Up to 250,000 More Unemployed When JobKeeper Ends Within Weeks in Australia

Up to 250,000 workers could lose their jobs when the JobKeeper wage subsidy ends this month as insolvency data reveals just three companies have used the Australian federal government’s new rules to help struggling employers restructure to avoid shutting down, the Sydney Morning Herald reported. The end of the $90 billion JobKeeper program on March 28 is expected to result in thousands of businesses failing, pushing 125,000 to 250,000 people out of work, University of Melbourne Professor Jeff Borland estimates. His analysis also considers revenue declines and businesses that would have closed under normal trading conditions but have been kept afloat due to the wage subsidy scheme. Prof. Borland, one of the nation’s most respected labour market economists, warns the ending of the subsidy means some jobs will become “unprofitable for firms to retain”. The Morrison government introduced a new insolvency process at the start of 2020 to support financially struggling but otherwise viable small businesses. Under these changes, eligible companies can appoint insolvency practitioners to help them restructure, pay creditors and continue to trade. But the scheme has been used less than expected. So far, only three companies are recorded as having appointed a restructuring expert under these rules, Australian Securities and Investments Commission notices show. Fewer than 20 businesses have declared they are eligible. Read more.