So says The New Daily:
The Coalition says the economic recovery from COVID-19 is already underway and strong enough to withstand cuts to income support.
But the latest data suggests the gamble might not pay off.
“What we’re seeing in the figures is primarily JobKeeper-related. It’s people who were considered employed under JobKeeper but now JobKeeper has [been reduced] they’ve effectively lost their jobs,” said Angela Jackson, lead economist at Equity Economics.
Ms Jackson said the jobs market recovery ran out of steam months ago and “a lot of effort” was required to create new jobs.
And EY chief economist Jo Masters shared her concerns.
“Looking forward, the loss of job momentum raises concern that the cyclical downturn is still to come,” she wrote in a note.
“The Federal Budget asked Australians to ‘Spend for your Country’. There is a question mark over whether households will do that in the face of a weaker labour market.”
Commonwealth Bank associate economist Nicholas Guesnon said the results were “disappointing” and coincided with a rise in the number of people receiving the unemployment benefit JobSeeker.
The charts are not encouraging. Jobs and wages have rolled over:
Ledb y Victoria but it is national:
Both sexes:
And most troubling and supportive of the JobKeeper theory, small business payrolls have cratered:
It’s too early to say for certain but the timing is scary with reference to the Depresionberg Unstimulus shock as JobKeeper heads into the fiscal cliff:
Certainly, this is exactly what we expect with some offset from the Victorian reopening as the Depressionberg Unstimulus:
- guts demand just as the mass immigration cliff hits it too and households retain their conservative savings culture for some time after the COVID-19 shock;
- provides no demand offset spending as JobSeeker is also gutted and public investment remains weak;
- incentivises business to invest in automation and lower headcount;
- incentivises business to sack older and full-time staff to put them on the taxpayer subsidised JobRorter program.
Most pointedly, the Depressionberg Untimulus provided next to no demand incentives for small business which is inherently disadvantaged during the pandemic on high streets, in people-to-people services and via the internet distribution channel.
Every businessperson I speak to says the same thing. JobKeeper allowed them to cull staff without firing them and get more profitable. But, this process exposed enormous fat their processes and production, and the removal of JobKeeper is the chance to shred headcount.
Eventually, this productivity process will boost profitability. But in the near term it will also hammer demand and sink investment, meaning incentives for the latter are pointless.
The budget should have focused on demand.
