Arts, Education, and Hospitality first in line for JobKeeper

More than 838,000 applications have been submitted for the Federal Government’s JobKeeper program, and early data suggests the money will flow to the businesses and workers that need it most.

One of the sectors hardest hit by the downturn – Arts and Recreational Services – leads the pack. Other hard-hit industries, including Education and Training, and Accommodation and Food Services, also have a high JobKeeper participation rate (see Chart 1).

The entire Arts and Recreational Services sector appears to be participating in the scheme. Participation can exceed 100 per cent of business count in the sector for two reasons. First classification differences between two data sources and second because eligible related individuals can lodge a JobKeeker claim. So some businesses qualify for more than one application.

In contrast, fewer than 1 in 10 employers in Agriculture and Financial Services industries – sectors that have felt less of an impact to date – have indicated they will apply.

Yesterday (Monday 20 April), published new data on registrations for the JobKeeper payment, showing the breakdown of applications by industry.

At first blush the data looked surprising. The biggest share of applications was from employers in the Professional, Scientific, and Technical Services industry. By contrast, Accommodation and Food Services, and Arts and Recreation, accounted for a much smaller share of expressions of interest. This led to worries that the program may not deliver for the sectors that need it most.

While JobKeeper is not without gaps, part of the problem here was a misinterpretation of the data. Some large sectors make up a large share of JobKeeper applications simply because there are more businesses. Adjusting the data for the number of firms in each sector gives a much better reading of JobKeeper’s capacity to reach hard-hit industries and workers.

A look at applications as a share of businesses in each sector – noting that there may be some classification differences between the JobKeeper and ABS data – shows that most employers in hard-hit sectors have expressed an interest in receiving the payment.

We will know more in coming months, when the Australian Tax Office releases data on successful applications for JobKeeper. But for now, it appears the program will hit its targets.

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