The end of Jobkeeper, the subsidy scheme that kept Australia’s economy above water in the tumultuous past year, has had many in the country keeping a cautious eye on the economic impact that may be felt.
Costing the government $90 billion, JobKeeper had over a million workers that were still relying upon it for income when the scheme ceased.
The economic cost may have been high, but the benefits to other factors during 2020 mitigated it. Unemployment rates in Australia peaked at 7.5% in 2020, but has since fallen to 5.8%. The projected outcomes from Australia’s October budget did not see the employment rate recovering until mid 202.
Many businesses that may have gone into insolvency and ceased trading were buoyed by the $1500 fortnightly payments to help pay their employees wages and kept the unemployment rate in 2020 from dramatically spiking.
The decision of the Australian government to extend the payments deadline further enabled Australia to avoid the consequences of what could have been a devastating financial crisis and allowed the economy to recover on paper.
The end of Jobkeeper could also mean a further increase in insolvent businesses, a dramatic change in the way the public views political handling of recessions and the impact of losing Jobkeeper for those still in lockdown.
It’s up to how Australia navigates through this withdrawal as to how well the economy does from here on.