The Australian economy is prepping for a 28 March 2021 axe of the federal government's JobKeeper payment scheme.
The JobKeeper scheme has been a critical tool in battling the economic effects of the coronavirus.
Following the approval of US President Joe Biden's stimulus package, many Australians are wondering what comes after JobKeeper, and what its cessation means for the economy.
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Economist predicts dramatic job losses
Today's The Australian features Commonwealth Bank of Australia (ASX: CBA) economist Nicholas Guesnon discussing his opinion about JobKeeper payments coming to an end.
Guesnon believes that up to 110,000 employees working in sectors still vulnerable to the economic impacts of coronavirus, like travel, are at risk of losing work. He estimates up to 25% of employees presently receiving the benefit could lose their job.
Guesnon further mentioned that he thinks the transport, arts and recreation, accommodation and food services sectors will suffer a blow in the coming weeks. This is due to these industries' association with and reliance on international travel, an important part of the economy that's been ravaged by the pandemic.
NSW Treasurer says JobKeeper payments must end
New South Wales Treasurer Dominic Perrottet supports the winding up of the JobKeeper scheme.
According to the Sydney Morning Herald, Perottet said:
We cannot continue to make decisions today that impact generations to come to pay back the depth of the circumstance we find ourselves in…
We need a proportionate and measured response.
Perrottet's guess at which sectors of the economy would feel the biggest hit from JobKeeper payments disappearing include construction, manufacturing, administration and tourism.
Foolish takeaway
Some economists, such as Su-Lin Ong at RBC Markets, aren't expecting anything too crazy to happen once JobKeeper payments end.
The Australian notes that she expects a short-lived disruption to the economy when unemployment numbers rise before they fall again.
But considering the stimulus packages that continue to be dished out around the world, the Australian Government may still be considering its next move after JobKeeper.
