The Prime Minister has warned that it will take years to get the economy back on track after unemployment hit its highest level in two decades.
Unemployment rose to 7.1 per cent in May – the highest level in more than two decades – as 277,700 people lost jobs or left the work force.
“These are our dark times, but I can see that ray of light,” Prime Minister Scott Morrison told media following the release of the figures. “We will not rest. We are working with some of the biggest economic challenges this country has ever faced and our government is working day and night to get the balance right, to get the right supports in place.”
Treasury is now estimating that the hit to employment may only be 8 per cent compared to the previously forecast 10 per cent. But the Prime Minister warned that much of the damage is already done.
“We’re looking at around two years to get the economy back to it was before COVID hit it,” Mr Morrison said. “It will take us, we estimate, around two years to get just back to where we were before it happened, and we think over five years we can seek to catch where we were planning.”
The figures come as the Prime Minister unveiled the government’s plan to boost the economy through massive infrastructure investment that is expected to support more than 66,000 jobs. Mr Morrison announced 15 major projects worth $72 billion in public and private investment are on the “fast-track for approval”, including an inland rail link from Melbourne to Brisbane, an extension to the Olympic Dam in South Australia, and emergency town water projects in NSW.
“Such expenditure, where carefully planned and controlled, will support growth and it will boost confidence,” Mr Morrison told the Committee for Economic Development of Australia earlier this week. “But we must be extremely cautious about our expenditure, especially as we navigate our way back from the record fiscal supports now in place.”
Mr Morrison also revealed that more than $100 billion of economic activity had been lost through the year, while the federal budget was set for “record deficits”.