the unemployment rate. “With more people in work and less people on welfare, the improvement in the labour market has been the key driver of the improved budget position,” he said. Last month, the proportion of people out of work dipped from 4.6 to 4.5 per cent, although this was partly on account of more people giving up on looking for employment opportunities amid the ongoing lockdowns.
Meanwhile, Finance Minister Simon Birmingham pointed out that Canberra has underestimated potential growth, with wages and the economy growing faster than anticipated. “…we saw tax receipts stronger than had been forecast and payments lower than had been forecast,” he added.
However, the Treasurer went on to admit that the good news from the end of the past financial year may be short lived, as the economic impact of the ongoing Delta outbreaks expected to wipe out any gains made during the past financial year.
“What these numbers confirm is that when restrictions are eased, the Australian economy bounces back,” he said. “By the time the COVID disaster payment has ended and the business support payments have ended, we will be up for a bill of more than $20 billion.”
According to Frydenberg, the decline in economic activity over the past few weeks on account of the in Victoria and NSW is estimated at $2 billion. “”It is a significant hit to the budget,” he noted.
