One in three workers from Australia’s food and accommodation sector have lost their job during the economic fallout of coronavirus.
The economy will take a $50 billion hit in the June quarter but things could get a lot worse if restrictions to deal with the coronavirus stay in place.
As the nation’s leaders start planning baby steps towards normality, Treasury bean counters have calculated the economic cost of the health measures.
Treasury estimates every extra week the current restrictions stay in place costs another $4 billion.
Australian Bureau of Statistics figures released Tuesday also found nearly a third of arts and recreation jobs were lost between mid-March and April.
The economy shed 7.5 per cent of jobs, with wages shrinking by eight per cent.
Food and accommodation workers aged 20 to 29 and over 70 were the hardest hit, with more than 40 per cent of those age groups out of work.
Australia’s economy is forecast to shrink by between 10 and 12 per cent by June, equivalent to $50 billion, Treasurer Josh Frydenberg has confirmed.
But Australia is fortunate in not having had to resort to a full lockdown.
“Significant sectors of our economy like agriculture, mining and construction have been able to adapt to the new health restrictions and in most cases continue to operate,” he will tell the National Press Club on Tuesday.
Shadow treasurer Jim Chalmers said the Treasury estimates were very confronting.
“The longer that the economy is shut down, the more impact that will have on jobs, livelihoods, living standards and people’s personal finances,” he told ABC TV.
“Every decision-maker in the economy, whether it’s the politicians, the employers, and the workers, have difficult decisions to weigh up.”
Treasury expects the jobless rate to double to 10 per cent by June.
It says the situation would be a lot worse but for the government’s JobKeeper wage subsidy.
The number of jobs advertised more than halved in April, a record monthly drop.
“Notwithstanding Australia’s success to date on the health front, and the unprecedented scale and scope of our economic response, our economic indicators are going to get considerably worse in the period ahead before they get better,” Mr Frydenberg will say.
He believes there is cause for optimism about the future.
The heads of Treasury and the Reserve Bank have told leaders policies to promote economic growth after the health crisis passes must not be business as usual.
But Mr Frydenberg will point to the coalition’s intention to hold fast to its guiding values and principles and say that dynamic, innovative, and open markets are key.