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Reserve Bank of Australia governor Philip Lowe has backed the government’s decision to let JobKeeper expire in March despite potential “job shedding” once the wage subsidy is withdrawn.
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RBA backs JobKeeper end
04 February 2021
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9 minute read
Speaking at the National Press Club on Wednesday, Dr Lowe said he understood the government’s decision to wind down the JobKeeper program at the end of March due to indicators of recovery across the economy.
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“Am I disappointed the government is stopping the JobKeeper program? No. The government made it clear this was a temporary program,” Dr Lowe said.
“It’s been an incredibly important program. I think it’s saved many people their jobs and helped people in their lives. So, it’s been incredibly important.
“Given the recovery of the economy, I can understand why the government wants to stop that program.”
Dr Lowe, however, has foreshadowed job losses once the wage subsidy program is withdrawn.
“It’s quite possible we have a month or two with the unemployment rate blips up,” Dr Lowe said.
“When we talk to businesses, our sense is that job creation is going to continue. I’m hoping that will be enough to offset the job losses from the ending of the JobKeeper program.
“But it’s something that there’s a degree of uncertainty round. We haven’t been in this area before. We don’t have any experience to draw on.
“It’s possible it could go the other way. But the central scenario is we continue to recover.”
Prime Minister Scott Morrison and Treasurer Josh Frydenberg have both stood firm on the government’s decision to end the JobKeeper program by its legislated end date despite pressure from the tourism and aviation industries.
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