Australia's jobs crisis: 20 JobSeekers apply for every role as campaigners warn a 'tsunami of horror' lies ahead as unemployment soars before Christmas

As many as 20 Australians are applying for each available job as campaigners warn of a Christmas crisis with unemployment set to rise.

The nation's unemployment rate ticked up to seven per cent in October and is expected to hit eight per cent by December as more people look for work after the Covid-19 recession.  

The government has extended the JobSeeker boost until 28 March but reduced the total rate from $815 to $715 a fortnight from December 31.

As many as 20 Australians are applying for each available job as campaigners warn of a Christmas crisis with unemployment set to rise. Pictured: A waitress at Sydney's Opera Bar

Campaigners say the rate - which was doubled to $1,115 from March to September - needs to be raised to prevent a Christmas crisis among the poorest Australians.  

Terese Edwards of the National Council of Single Mothers and their Children said: 'I'm deeply concerned about the increase of suicide, homelessness and domestic violence.

'Christmas is already a frightening time for too many. Add a pandemic, throw in the cuts to income and we have a tsunami of horror ahead of us.'

Prime Minister Scott Morrison has said the JobSeeker rate needs to be reduced to incentivise people to apply for more jobs.

But economists on Wednesday said there was no evidence the payment was holding back the labor market. 

Professor Peter Whiteford, a social policy expert at the Australian National University, told a senate committee on Community Affairs that the average number of applicants per job could be as high as 20.

The nation's unemployment rate ticked up to seven per cent in October. Pictured: Construction workers

He said Australia's unemployment payments were much lower than working incomes compared to other developed countries.

'There's a very large gap between what people receive on payments and what they would receive in paid work,' Professor Whiteford said.

'There's no reason to think this is necessary in order to incentivise people to actively look for work.'

University of Melbourne Professor Jeff Borland said the job vacancy rate had not showed any signs people were avoiding work to stay on welfare.

'I don't see any evidence that the Covid-19 supplement has been a substantial or really any type of major disincentive for people to move into work from unemployment,' he told the committee on Wednesday.

Professor Borland said some employers always report difficulty recruiting.

'To think the Covid-19 supplement was having a major disincentive effect, you would want to be looking at Australia-wide systematic evidence that showed up in the aggregate data,' he said.

'That's what I've been looking at and I don't see effects there.'   

Both leading academics believe unemployment payments should not return to the pre-pandemic rate of $565 a fortnight.

Australian Retailers Association chief Paul Zahra backed extending JobSeeker to March and called for a permanent increase beyond that.

'It doesn't make sense to return people who do not work to the poverty line,' he said.

The government hailed the positive jobs news as proof the economy was recovering well from the Covid-19 recession

He said JobSeeker had boosted the economy as welfare recipients spent 58 per cent of their payments on consumer goods.

Labor is calling for a permanent increase to JobSeeker but has not set a target rate. 

Despite the rise in unemployment in October, some 178,800 Aussies got jobs, including 81,000 Victorians who were locked in their homes for three months due to a second wave of coronavirus. 

The participation rate, which measures those in work and people actively seeking a job, rose to 65.8 per cent from 64.9 per cent previously. 

The government hailed the news as proof the economy was recovering well from the Covid-19 recession. 

'Today's job numbers confirm that Australia's economic recovery is gaining momentum,' Treasurer Josh Frydenberg told reporters in Melbourne last week.

'There is a light at the end of the tunnel.'   

Full-time employment increased by 97,000, while part-time employment rose by 81,800, Australian Bureau of Statistics data released last Thursday shows. 

With AAP