So what do the new unemployment figures tell us about the Australian workforce?
As some state borders begin to partially open and COVID numbers continue to decline, new figures have been released by the ABS. The slowing government funding support exposes which states are still stuck in limbo as they await the arrival of their economic spring, while some states are showing signs of blossoming from their economic ‘winter’.
With the national unemployment rate falling from 7.5% to 6.8%, a slash in fortnightly ‘coronavirus supplements’ would not help this number get any lower.
- Coronavirus supplement
- $550 → $250
- $1150 → $815
- Full time
- $1500 → $1200
- Part time
- Full time
Josh Frydenberg stated how our ‘…current regulatory framework, with respect to lending, is not fit for purpose’. The coronavirus crisis has seen hundreds of thousands of cash-strapped Australians defer their mortgages, with 1.4 million households now in mortgage stress. As a result, the housing sector has been calling for the bank loan- guidelines to be relaxed. Ahh yes, another initiative to accelerate our economy’s recovery from the ‘coronacession’ (haha, get it?). Changes in credit laws will aim to allow Australians to take out mortgages and refinance their home loans. In addition, small businesses can access more funding to compensate for their losses made, and to mitigate the effects of corona.
Putting this into perspective, let’s take the iconic brand, which was the epitome of primary school clout: Smiggle. Premier owns Smiggle and did not pay any rent in April when its stores were shut down. This resulted in the letting go of thousands of workers while feeding off the JobKeeper wage subsidy. Premier will also close up to 55/131 Smiggle stationery and office stores in the UK during the current financial year as a result of the deteriorating retail industry. I guess it makes sense how Premier shares fell 0.7% to $19.00.
Three of the major banks made up three of the top four performers on the ASX 200 index.
- Westpac was up 7.4%to $17.58
- National Australia Bank rose 6.9% to $18.37
- ANZ put on 6.3% to $17.93
- CBA increased a more modest 3% to $66.13.
The ASX 200 index closed up 1.5% at 5,965 as all sectors except healthcare made gains. The All Ordinaries index rose 1.4% to 6,141.
Higher iron ore prices boosted miners, with Rio Tinto up 0.8% and BHP gaining 1.9%.
Ending on a spicy note, here’s a small recap on Westpac’s $1.3 billion civil penalty for its 23 million breaches of anti-money laundering laws. They have overtaken Commonwealth bank’s $700 million fine in 2018, also for money laundering.
The biggest breach was Westpac’s failure to properly report more than 19.5 million existing funds or foreign funds entering into Australia, totalling more than $11 billion. Westpac has admitted it failed to properly assess and monitor the risks associated with some of these foreign transfers, some of which were with banks in “higher risk jurisdictions” including Iraq, Zimbabwe and Democratic Republic of Congo.
Despite $1.3 billion being an excessive amount of funds, don’t feel too bad because it is about the same as the cash profit Westpac reported in its most recent quarterly trading update – approximately three months’ worth of the bank’s earnings.
That’s not very cash-money of you, Westpac 🙁