More than two million workers have left the JobKeeper wage subsidy scheme since the Morrison government tightened eligibility and reduced payment rates at the end of September.
The number of JobKeeper recipients has fallen from 3.6 million to 1.5 million in less than two months, outperforming predictions in the federal budget.
Treasurer Josh Frydenberg said fewer businesses relying on the payments showed the economy was bouncing back faster than expected.
Treasurer Josh Frydenberg says the numbers indicate the Australian economy is regaining some momentum Source: AAP
"These economic figures build on other important and positive data that we've seen in recent weeks 178,000 new jobs that were created last month.
"The effective unemployment rate coming down from 9.3 to 7.4 per cent," he told reporters in Canberra.
Labor Treasury spokesperson Jim Chalmers said the government was falling over itself trying to claim credit for a recovery in the economy.
"But every serious economist knows, when we've had a recession as deep and as damaging as Australia has, that of course the economy will recover," he told reporters in Canberra.
Dr Chalmers said the new JobKeeper numbers were welcome but entirely unsurprising, given the easing of business restrictions and tighter eligibility requirements.
He said for many Australians, what looked like a recovery on paper would still feel like a recession, and looming cuts to the wage subsidies would still hurt 1.5 million workers.
The JobKeeper wage subsidy 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 latest tax office numbers come as federal politicians prepare to vote on various welfare rules and unemployment benefits.
The government wants to cut coronavirus supplements to $150 a fortnight and extend the welfare payments until March.
Labor would prefer to lock in a permanent increase to the base rate of JobSeeker dole payments.
"The government could deliver certainty for out-of-work Australians and local and small businesses by permanently increasing unemployment support," Labor social services spokeswoman Linda Burney told AAP.
The opposition is also against tightening the screws on welfare applicants with assets and cash savings.
