Subject/s: ABS labour force figures, JobKeeper, JobSeeker, Mutual Obligation, Jobs Hub, PaTH Program
MINISTER CASH: Good afternoon everybody. And as we know, the labour force figures have today been released for April 2020. And as was expected, we have seen an increase in the unemployment rate to 6.2 per cent. We have also seen almost 600,000 jobs lost in the April period. As the Prime Minister said in his address to the nation, this is a devastating time for those people who no longer have a job. We went into this crisis with 13 million Australians in employment. That was actually record employment in Australia. And today we've seen that number drop by almost 600,000 to 12.4 million. We also saw today a drop by around 2.5 percentage points in the participation rate. This again was not unexpected due to school closures across Australia and the nature of COVID-19 restrictions. We also saw today though the Prime Minister announced that under the JobKeeper payment, the $130 billion investment that the Government is making in employers and their employees, that now 6 million workers are covered by that payment. That is a really good thing for those employers and for those employees, that they have been able to maintain that important employment connection throughout the devastation of COVID-19.
As the Prime Minister also said though, and the Treasurer also stated, we know there are still going to be rough times ahead. Treasury still anticipates that unemployment is set to rise and will peak at around 10 per cent. But what Treasury has also said, that if the Government, but for its JobKeeper payment, which now covers those 6 million employees, unemployment in Australia would have been around five percentage points higher. So, the Government has acted swiftly, $320 billion in support that has been so desperately needed by Australians. But what we have seen today – and it's a sad day for so many Australians – is the unemployment rate increase to 6.2 per cent. But as I said, 6 million Australians now covered by the JobKeeper payment, giving them that important lifeline to their employer.
Every day, I speak to employer after employer after employer and they pass on the good news stories of the JobKeeper payment. The fact that without the JobKeeper payment, they may not have had a business. They pass on the good news stories of the discussions that they can have with their employees and the benefits of maintaining that connection to employment. A manufacturer in Western Australia, he contacted me yesterday. One hundred employees, he has been able to keep them on and his email said to me: Michaelia, if it wasn’t for the Government’s JobKeeper payment, my business would have closed but because of the JobKeeper payments, I’ve kept my 100 employees. I’ve kept them on and my business continues in operation.
Of course though, it’s a difficult time for the 1.6 million people who are on JobSeeker. And in that regard, as the Prime Minister said, I am today announcing that the suspension of mutual obligation, that is the obligation for a person on JobSeeker to undertake activities such as looking for work, et cetera, will again be suspended until the 1st of June. I announced in late March this year that mutual obligation would be suspended and it would be continually reviewed. That suspension goes now until the 22nd of May. Cabinet formally agreed last night the suspension of mutual obligation would continue until the 1st of June. Any decision in relation to mutual obligation after that will be informed by the Department of Treasury's analysis of the ongoing status of Australia's labour market and the impact of ongoing COVID-19 restrictions.
I can also confirm that when mutual obligation is reintroduced, and as the Prime Minister said today, we are now on that three-step road to recovery. That is a good thing for Australians. And as we take those steps to reopen our economy, we do want people to actively engage with their job services provider so they understand what they can be doing at this time. That is just so important for them. But because of the nature of COVID-19 restrictions, I will confirm that when mutual obligation is reintroduced, it will be introduced in stages and in the first stage, there will be no penalties or suspensions applied. This should give people confidence that they can pick up the phone, talk to their provider. But if they don’t get around to doing that, or there are reasons that they are unable to do that, no suspension or penalty will apply.
Today is a sobering day for all of us. The unemployment rate has increased to 6.2 per cent. The participation rate has decreased. But it’s also a day where we can reflect on the $130 billion JobKeeper payment and the fact that 6 million people out there, 6 million employees, still do maintain that connection to their employer, and as we gradually reopen up the economy, we want to see those people go back to work and that is the job that the Government now has in front of it. We’ll work 24/7, and as the Prime Minister said when he addressed Australians today, the Morrison Government, we have your back.
JOURNALIST: Minister, how many stages are there? What are the stages of reintroducing mutual obligations?
MINISTER CASH: Yes. So, the mutual obligation suspension, just to confirm, is now continuing until the 1st of June. As you know, the National Cabinet next meet on the 29th of May to discuss the COVID-19 restrictions. Any decision that we make in relation to gradually bringing back mutual obligation will be informed by the nature of the COVID-19 restrictions – that remain in place at that time – and Treasury’s analysis of the labour market. But the Cabinet did determine that it would be a three-phased approach based on the phases that the National Cabinet have agreed to. But again, in that first phase- because you also have so many people who are on JobSeeker for the first time, they have never come into contact with this type of system before. What we want to do is a very limited form of mutual obligation would be introduced and it may only consist of touching base with your job provider because we also need to understand that if COVID-19 health restrictions are still in place, if we do have that social distancing, the 1.5 metres, it may not be appropriate to go to your job provider.
So, everything that we can do online, we will do. But certainly, any decision regarding the reinstatement of mutual obligation will be consistently informed by COVID-19 restrictions, the nature of the labour market at the time. It will be a three-phased approach and the first phase will be a very, very gradual reintroduction and I can confirm no penalties or suspensions will apply for at least that first four-week period.
JOURNALIST: What about asset-testing and the lifting of the income threshold of a partner when it comes to JobSeeker? Are you considering how you adjust that as well?
MINISTER CASH: Again, as the Prime Minister has said and this is obviously the purview of the Minister for Social Services, decisions were made by the Government to ensure that as many people as possible could access the JobSeeker payment. As we go along, we consistently review all policy settings but in that regard that is the purview of the Minister for Social Services Anne Ruston, and I would like that to her.
JOURNALIST: Minister, just on youth unemployment, it’s now around 14 per cent. It has been consistently more than double the national average. Just a bit of a two-barrelled one for you; do you anticipate that that will go up significantly once JobKeeper is lifted, given young people often work in those retail, hospitality jobs. And is it now time to reconsider?
MINISTER CASH: Look, and it's not unusual obviously, given the nature of the industries that have been severely, severely impacted by COVID-19 and were told by Government to shut down. You look at it - the hospitality industry in particular. How many young people work in the hospitality industry? I worked in the hospitality industry, a fantastic stepping stone into the workforce. So it is not surprising that we have seen the increase that we did today in youth unemployment. As we reopen the economy, though, and we can see even in my home state of Western Australia, we've moved to Stage Two, I think as of next Monday. So, we'll have the 20 person allowance. We should see more young people be given opportunities, in particular as the hospitality industry, restaurant and catering et cetera open up.
In terms of the programs that we have in place, we had, as you know, the Youth Jobs PaTH program. Under that, around 100,000 young people actually participated in that program. That was a great step forward because these were long term young unemployed young people. It gave them that confidence to get a job. We had around, I think it was around 52,000 employers access the wage subsidy for young people under that program. We were about to commence industry pilots, so tailored one-on-one programs for young people going into specific industries when unfortunately, COVID-19 devastated the economy. So, that has been put on hold.
But certainly, I think, you know, every month I've said, youth unemployment in Australia does remain a concern and that is why we were tailoring that PaTH program to really give it the industry training that was so required. But at this point in time, not unexpected given the nature of those industries that have really suffered as a result. But as we open up that economy, my role in particular is to ensure that the job providers are out there and they are letting their client base know what the opportunities are. And in fact it's one of the reasons that the Government launched the Jobs Hub because as we know, while so many industries have been devastated by COVID-19, there are some industries that are actually experiencing demand and are recruiting. And so if people are looking for work, and there are still many people out there who are actively looking for that, they can go on to the Jobs Hub and have a look what's in their local area.
JOURNALIST: Jobs PaTH didn’t even hit its targets even prior to the pandemic. It’s not looking like it’s going to hit its target after the pandemic. Is it time to be reviewed?
MINISTER CASH: We did do that review and I would say if we can get one additional long term unemployed youth into a job, that's a good thing. A hundred- almost 100,000 went through some element of the program; 53,000 wage subsidies. They face significant barriers but we did undertake the review and that is why we had launched the industry pilots. We will continue with those industry pilots. I am talking to the industries, in particular, what can we do now to make those programs more responsive as we see the economy open up. But my role as the Employment Minister is to sit down with industry and work out, now, how do we need to adapt our employment programs to COVID-19 to ensure that they are benefiting as many people as possible.
JOURNALIST: Minister, in phase two, would normal penalties apply?
MINISTER CASH: No.
JOURNALIST: How will phase two work?
MINISTER CASH: I can confirm that as well. What you'd see is a gradual reintroduction of mutual obligation. Again, and I do want to be clear, it will be informed by the COVID-19 restrictions that are in place at the time and nobody knows what they are. And of course, the analysis from the Department of Treasury in terms of the state of the labour market. But that first phase would literally be touching base with your job provider. So- and that's so important from a psychological aspect - understanding what your options actually are because there might be a short course you can do to upskill yourself during this time. No penalties, no suspensions. Gradually as we move into phase two, again, it would be increasing the number of appointments with your provider, potentially looking for a job. But again, that would be dependent on the Treasury analysis of the Labor market, and the most we would require people to do is up to four job searches a month. That is the most we would ask people to do. But again, no penalties or suspensions.
JOURNALIST: Minister, I’m going to ask when will normal penalties apply?
MINISTER CASH: Well we would hope as we move into Stage Three and we see that economy reopen.
JOURNALIST: And is phase two four weeks long as well?
MINISTER CASH: Look, again, that would be dependent on the nature of the COVID-19 restrictions at the time because as you know, whilst a three stage process has been agreed, and certainly the Federal Government has given its clearest indication, we would like to see us get to phase three by July. It does need to be dependent on where individual states are at a particular point in time.
JOURNALIST: So it won't happen nationally at the same time?
MINISTER CASH: No, it will happen nationally at the same time and that is why we are encouraging states to open up their economies sooner rather than later.
JOURNALIST: Minister, when will the requirement for job seekers to apply for jobs be reinstated? And is it really appropriate to be doing that as unemployment is still on the rise?
MINISTER CASH: And again, if you were here for the whole press conference? No, because I may have already answered that question. So the suspension of mutual obligation has been continued, now until the first of June. Any decision in relation to the lifting of mutual obligation will be informed by the next meeting of National Cabinet and COVID-19 restrictions at that particular point in time.
In relation to the first phase, I've made it very clear, the requirement would be to touch base with your job provider and there will be no penalties and there will be no suspensions in place at that time. This will continue until it is appropriate and the labour market dictates that there are jobs out there.
JOURNALIST: How could it ever be appropriate to require people to apply for jobs, you know, millions of Australians who apply for jobs when there are so few vacancies and unemployment is on the rise? What would the threshold be for that requirement?
MINISTER CASH: Yes, and that will be exactly based on COVID-19 restrictions that are in place at the time and Treasury's analysis of the labour market.
JOURNALIST: Minister, just on the treasury analysis.
MINISTER CASH: Yeah.
JOURNALIST: Can you give us just a rough idea as to what sort of analysis you’d need to make that decision?
MINISTER CASH: There is the continued analysis that Treasury are doing in relation to the state of the labour market, but also informed by the ABS labour force figures obviously. The anticipation that if we move through those three phases, you'll see 850,000 people are transfer. I do want to make it very clear, the Government is incredibly sympathetic to people who are on JobSeeker and that is why we have announced the continuation of the suspension until the first of June. We would like to implement a three stage gradual return. But again, any decision in relation to that will be informed by the COVID-19 restrictions that are in place following the meeting of the National Cabinet on the 19th of May, and of course, any analysis done by Treasury.
JOURNALIST: There are disincentive effects that deter people who are applying a job or even turning up to work if you’re on JobKeeper at the moment. Does that factor into the Government’s thinking over the coming months as the economy does reopen, the fact that if there’s too much welfare, it does create disincentives and it does hurt the economy over the medium term?
MINISTER CASH: Look, and as the Prime Minister said, in the first instance we have seen 600,000 people lose their job over the last four weeks and these have been people or jobs have been lost in the April period. These have been people who probably for the first time ever will be coming into contact with a JobSeeker payment. We have made decisions in relation to the period of time and it is a six-month period that JobKeeper and JobSeeker will be in place, with of course, an analysis done along the way.
We're a Government that’s very open to looking at situations as they arise. But the important thing is that we encourage people, regardless of what your situation is, to do what you can to prepare yourself for when the economy does reopen and there are jobs out there. And that is why we really do encourage people, you are able to touch base with your job provider, give them a call. Find out, is there a short course that you can do. Because when the economy does reopen, you want to be that person that has the necessary skills et cetera that the employer looking for a job says, yes, I will take you on board.
Thank you very much.