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Government can help create a JobKeeper soft-landing

"While bringing JobKeeper to an end makes sense in the context of the ongoing recovery in the broader economy, the risks that arise from its withdrawal should be carefully managed to help create a soft landing," Innes Willox, Chief Executive of the national employer organisation Ai Group, said today.

"Ultimately, the end of JobKeeper is an opportunity to rebalance and reset Government measures to take the economy forward in a more sustainable way.

"JobKeeper lasted six months longer than originally envisaged. Undoubtedly many sectors will need further support, such as tourism, accommodation, entertainment and international education. The Government's tourism and aviation measures are important steps towards the management of these risks and there is clearly more scope for further targeted extension of these measures.

"However, many businesses in other sectors will welcome the end of JobKeeper because of the difficulties they are experiencing in attracting labour, especially relatively unskilled labour, as they grow.

"We need a mix of short-term supports and long-term policy settings to ensure sustainable long-term economic recovery.

"While some of these risks are already being addressed, there is a further role for selective policy measures to be put in place to address the possibility of a sharp increase in redundancies and insolvencies in the months ahead.

"A number of measures should be considered by the Federal Government.

"These include:

  • Ramping up policies targeted at Youth Unemployment. For example, a lift in support for greater job-readiness and helping employers meet the cost of upskilling new employees.
  • Giving greater publicity to the availability of the JobMaker Hiring Credit and reducing the red-tape burden associated with this program.
  • Targeted assistance to assist participation of vulnerable groups including people with disabilities.

"In addition, the withdrawal of JobKeeper and household assistance measures will reduce the extent of fiscal stimulus in the economy. It is critical that the states and territories ensure that momentum is maintained in the rollout of their infrastructure programs in the months ahead.

"Both in relation to the infrastructure programs and more broadly across the economy, areas of acute skill shortages are holding back areas of expansion. The greater support being provided for trainees and apprentices is very welcome in this area and extending this type of support to a broader range of opportunities in the form of cadetships would be very positive in coming years. In the meantime, a selective increase in skilled migration – with support from expanded quarantining capacity – would could help address areas of acute skill shortages in the near term.

"The temporary provisions in the Fair Work Act that were implemented to facilitate the JobKeeper scheme also come to an end on 28 March. This is likely to cause significant difficulties for many distressed businesses (e.g. suppliers in the aviation industry). A large number of companies have been relying on 'JobKeeper enabling stand-down directions' to implement shorter working hours arrangements and to stand-down employees, but they will no longer be able to rely on these directions after 28 March. There are likely to be redundancies as a result," Mr Willox said.

Media enquiries: Tony Melville – 0419 190 347