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Economists at Australia’s largest bank are forecasting the loss of up to 110,000 jobs when JobKeeper expires at the end of the month.
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More than 100,000 jobs will be lost post-JobKeeper: CBA
10 March 2021
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A report released by the Commonwealth Bank of Australia on Tuesday predicts that 110,000 jobs will be lost when the JobKeeper wage subsidy ends on 28 March, with the travel, accommodation and transport industries expected to be hit hardest.
“Jobs in travel-sensitive sectors like transport, accommodation, and arts and recreation look to be most at risk,” CBA said in an economic note.
“However, given the strength of the leading indicators of the labour market, we expect that the overall impacts on the labour market will be short-lived and any negative impact on spending will be minimal.”
Businesses still leaning on JobKeeper, according to CBA economists, are considered “high risk”, with about 900,000 jobs still dependent on the wage subsidy and thought to be feeling extended impacts of the pandemic.
The report follows a similar forecast made in early February by the Treasury deputy secretary, Jenny Wilkinson, who told a parliamentary committee that she expected 100,000 jobs to be lost when JobKeeper expired at the end of March.
Among the highest-risk industries is the tourism sector, which has pleaded with the federal government for extended support once JobKeeper ends.
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“We see transport, arts and recreation, and accommodation and food services industries most at risk of job losses at the end of JobKeeper,” CBA said.
“These industries are sensitive to international travel and also suffer badly when restrictions and lockdowns are imposed.”
Treasurer Josh Frydenberg announced earlier this week that targeted support would soon become available to such industries, with an announcement expected in the coming days.
Despite the report, swathes of the broader business community remain optimistic about trading in the economy’s current state. NAB’s February business survey found that business confidence is at a 10-year high, up by 4 index points from January to 16 index points.
“Businesses are the most optimistic they’ve been since 2010,” said Alan Oster, group chief economist at NAB. “This says the economy’s recovery has very strong momentum, and even though government support is tapering, businesses are increasingly confident the economy will continue to improve.”
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