Policies the Australian government has used to reduce unemployment since 2020

JobKeeper Payment

The most significant and immediate policy response was the JobKeeper wage subsidy. The JobKeeper program subsidised wages for eligible employees in eligible businesses and not-for-profit organisations until March 2021, aimed at assisting businesses to cover the cost of wages so that more employees could remain attached to their employer even if work was not available than would otherwise be the case. Its impact was enormous. RBA research estimated that overall employment losses would have been twice as large without JobKeeper, with the unemployment rate around 5 percentage points higher in the absence of the scheme  equivalent to at least 700,000 fewer people leaving employment. Phase one of JobKeeper ran from 30 March until 27 September 2020 and provided businesses with $1,500 per fortnight per eligible employee. Under the extension after September 2020, fortnightly payments were reduced progressively before the program ended in March 2021

Coronavirus Supplement

Alongside JobKeeper, the government temporarily doubled the unemployment payment. The federal government provided substantial additional support to unemployed people in the form of a $275-a-week Coronavirus Supplement, which was later reduced to $125 a week in September 2020 and then to $75 a week. This kept households spending during the shutdown and supported a faster economic recovery. Poverty research showed COVID income supports cut the poverty rate for households with an unemployed main earner by ~25 percentage points — from 62% to ~37% — demonstrating how directly transfer payments reduce unemployment's social costs.

Fiscal Stimulus: HomeBuilder and Infrastructure

The Australian government implemented significant fiscal measures including the $90 billion JobKeeper Payment, enhanced JobSeeker unemployment benefits, the $2.5 billion HomeBuilder program, and accelerated infrastructure investments. These measures stimulated demand across the construction sector, directly creating and sustaining jobs.

Monetary Policy Support (RBA)

The Reserve Bank of Australia maintained a record low cash rate of 0.10% and engaged in quantitative easing to support economic recovery during the post-pandemic period of 2021–2022. Low interest rates reduced the cost of borrowing for businesses, encouraging investment and hiring. The combined effect of these policies was dramatic. These measures led to a decrease in the unemployment rate from 7.5% in July 2020 to around 4.2% by December 2022. By October 2022, unemployment reached historic lows of 3.4%

Workforce Australia (Replacement of jobactive)

Workforce Australia is the Australian Government's employment service that replaced jobactive from 4 July 2022. It has a range of services available to help all Australians find, keep, change jobs, or create their own job. Workforce Australia introduced a flexible Points Based Activation System, giving individuals flexibility and choice in deciding which tasks and activities they complete, recognising that there is no one-size-fits-all pathway to employment. This replaced the more rigid jobactive compliance model

Fee-Free TAFE

One of the Albanese Government's most significant supply-side policies has been expanding access to vocational training. Through the Fee-Free TAFE Skills Agreement, the Australian Government partnered with state and territory governments to deliver $1.5 billion for over 500,000 Free TAFE and vocational education and training places across Australia from 2023 to 2026, targeting national priority areas including aged care, childcare, healthcare, construction, and digital skills. Fee-Free TAFE started in January 2023 and exceeded expectations with more than 508,000 enrolments by mid-2024. Of all places, six in ten were taken up by women, and one in three were in regional and remote Australia. 170,000 young Australians, 124,000 job seekers, and 30,000 First Nations Australians enrolled in the program.The Free TAFE Bill 2024 was introduced to establish Free TAFE as an enduring feature of the national VET system, committing the Commonwealth to funding at least 100,000 Free TAFE places per year from 2027, targeted to industries experiencing workforce shortfalls including net zero, construction, care, defence, and digital sectors.

Secure Jobs, Better Pay Act (2022)

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 reformed the workplace relations system, putting gender equality and job security at the heart of the Fair Work system and updating the bargaining system to ensure all workers and businesses can negotiate in good faith. By promoting more secure employment and wage growth, this was intended to reduce frictional and structural unemployment driven by poor job quality and insecurity

Migration Policy — Addressing Skills Shortages

The government made important policy changes such as raising the Temporary Skilled Migration Income Threshold so that the skilled migration system better complements the skills of Australians. Attracting skilled migrants to fill acute shortages reduces bottlenecks that constrain broader economic growth and employment creation