Australia’s government must present a comprehensive plan for future job creation as the country addresses the economic consequences of the coronavirus pandemic, Shadow Treasurer Jim Chalmers said on Friday.
The government has announced a fiscal stimulus worth A $ 289 billion ($ 206.54 billion) around, around 14.6% of Australia’s GDP para, to support workers, households and businesses affected by the outbreak of the virus. Australia expects its budget deficit to widen significantly and the economy is projected to shrink by 3.75% this year.
Job loss is a major concern as the pandemic ended the nearly three-decade growth streak of the Australian economy, one of the longest in any country in the world.
Treasurer Josh Frydenberg in his July Economic and Fiscal Update said the unemployment rate is forecast to peak at around 9.25% in the three months ending in December. Although the labor market is expected to strengthen beyond 2020 due to an uptick in demand, the unemployment rate will take time to decrease, according to the update.
“What that shows is that an estimated 240,000 extra Australians are expected to lose their jobs between now and Christmas, to add to the million who no longer have a job,” Chalmers said on CNBC’s “Squawk Box Asia”. He added that this week’s budget update “should have had a plan” on how the government would create jobs once temporary support measures move away from the economy.
Data from the Australian Bureau of Statistics showed that the unemployment rate in June was 7.4%, with up to 992,300 people out of work.
Hundreds of people queue in front of an Australian government welfare center, Centrelink, in Melbourne on March 23, 2020.
William West | AFP via Getty Images
As part of its economic response to Covid-19, the Australian government introduced temporary subsidies and supplemental measures to help companies keep more people employed and provide additional support to people who have lost their jobs. Support for both measures was extended this week.
Chalmers, a member of the Australian Labor Party, explained that while those measures have helped businesses and workers, Australia needs a comprehensive plan for creating new jobs for the future, one that focuses on where new jobs originate.
“We could invest in public housing, which requires a lot of labor. A lot of associated jobs. Build something with a lasting benefit for our most vulnerable people. That is an idea that we should have heard more about this week,” he said.
Another option would be to classify Australia’s energy policy for companies to get cleaner and cheaper energy to lower business costs, invest with confidence and hire more people, according to Chalmers.
“This recession will be longer than necessary, the unemployment queues will be longer than necessary if the government does not present a genuine and comprehensive plan for future jobs,” he added.
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