According to a new report, a recovering jobs market is easing concerns Australia’s economy will struggle to cope with the end of the JobKeeper subsidy in March.
In December, job figures revealed a decline in the unemployment rate from 6.8 percent to 6.7 percent, a contrast to the 7.5 percent in July during the depths of the country’s first official recession in decades.
“The jobs market has been very good,” Deloitte Access Economics partner and economist Chris Richardson told AAP during the release of the latest Quarterly Business Outlook.
“We already have six out of every seven of the initial job losses back.”
Richardson said the end of JobKeeper would always presents risks to the employment rate and the broader economy.
“It is genuinely looking less dangerous because we have done so well on jobs,” he added.
Richardson also expects wage and pricing pressures to remain muted, and inflation to stay steady until the unemployment rate drops below 6 percent, which is likely to occur in 2023.
Wage growth above 2 percent is expected in 2024.
“We welcome any encouraging signs in the economy,” Shadow Treasurer Jim Chalmers told reporters in Brisbane.
“But for it to be a good recovery, the right kind of recovery, we need to make sure that there’s job security and wages growth for ordinary working families,” he said.
“There’s no decent recovery without a recovery in wages. It’s as simple as that.”
Economist Gigi Foster said although Australia had made up “lost ground” with dropping unemployment rates, it was still far above the pre-pandemic rate of 5 percent.
“The primary factors we can directly control that are holding back our recovery now are continued restrictions on movement and economic activity, plus broad uncertainty about the timeline of restrictions and norms going forward,” the professor at the University of New South Wales’ School of Economics told The Epoch Times.
“Governments have a responsibility to provide an endgame timeline, after which we commit to returning to ‘business as usual,’ which businesses can then use to inform their communications to employees and their investment decisions,” she said.
“Without that clear guidance, many individuals and businesses continue in a sort of purgatorial suspended animation. The longer they stay there, the harder it will be to rebuild the economy to anything like what it was before the pandemic,” she added.
According to Deloitte’s Richardson, Australia, and other countries like Taiwan, Vietnam, and New Zealand are some of the few nations to enter 2021 in relatively good shape.
“COVID numbers are very low; the vaccine news is excellent, confidence is rebounding,” he added.
Victorian Premier Daniel Andrews has jumped on the report, which predicts his state will lead economic growth in 2021 with a rate of 5.4 percent, outpacing Queensland (4.6 percent) and New South Wales (4.4 percent)
“That should be something that sees Victorians confident … that 2021 is going to be a very different year than 2020,” he told reporters in Melbourne.
However, the recovery follows extensive lockdown measures to contain the outbreak of COVID in the state, notably the 112-day second lockdown, which included curfews and a 5km travel limit for residents.
Meanwhile, Queensland’s capital city Brisbane has just emerged from a three-day, city-wide lockdown after a single case of the mutated UK strain of COVID was discovered.