The federal government will fund a “further phase” of income support beyond September, as Victoria continues to grapple with a spike in coronavirus infections that’s forced the state to bring back its stage three lockdown measures.
In the Prime Minister’s most decisive comments yet about the future of the $70 billion JobKeeper program after its official expiry date on September 27, Scott Morrison said during a press conference on Wednesday that additional fiscal support would be announced.
“Where there is the need, there will continue to be the support,” Morrison said.
JobKeeper wage subsidies, alongside other support measures, such as legally-binding rent deferrals, are due to expire in September. This is driving concerns that many businesses will be dropped off a financial cliff and could struggle to recover.
These fears have compounded in recent days amid an uptick in coronavirus infections across Melbourne, culminating yesterday in the reinstatement of lockdown measures across the Melbourne metropolitan area.
Morrison said federal income support will continue to be delivered on a national basis, even past September, targeting businesses that continue to suffer declining revenue.
“These programs [JobKeeper and JobSeeker] act very much as automatic stabilisers in these circumstances and that’s the design element that will continue,” Morrison said.
“I think all Australians know that level of support can’t go on forever,” Morrison said.
“But the needs are continuing and we understand that. We have understood that for some time and we have been preparing our next phase on the basis of that understanding.”
Treasurer Josh Frydenberg and Finance Minister Mathias Cormann will hand down the results of a review into the JobKeeper scheme on July 23 and are expected to announce a raft of changes to the program.
It now appears increasingly likely this may include some type of extension for firms still under pressure due to the pandemic, but it’s not entirely clear what form that may take.
Other income support not related to wage subsidies remains a possibility, as the federal government considers how to best target the hardest hit industries, including retail, hospitality and tourism.
Treasury had already been considering varying JobKeeper eligibility tests to more closely monitor ongoing business performance, and paring back the level of payments to part-time and casual workers.
More to come…