Discussion about the future of the Morrison government’s $70 billion wage subsidy program heated up on Thursday morning amid renewed calls for the program to be extended for some, while the Prime Minister and the Treasurer fended off suggestions they would wind back the scheme further before September.
It comes after the federal government moved to wind back JobKeeper payments for about 120,000 childcare workers on Monday, spurring widespread concern other sectors could be dropped off the program before its scheduled end date on September 27.
New figures released by Treasury on Thursday reveal businesses across the country are still relying heavily on the program, particularly those located in tourism, hospitality and manufacturing hotspots.
The postcode-by-postcode analysis of JobKeeper usage found that Sydney (2000) and Melbourne (3000) had by far the most JobKeeper applications at 10,290 and 6693 respectively, while NSW’s manufacturing hub, covering Liverpool, Moorebank and Casula, had 3995 applications.
As ATO Commissioner Chris Jordan revealed on Tuesday, more than 844,000 businesses have so far received payments under the JobKeeper package, totalling more than $12.9 billion in subsidies.
The figures come after Prime Minister Scott Morrison ruled out any further expansion of JobKeeper yesterday, defending his decision to kick 120,000 childcare workers off the program in July.
”Where there is a better way to do things, we won’t step aside from doing them in a better way,” Morrison said.
Morrison said the government would look to replace JobKeeper measures — as it has done with $708 million in transition subsidies for childcare businesses — in an attempt to better target fiscal support.
The comments draw a line under the Coalition’s approach to the program, indicating that while the JobKeeper legislation will remain in place until September, the eligibility criteria could be varied substantially without any legislative changes.
This is because JobKeeper laws that were passed in April empower the Treasurer to make sweeping changes to who can access payments under the program by issuing a legislative instrument.
But speaking on 2GB radio on Thursday morning, Morrison moved to clarify his remarks, saying the childcare sector was a ”special case”.
”JobKeeper is there until the end of September,” Morrison said.
His comments come amid calls for the program to be maintained, particularly in industries like tourism where restrictions are still in place, with the Australian Tourism Industry Council (AITC) this week calling for the wage subsidy payments to be extended until international borders re-open.
On Thursday, federal MP Warren Entsch called for JobKeeper to be extended beyond September for the sector and said he was ”confident” the Prime Minister would heed his advice and expand the program.
Meanwhile, the Organisation for Economic Cooperation and Development (OECD) said yesterday in its most recent economic outlook report that Australia should consider extending its income support measures.
”Australia’s ample fiscal space permits a strong response to a second outbreak or if the recovery falters. In particular, some income support measures may need to be extended beyond their September expiry date,” OECD economists said.
Treasurer Josh Frydenberg and Finance Minister Mathias Cormann are expected to unveil changes to JobKeeper on July 23 (after the Eden-Monaro by election) alongside new economic modelling. Variations to the program are expected, including possible cuts to the quantum of the $1,500 fortnightly payments per eligible worker.
Asked whether the wage subsidy package would be extended in line with OECD advice on Thursday, Frydenberg said he did not want to pre-empt the outcome of the review.
The Australian Industry Group warned earlier this week that the expiration of JobKeeper, whenever it happens, will spell trouble for businesses, arguing the Fair Work Commission (FWC) shouldn’t increase the minimum wage in 2020.
”The next few months until September —and then the months after the direct support is withdrawn —will be a difficult period of high risk, uncertainty and anxiety for businesses and households alike,” the employer group said in an FWC submission.
”It is essential that actions or decisions that will add to this risk are avoided.”