JobKeeper changes: What we know about the ‘second phase’ of wage subsidies

JobKeeper

Treasurer Josh Frydenberg and Finance Minister Mathias Cormann. Source: AAP Image/Lukas Coch.

The Morrison government is preparing to unveil the second phase of its $70 billion JobKeeper wage-subsidy program, after removing any doubt over the weekend that the scheme would be axed at the end of September.

Finance Minister Mathias Cormann told Sky News on Sunday there would be “adjustments” to the JobKeeper scheme to better target struggling businesses.

“Once we get to the end of September it will be a matter of making sure that any ongoing support is appropriately targeted to those businesses who genuinely need it,” he said.

The comments come after weeks of uncertainty about the future of the income-support package, with federal cabinet members, including Cormann, teetering back and forth between indicating JobKeeper would be extended or that it would be effectively axed, at least in its “current form”.

It appears the federal government has landed on the widely expected course of action; to pare back the program but maintain the subsidies for businesses that can continually prove they’re still disrupted by the COVID-19 pandemic.

Later this week, Cormann and Treasurer Josh Frydenberg will hand down the results of a review into JobKeeper and will announce various changes to the program, including, as news.com.au reported over the weekend, a lower base rate of $1,000 per fortnight for each eligible worker.

It comes as sole traders continue to complain about the administration of the existing JobKeeper scheme, with thousands receiving emails in recent weeks notifying them that their applications were being reviewed and, in some cases, losing access to payments temporarily.

Businesses are likely to face tougher eligibility guidelines under the revised scheme, with more frequent revenue-test hurdles, but the government hopes the pared-back support will see SMEs avoid a feared financial cliff in September, with other measures like rent deferrals and insolvency protections also set to expire.

Analysis of federal government and Australian Bureau of Statistics (ABS) figures, published by Deloitte Access Economics on Monday, found some 240,000 businesses are at “high risk” of failure if they lose access to JobKeeper in September.

The figures suggest that for some businesses — particularly those in the hospitality, professional services and transport industries — there will be a steep rise in hardship and bad debts even amid the extension of income support.

Nevertheless, certainty over the future of JobKeeper past September will be welcomed by business lobbyists and advocates, who have been calling for the federal government to step up its commitment in recent weeks.

It comes against the backdrop of a second wave of coronavirus infections in Victoria, which has seen authorities ratchet up trading restrictions across the state, and growing fears that NSW may need to pursue a similar course of action, amid a spike in new COVID-19 cases there.

NOW READ: “Heartbreaking”: Melbourne businesses losing hope in the face of second COVID-19 lockdown

NOW READ: More than 150,000 businesses in JobKeeper limbo as ATO admits to “reporting error” and exposes $60 billion windfall

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