Many will welcome the changes to the JobKeeper program, which will ultimately see the payment reduced by $500 a fortnight but continue until the end of March 2021. That extension will still deliver a program that is under budget compared to initial Treasury estimates, which were themselves revised following an embarrassing miscalculation that almost halved the spend, and only leave the Morrison government $86 billion in the hole – a resounding success given the degree to which JobKeeper has prevented the kind of economic damage that many predicted at the start of the crisis.
“JobKeeper is doing its job and will continue to do its job,” Prime Minister Scott Morrison told media. “It has been well targeted, it has been effective in stemming the loss of business closures and job losses, and it has saved businesses and it has saved livelihoods. That is the feedback that I’ve been getting direct as I’ve spoken to Australians – employees, employers – all around the country.”
But all eyes now turn to the JobSeeker coronavirus supplement, which will be halved from September – making the daily payment $57.9, according to AMP Capital chief economist Shane Oliver. JobSeeker will also once again be tied to employment services and job searches.
“We have always said that the JobKeeper and JobSeeker supplements were temporary measures, and I think Australians understand that,” Prime Minister Morrison said. “They know that our current scheme, which is burning cash – taxpayer cash – cannot go on forever.”
While the revision will allow recipients to earn $300 a fortnight before their payment is cut, there are many who believe the $850 provided by the government won’t be enough. That may be true. The increase will provide unemployed people just over $17 more a day than the Newstart Allowance, which was already considered paltry by several economists. And while it is fair to incentivise returning to the workforce by tying payments to job searches, there might not be much of a workforce to return to. Some projections estimate that there may be as many as 11 people looking for work for every one job, and the Treasurer himself notes that the effective unemployment rate is closer to 11.3 per cent when taking into account those who have left the workforce or are on zero hours. And despite the extension to JobKeeper, some companies will still fail.
The Morrison government has been lauded for its response to COVID-19, and rightfully so – but now that support is being unwound. The Australia Institute anticipates that changes to JobSeeker will see more than half a million Australians in poverty. While Mr Morrison suggested that JobSeeker could be extended, it is clear that the “Team Australia” moment is coming to an end, and hundreds of thousands of Australians will now feel the full force of the worst recession in a hundred years.
