Millions off JobKeeper as Frydenberg signals economic recovery is taking shape

More than 2 million workers have left the $101.3 billion JobKeeper scheme since the federal government reduced the wage subsidy at the end of September in a sign of economic recovery as fewer employers rely on the extraordinary assistance.

As Parliament resumes for crucial votes on welfare rules and unemployment benefits, the government will claim the economic rebound is "well under way" as the number of JobKeeper recipients falls from 3.6 million to 1.5 million in less than two months.

Data shows the number of people relying on government welfare in recent months has dropped. Credit:Kate Geraghty

The preliminary figures, to be made public on Monday, compare with a forecast in the October 6 federal budget that 2.2 million workers would still need the subsidy at the end of this year because of a slow recovery from the recession.

Treasurer Josh Frydenberg will publish the figures with an estimate that the "effective unemployment rate" has fallen from 9.3 per cent in September to 7.4 per cent in October, counting those without work as well as those who still have jobs but are not working any hours.

Mr Frydenberg's office estimates the effective unemployment rate to be 10.5 per cent in Victoria, down from 14 per cent in September and ahead of the grim estimates for the state when shutdowns were imposed to stop a second wave of coronavirus infections.

"While there is still a long road ahead, these are promising signs that our economic recovery is well under way," Mr Frydenberg said in a statement.

The JobKeeper supplement fell from $1500 to $1200 a fortnight at the end of September and is due to fall to $1000 from January to March, when the scheme is scheduled to end.

The figures come as the government seeks Labor's support in Parliament to extend the coronavirus supplement paid to the unemployed and others on income support, reigniting a debate over a permanent increase in the JobSeeker base rate of $565 a fortnight.

Social Services Minister Anne Ruston needs Senate support for a bill to allow her to extend the coronavirus supplement to March at $150 a fortnight, down from the $250 rate during the December quarter.

Labor social services spokeswoman Linda Burney has called for a permanent boost to the JobSeeker rate, arguing there are not enough jobs for those looking for work.



While Labor is expected to back the bill to extend the supplement, it is seeking a debate next year on a separate bill to decide the JobSeeker rate.

Labor is set to oppose another government bill to be debated this fortnight to extend the use of cashless debit cards for welfare recipients in trial sites including Ceduna in South Australia and Bundaberg in Queensland.

Senator Ruston has opened talks with Senate crossbenchers to back the changes, with Pauline Hanson's One Nation signalling her party's support and Centre Alliance's Stirling Griff open to supporting an extension of two years.

The government expects this could be enough to pass the bill, although it is also seeking support from Tasmanian independent Jacqui Lambie and South Australian independent Rex Patrick to extend the debit card projects without a two-year limit.

In a crowded fortnight for new legislation, Mr Frydenberg requires Senate approval for tougher rules for foreign investment, due to take effect on January 1 and expected to gain Labor support.

A separate foreign relations bill, to allow the federal government to veto state and university agreements with foreign governments, is also expected to pass with Labor support.

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