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JobKeeper wind-up could cost up to 250k jobs, analysis finds

Ending the JobKeeper scheme could cost the Australian economy up to 250,000 jobs, according to a new economic analysis.

JobKeeper wind-up could cost up to 250k jobs, analysis finds
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  • Adrian Flores
  • March 05, 2021
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There will likely be a decrease in employment of between 125,000 and 250,000 persons, or about 1 to 2 per cent of employment, according to an economic analysis from Professor Jeff Borland at the University of Melbourne.

Despite his estimate, Professor Borland also noted that forecasting how much employment will decrease due to JobKeeper ending is fraught, saying the jobs lost may be offset by other sources of employment growth or exacerbated by other causes of lower employment such as another outbreak of COVID-19.

Professor Borland came up with his estimate by creating a framework of what jobs might be destroyed with the end of JobKeeper. With this framework, he aimed to measure two types of jobs.

First are jobs that would have been lost over the past year due to regular causes such as business failure and low demand, even had COVID‐19 not happened.

“These jobs may have survived longer than otherwise due to the JobKeeper wage subsidy, but with its ending will become unprofitable for firms to retain. An example might be jobs in a bricks-and-mortar retail outlet facing competition from online retailers,” he said.

The second type of jobs measured in Professor Borland’s estimate were the ones that in the absence of COVID would be retained but unprofitable for businesses to retain once JobKeeper ends because the effect of COVID on them is not entirely undone, citing the aviation industry as an example.

“How could we go about measuring these components? Well, for those of us relying on publicly available data, with great difficulty is the answer,” Professor Borland said.

Recent public figures showed that over 500,000 businesses have graduated from the program since the end of September last year.

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