Unemployment goes down… Yay!?
Sorry could you repeat that, did the ABS just say unemployment has decreased? Believe it or not, the ABS figures for national unemployment levels in August saw a fall from 7.5% to 6.8%. The result is a good start but certainly not one to celebrate, considering that unemployment at pre-covid levels in February was 5.1% and full employment in Australia is deemed to occur when the figure reaches around 4%.
As those states who have dealt with community transmission effectively reopen back to a normal level, 111,000 jobs have been created (or more likely reborn), which is the most positive reason behind the fall in unemployment.
However on the flip side, the lower figure is also a result of thousands of Australians just giving up the search to find work.
Government shouting the bill
A senate inquiry into treasury figures of the governments financial stimulus packages revealed that 55% of the $179 Billion Stimulus package has already been spent with $55 Billion of that comprising of wages from the JobKeeper program.
However, the Australian Taxation Office has begun investigating thousands of illegal claims into JobKeeper, with some instances of people applying for it more than once so they could access more than $1500 per fortnight. The ATO has already recouped $75 million in ineligible payments with the ATO chief commissioner Chris Jordan stating the “full force of the law” will be brought down on those who try to rort the system.
Additionally, around 1200 individuals have utilised the early superannuation release scheme as a way to avoid paying tax.
The ball is in the tenants court
The RBA has released a report stating that rental prices in inner city regions will continue to fall and the recovery in prices will be weak throughout 2021. Rental prices in inner Melbourne and inner Sydney fell on average 13% and 10%, respectively.
Beyond the obvious reasons of COVID sending renters back home, the increased supply of apartments coming onto the market as well as low forecasted population growth will serve to put a burden on rental prices.
ASX 200 struggles to recover from recent correction
The ASX 200 has lifted by a mere 0.3% across the week, the increase in employment levels did little to calm investor’s nerves. The NASDAQ 100 has recently been on a downwards run which has placed a significant level of downward pressure on markets in Australia.
AMP Capital Chief Economist Shane Oliver states that “September is often the month for corrections” and if you’re a budding investor you would have felt the pain of this all too well. As most companies continue to release less than stellar financial year earnings announcements, investor are less optimistic about the future.
Prime Minister backs gas to lift us out of recession
The Prime Minister has proposed a “gas led recovery” in order to lower the price of gas domestically that our manufacturers need to remain internationally competitive. The government has vowed to establish a gas refinery in the Hunter Valley region of NSW if the big energy companies fail to deliver an extra 1000 megawatts of power by 2023.
Scott Morrison believes it will create 850,000 jobs in the manufacturing industry, however it has been met with fierce criticism from climate activists, business editors and even people within the Coalition party.
While the rest of the world is adopting clean and renewable energy, Australia goes the other way.