With unemployment having risen by over 50,000 people in the year to September, the Australian Council of Social Service warns that the risks of a sharp and substantial rise in unemployment over the next year are real and growing. 

Interest rates are rising at a time when unemployment is already climbing, and because rate rises take a year or more to work through the economy, the full effect of recent increases on unemployment is still ahead of us.

“Since interest rates started to rise in 2022, more than 200,000 additional people have been pushed out of paid work,” said ACOSS CEO Dr Cassandra Goldie.

“Interest rates work with a lag and increases already in the pipeline will push unemployment higher over the coming year. Every further rise adds to that risk.

“The biggest threat to a person’s living standards is losing the opportunity for paid work. People locked out of the labour market are forced onto JobSeeker, which is just 41% of the minimum wage and leaves them living well below the poverty line. 

“The Government must lead on bringing inflation down fairly, so that people on low incomes are protected. 

“Governments must step in to slow rent increases and cap out-of-pocket medical costs, including specialist fees, take solar subsidies off energy bills and stop any plans for further tax cuts.”

Background

• Total unemployment has increased by 200,000 since mid 2022, when interest rates first started to rise.
• People receiving the JobSeeker payment for a year or more has increased by 100,000 over the last two years and is above its pre-pandemic level.
• Job vacancies at the lowest skill level have fallen by 31% since 2022, the largest fall of any skill level.