Frydenberg: Why it’s vital that JobKeeper payments end next month

Treasurer Josh Frydenberg has told his Coalition colleagues that it is important the JobKeeper wage subsidy ends in March as planned.

Feb 17, 2021, updated Feb 17, 2021
Federal Treasurer Josh Frydenberg (Photo: Steven Saphore/AAP PHOTOS)

Federal Treasurer Josh Frydenberg (Photo: Steven Saphore/AAP PHOTOS)

He said a Treasury review found JobKeeper is having some perverse outcomes that were preventing workers moving freely across the economy.

This has resulted in labour shortages in some areas.

“This successful and expensive program must end but other policies will fill that place,” he said, pointing to initiatives such as the government’s tax cuts.

However, economists have told Committee for Economic Development of Australia it was “very naive” to believe that the end of JobKeeper and the JobSeeker coronavirus supplement would not have an impact on the economy.

The national think tank’s annual economic and political conference takes on an international flavour on Wednesday when it will be addressed by Australia’s US ambassador and former Liberal senator Arthur Sinodinos.

His appearance comes at a time of major change in the US with the election of President Joe Biden and as China wields its enormous influence across the global economy.

At the same time, Reserve Bank assistant governor for financial markets Christopher Kent will address a Finance & Treasury Association’s foreign exchange roundtable webinar.

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The central bank released the minutes of its February 4 board meeting on Tuesday, which re-emphasised the need to keep interest rates at record lows as “long as necessary” to keep the economic recovery on track.

The National Skills Commission will also release its monthly vacancy report, a guide to future employment.

Australian Bureau of Statistics figures on Tuesday showed payroll jobs rose by a further 1.3 per cent in the fortnight to January 30 to stand around the same level as last year.

Economists expect monthly labour force data on Thursday will show the jobless rate eased further to 6.5 per cent from 6.6 per cent in January as another 30,000 people joined the workforce.

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