hundreds of thousands by any stretch of the imagination," he told the hearing in Canberra on Thursday.

He expects the majority of employers accessing the scheme to keep workers on.

"I don't expect it to disturb the trajectory of the unemployment rate coming down and more employment being generated over the year," Dr Kennedy said.

But high levels of post-lockdown job growth aren't expected to continue.

Containing coronavirus outbreaks will be crucial to avoiding shutdowns that could throw any predictions off course.

Dr Kennedy said the government was weighing up support for aviation and other sectors that will continue to come under severe pressure.

Treasury believes the scheme's impact on economic growth will linger for two to three years because of its size and the way it boosted balance sheets.

Dr Kennedy agreed New Zealand's wage subsidy ending and that country's unemployment falling to 4.9 per cent gave him hope the sky wouldn't fall in when JobKeeper is withdrawn.

The government is also weighing up a permanent increase to the JobSeeker unemployment benefit, which has been lifted above $40 a day during the pandemic.

Anglicare and UnitingCare on Wednesday released research that showed cutting it back to the old rates will put people back into poverty.

The coronavirus supplement of $150 a fortnight is being paid until March 31.

Prime Minister Scott Morrison is remaining tight-lipped about JobSeeker's future.

"These are matters we're still considering. When we're in a position to make a statement on those, then we will," he told reporters in Melbourne.

New figures show more than 553,000 unemployed Australians have moved back into work in five months.

More than twice as many people are exiting the government's Jobactive employment services program as there are entering it.

Jobs in labouring, cleaning, sales, hospitality and factories topped the list of work placements.

"This is the face of the post-COVID workforce," Employment Minister Michaelia Cash told AAP.

"From the sharpest decline to the fastest recovery, we are seeing individuals and businesses responding to our economic recovery plan and the support mechanisms we have put in place."

Meanwhile, there are now 10 people linked to Victoria's Holiday Inn hotel quarantine outbreak, prompting some states to tighten their borders to travellers from Greater Melbourne.

Mr Morrison, who visited Melbourne's outer southeast on Thursday to spruik the HomeBuilder plan, said he was not worried about the outbreak.

"I wouldn't be here if I wasn't confident," he told reporters.

Chief Medical Officer Paul Kelly said he was confident it had been a single event and the hazard - a nebuliser device - had been removed.