ACT unemployment rate to double amid COVID-19 shutdown, Barr says

Mr Barr said figures supplied by the federal government indicated about 6000 Canberrans had lost their jobs since widespread restrictions to slow the spread of COVID-19 came into effect in March.

The ACT's unemployment rate will jump from 2.9 per cent to about 6 per cent as a result of the job losses, he said.

The spike in the territory's unemployment rate would be consistent with the increase nationwide.

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Federal treasury is predicting Australia's unemployment rate to hit 10 per cent in the June quarter, with more than 700,000 people expected to lose their jobs amid the pandemic.

The ACT has for some time laid claim to the nation's lowest level of unemployment, which Mr Barr said meant the territory entered the downturn in much better position than other states.

The ACT government's $20 million program to hire casual workers in the public sector - known as Jobs for Canberrans - would provide job opportunities for some laid off workers, he said.

Mr Barr said new opportunities would also arise as part of a wide "re-engineering of the Australian economy", which would need to occur as border restrictions dried up the import market.

The figure on local job losses was based on the proportion of new applications to JobSeeker - about 1 per cent - which had been made by Canberrans in the past month.

Leading economists said the public sector's large share of ACT employment would help protect the territory during the coronavirus economic shock.

Economist Saul Eslake said it would probably give greater protection for Canberra-based professional services firms, which had government clients, than similar businesses in other parts of Australia.

The ACT compared with the nation had a slightly higher percentage of its workforce in accommodation and food services, where job losses had been larger, and much smaller proportions in agriculture, mining and manufacturing, where job losses had been fewer.

"But all of those differences are more than overshadowed by the large share of public sector employment," Mr Eslake said.

Commonwealth Bank's head of Australian economics Gareth Aird said the COVID-19 economic downturn would have a significant negative impact on the ACT, like all states and territories.

"But a high concentration of the workforce in the public sector should mean that the ACT performs better than the national average," he said.

Deloitte economist Chris Richardson said Canberra was a relative safe haven in a crisis, as shown in previous recessions.

The ACT's public sector was growing as it helped battle the virus, and the population was slightly younger than the national average, he said.

"And the 'garden city' concept that underpinned Canberra's development means that its population density is less dangerous than it looks," Mr Richardson said.

"On the employment front, Canberra is mostly shielded from the mass unemployment seen elsewhere.

"Big government policies mean bigger governments. That's why the fall in employment is lower in the ACT than elsewhere.

"And it is also why, after the initial fall, the rebound in ACT jobs comes on a lot sooner," he said.

However, the private sector had a growing share of the economy in Canberra, and the closure of cafés, bars and restaurants had hurt that sector.

"On the other hand some of those who have lost their jobs will return to their 'home' cities, allowing a low unemployment rate to mask some of the actual pain."

Federal Treasurer Josh Frydenberg on Tuesday said unemployment was expected to rise nationally from 5.1 per cent in recent figures to 10 per cent in the June quarter, the worst figures since 1994.

Mr Frydenberg said the unemployment rate was projected to peak at 15 per cent without the $130 billion package of wage subsidies, passed by federal parliament last week.

The federal government is spending $320 billion or 16.4 per cent of GDP to combat the economic shock of coronavirus-related restrictions.

Prime Minister Scott Morrison said Treasury's estimate that the unemployment rate could reach 10 per cent was "absolutely heartbreaking".

But the Prime Minister downplayed suggestions it could surge even higher and reach close to 20 per cent, saying it was not what the government's economic advisers were currently forecasting.

Nonetheless, Mr Morrison admitted on Channel Nine's Today show that the economy was being severely affected by the COVID-19 virus and the restrictions being imposed to curb its spread.

"It is still a big blow. I don't want to lessen that in terms of how we speak of it. It's a serious impact on our economy, it's impacting people's livelihoods and it's heartbreaking."

With Adrian Rollins

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