Long before thousands were left jobless from the coronavirus pandemic restrictions, Australia’s jobless rate climbed a slight 0.1 percentage point from 5.1 per cent in February to 5.2 per cent in the first two weeks of March.
When the widespread COVID-19 restrictions were announced, the country’s unemployment rate inched higher.
Unemployment increased 20,300 to 718,600 persons over the March 1-14 period, according to data collected by the Australian Bureau of Statistics (ABS), which surveyed about 50,000 people.
The underemployment rate also rose by 0.1 percentage points to 8.8 per cent. Full-time employment decreased 400 to 8,882,200 persons in the same period and part-time employment increased 6,400 to 4,135,400 persons. Employment in this period increased 5,900 to 13,017,600 persons.
But, according to Employment Minister Michaelia Cash, despite the figures shown, the worst is yet to come. The latest figures shared still don’t show the impact of the lockdowns and won’t show until April’s job figures are released by ABS.
“Today’s data shows some small early impact from COVID-19 on the Australian labour market in early March, but any impact from the major COVID-19 related actions will be evident in the April data,” said Bruce Hockman, chief economist at ABS.
“Given the expected unseasonal change in key labour market indicators in the current COVID-19 context, the ABS will increase the focus on seasonally adjusted over trend data estimates for April and subsequent months,” Hockman said.
Cash said it is clear from what the Treasury modelling shows, unemployment will spike in June at around 10 per cent.
That figure means about 1.4 million people will be out of work by that time.
According to Cash, the figure could have been up to 15 per cent if it weren’t for the government’s wage subsidy scheme.
The wage subsidy scheme sees employees paid $1500 each fortnight. A total of $130 billion of wage subsidies are being readied by the federal government as it scrambles to save six million jobs.
For companies with a turnover of $1 billion, a 50 per cent downturn will be needed to qualify.
More than 730,000 businesses have registered for the program (Cash said latest figures now show more than 850,000 businesses have put their hand up for the program), which will give out money for wages paid from March 30, since it was announced last week.
All full-time and part-time workers are eligible, along with casuals that have a 12-month link to their employer, sole traders and New Zealanders on 444 visas.
The day after the lockdowns were implemented, people queued outside Centrelink offices across the country registering for benefits.
The bureau said people receiving the JobSeeker payment will not automatically be counted as unemployed. And there are changes to the JobSeeker program as a result of the pandemic which would mean recipients do not have to meet the usual requirements in looking for work.
Westpac economists have said unemployment rate might tip to 11.75 per cent by the middle of the year.
Westpac recorded the biggest fall in Australian consumer confidence in its 47-year history of doing this survey.
The Westpac-Melbourne Institute Index of Consumer Sentiment showed a 17.7 per cent decline to 75.6 in April from 91.9 in March as governments instituted widespread restrictions to stem the spread of the pandemic.
“This is the single biggest monthly decline in the 47-year history of the survey, taking the Index beyond GFC lows to levels only seen during the deep recessions of the early 1990s and early 1980s,” Westpac said.
“However, it is pertinent to note that the lows in previous recessions were reached after one to two years of continuous deterioration compared to the one month collapse we have seen here.”
According to Westpac, they are not ruling out the Index dropping below the historic low of 64.6 they saw in November 1990.
“The details of the survey are all very disturbing and reflect the large shocks to jobs and spending. However the most surprising message is the collapse in confidence in the housing market.”
Australian retailers closing stores
The COVID-19 pandemic has led the federal government to implement social distancing rules and travel restrictions that have hit the retail sector hard.
While most retailers are technically still allowed to trade, many have opted to shutter stores temporarily and are now faced with the herculean task of staying top of people’s minds during lockdown.
Inside Retail has compiled a list of Australian retailers that have opted to close, including Cotton On Group, Country Road Group, Accent Group, Brand Collective, Cue Clothing Co, Decjuba, Kathmandu, Michael Hill, Premier Investments, PAS Group and Mosaic Brands, among others.
Retail Food Group has closed 90 Donut King, Gloria Jean’s and Michel’s Patisserie Australian-based franchisees as the coronavirus outbreak continues to wreak havoc not only in the fashion industry but also in cafes and restaurants.
Department store Myer has joined the list of retailers that have closed its doors during the health crisis for an initial period of four weeks until April 27.
Approximately 10,000 staff across the store network and head office have been stood down without pay during the period. Full-time and part-time employees will have access to annual leave and long-service entitlements in addition to government assistance.
David Jones has posted a rise in online sales of 108 per cent while foot traffic has declined while the public continues to self-isolate. David Jones said online sales made up 20.3 per cent of their sales. However, overall sales for the period fell 19 per cent compared to the previous corresponding period.
A number of Australian retailers also had to close their stores overseas to comply with governments’ COVID-19 restrictions. Pizza giant Domino’s Pizza Enterprises had to close its stores in France to align with community expectations. Stores in its other nine markets, however, are permitted to trade and continuing to serve customers. Michael Hill had to close its store network in Canada and Harvey Norman had to close its Slovenian stores by government decree and will remain closed until further notice. The retailer also had to close its stores in Malaysia.
The rise of the supermarkets
While other retailers had to close shop during the lockdown, supermarket chains are thriving.
Woolworths announced at the end of March that it was planning to hire 20,000 workers to meet the demand of their customers. The supermarket giant has already placed around 3000 ALH Group employees, who were stood down as a result of mandatory hotel closures, in new roles across BWS, Dan Murphy’s and supermarkets. They have also announced plans to support those in customer-facing roles who have recently lost their jobs as a result of the COVID-19 pandemic, including those from Qantas, Village Entertainment, Michael Hill Jewellers, Cotton On, Accor and Super Retail Group.
“These are uncertain times for many different sectors and we feel for all Australians whose livelihood has been impacted by the coronavirus,” said Woolworths’ chief people officer Caryn Katsikogianis.
Coles has launched three new distribution centres across New South Wales, Queensland and Victoria to meet demand, with more on the way according to CEO Steven Cain.
Cain said they are also looking to open additional distribution centres to help them move more stock to stores and will help create even more jobs.
The supermarket giant is working with employers and unions to place those that have recently lost their job as a result of the health pandemic.
Panic buying boosts retail spending
Retail spending surged 0.5 per cent in February as people stocked up on essential items ahead of the onset of the COVID-19 pandemic, data from ABS showed.
According to ABS, the figures rose more sharply than expected as shoppers stocked up on basic necessities in supermarkets and department stores in anticipation of coronavirus restrictions.
Retail trade rose by 0.5 per cent in February to $27.8 billion, seasonally adjusted. Preliminary retail figures released two weeks ago suggested shoppers frantically buying toilet paper, rice, pasta and other goods due to coronavirus fears would result in a 0.4 per cent rise for the month.
The February increase follows an unrevised 0.3 per cent decline in January, which was weighed down by people staying indoors because of the smoke from the devastating bushfire that hit eastern Australia throughout the summer.
Rent relief for retailers
The Federal Government has announced a commercial rent relief in an effort to keep small businesses that have already shut down the best chance of surviving.
Struggling businesses that have seen major downturn in revenue will be able to apply to have rents reduced by a proportionate amount.
This rental reduction will be a combination of at least 50 per cent rent waiver, as well as a rental deferral. Affected business will have a minimum of 12 months after the fact to pay the deferred amount.
This framework will only apply to commercial tenancies where the tenant or landlord is eligible for the JobKeeper payment and has a turnover of $50 million or less.
According to Westpac, while the drop in confidence this month is severe, it could well have been worse.
Despite the bleak and threatening backdrop, Australia’s pandemic experience to date has been much less debilitating than that of the hardest hit areas abroad.
The number of cases is high but has not overwhelmed Australia’s health system, with recent evidence showing a clear slowing in new cases that indicates policy measures are working to contain the spread.
“These developments give some support to our view that the Australian economy will lift in the December quarter following three consecutive quarters of economic contraction.”