Finance Work Josh Frydenberg talks up jobs market recovery but concedes more pain ahead
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Josh Frydenberg talks up jobs market recovery but concedes more pain ahead

New Treasury figures show Australians have reclaimed hundreds of thousands of jobs since April.
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More than half of the 1.3 million Australians who lost their jobs or were stood down at the start of the crisis had returned to some form of work by July, Treasury figures show.

As restrictions eased across the country, business owners put on 689,000 workers between April and July.

Firms created 340,000 jobs, and gave shifts to another 349,000 employees who were previously working zero hours.

But ABS data shows most of the jobs created were part-time, rather than full-time, and Treasurer Josh Frydenberg concedes we’re still a long way from normal.

“We know the road to recovery will be bumpy as we have seen with the setback in Victoria, however, the jobs recovery across the rest of the country gives cause for optimism that through containing the spread of the virus and reopening the economy we will get through this,” he said.

It comes after Reserve Bank governor Philip Lowe used the national cabinet meeting on Friday to urge state governments to spend another $40 billion on public works to create more jobs.

Released on Sunday night, the latest Treasury figures show the national effective unemployment rate fell from a peak of 14.9 per cent in April to 9.9 per cent in July.

This amounts to 1.33 million people, down from 2 million, and includes unemployed Australians looking for work, people with a job who are working zero hours, and those who have lost jobs since March but are not actively looking for a replacement.

It differs from the official unemployment rate, which rose from 7.4 per cent to 7.5 per cent in July, as the Australian Bureau of Statistics only counts someone as unemployed if they are out of work, available to work, and actively looking for work.

RBA governor Philip Lowe wants state governments to spend another $40 billion on infrastructure over the next two years.

But even though the effective unemployment rate has fallen since April, Treasury says the extended lockdown in Victoria will reverse that trend.

Its latest estimates have effective unemployment rising above 13 per cent in coming months, which would mean an extra 450,000 Australians losing their jobs or being stood down to zero hours in August and September.

“There is still a long way to go through this crisis and high frequency data is showing signs that the jobs recovery may be slowing as state border closures have been tightened,” Mr Frydenberg said.

How the states stack up

Treasury’s estimates also provide a state-by-state analysis of the effective unemployment rate.

It shows that New South Wales has enjoyed the strongest recovery and increased effective employment by 315,000 people since April.

That accounts for 46 per cent of the national lift in effective employment over that timeframe – which is much higher than the state’s share of national employment (32 per cent) – and takes the state’s effective unemployment rate from a peak of 15.8 per cent in April to 8.5 per cent in July.

Lower unemployment rates can be found elsewhere, but no other state has brought back as many jobs as NSW.

Queensland cut its effective unemployment rate from 15.1 per cent in April to 11.4 per cent in July – meaning an extra 100,000 people have gained effective employment.

This amounts to 14.5 per cent of the national increase, which is lower than the state’s share of national employment (20 per cent).

Victoria’s effective unemployment rate fell from 14.6 per cent in April to 10.5 per cent in July.

This means an extra 149,000 Victorians had gained effective employment – a figure that represents 21.6 per cent of the national increase, which is below the state’s share of national employment (26 per cent).

Western Australia’s effective unemployment rate dropped from 14.4 per cent in April to 9.8 per cent in July.

That means over that timeframe an extra 67,000 Western Australians found jobs or were called back to work after being stood down.

This represents 9.7 per cent of the national increase in effective employment, which is below the state’s share of national employment (10.5 per cent).

South Australia cut its effective unemployment rate from 15.3 per cent in April to 9.8 per cent in July – meaning 51,000 South Australians gained effective unemployment.

This is equal to 7.4 per cent of the national increase, which is above the state’s share of national employment (6.6 per cent).

Meanwhile, Tasmania’s effective unemployment rate fell from 14.1 per cent in April to 7.9 per cent in July.

That means 17,000 people in the state found new jobs or were called back to work after being stood down.

This represents 2.5 per cent of the national increase in effective unemployment, which is above the state’s share of national employment (1.9 per cent).

Treasury did not provide detailed estimates for other states.

Its analysis come after the Parliamentary Budget Office revealed on Friday that net federal government debt in 2029-30 would be $800 billion higher than it otherwise would have been had it not been for COVID-19.

Business uncertainty at new high

A new survey of chief financial officers found bosses who hold the company purse strings have seen their uncertainty about the economic outlook pushed to a record-high 92 per cent, up from 72 per cent six months earlier.

More than three-quarters of respondents see some sort of revenue decrease in the second half of 2020 and nearly three in five expect revenues to be lower than their pre-pandemic expectations in 2021, according to the twice-yearly Deloitte CFO sentiment survey.

“A COVID-induced global economic downturn, the largest since the Great Depression, has hit hard, net optimism has fallen drastically, and uncertainty is at an all-time high,” Deloitte partner Stephen Gustafson said on Monday.

Still, 53 per cent remain optimistic about the future.

“While many see business conditions as worse than six months ago, they’re also not pulling down the shutters,” Mr Gustafson said.

-with AAP