ActivePaper Archive Job ads dive as deficit blows up - The Age, 4/9/2020

Job ads dive as deficit blows up

EMPLOYMENT

Job ads in some industries have dived 97 per cent as Australia’s commitment to the largest budget deficit since World War II puts the nation’s triple A credit rating at risk.

One of the world’s biggest credit rating agencies, S&P Global, put Australia on negative outlook, the first of 11 nations with a triple A rating the agency warned could be downgraded due to the coronavirus pandemic and measures aimed at easing its financial effects.

The agency also put NSW, Victoria and the ACT, which all have triple A ratings, on negative outlook.

As the government won parliamentary approval for its $130 billion JobKeeper wage subsidy program, on top of $64 billion in other spending to help the economy through the coronavirus slowdown, Employment agency SEEK reported job ads are collapsing in the wake of the virus outbreak.

Since the start of March, job ads have collapsed by 65.3 per cent with some industries effectively shut down. Ads for sport and recreation positions are down by 97 per cent on the same time last year, while they are down by 84 per cent in the hospitality sector.

S&P said Australian debt levels would remain elevated ‘‘for a number of years’’.

‘‘The COVID-19 outbreak has dealt Australia a severe economic and fiscal shock,’’ it said. ‘‘We expect the Australian economy to plunge into recession for the first time in almost 30 years, causing a substantial deterioration of the government’s fiscal headroom at the AA rating level.’’

Negative outlook means the agency believes there is a one-inthree chance of Australia’s credit rating being downgraded.

S&P said while the government’s spending measures would soften the economic blows caused by the virus, there would also be a heavy hit to revenues as personal and company tax collections dried up.

S&P’s move is at odds with fellow rating agency Moody’s which earlier this week stood by its own triple A rating for Australia.