JobKeeper changes to cost Australia $15 billion

Newstalk ZB /,
Publish Date
Fri, 7 Aug 2020, 12:58PM
Australia's prime minister Scott Morrison. Photo / Getty Images

JobKeeper changes to cost Australia $15 billion

Newstalk ZB /,
Publish Date
Fri, 7 Aug 2020, 12:58PM

Big changes to Australia’s JobKeeper scheme will be announced on Friday in the wake of the “Victorian wave” of COVID-19 cases that is expected to cost taxpayers an extra $15 billion.

And while the overhaul is largely designed to help Melburnians who face the loss of up to 400,000 jobs, the changes to the turnover test and employee eligibility will apply to all companies across Australia.

The stunning national cost of the state’s bungled hotel quarantine program and coronavirus tracing dramas will be outlined by the Prime Minister Scott Morrison and Treasurer Josh Frydenberg.

The new rules will help thousands of Melbourne businesses to qualify for the scheme with the Treasury predicting 1.5 million Victorian workers will soon be forced to rely on the scheme to survive.

“The introduction of stage four restrictions by the Victorian Government will have a severe economic impact on the Victorian and Australian economy,’’ Treasurer Josh Frydenberg said.

“Under the changes that will apply nationwide, to be eligible for JobKeeper post 28 September, organisations will only have to demonstrate that their actual turnovers have significantly declined in the previous quarter.

“As a result, organisations that are able to demonstrate a significant decline in turnover in the September 2020 quarter will be able to access the JobKeeper extension in the December 2020 quarter.

“They will no longer be required to have also suffered a significant decline in the June quarter in order to remain eligible or access the payment for the first time post 28 September.”

New rules on the turnover test announced just weeks ago on July 21 will be scrapped and superseded by the JobKeeper 3.0 scheme.

However, the reduction in the $1500 a fortnight wage subsidy to $1200 from October will remain in force as previously announced.

Thousands of new full-time employees will also be eligible for the wage subsidy across Australia for the first time, with the Morrison Government allowing any eligible workers employed on July 1 to apply for the wage subsidy.

Previously, workers needed to be employed on March 1, 2020 to be eligible under the scheme but the requirements that casuals be employed for a minimum of 12 months to be eligible will remain.

Instead of being forced to prove a company’s turnover is down by 30 per cent or more in the June and September quarters, the new rules will only require proof that income is down in the September quarter compared to the same time last year.

Previously, companies had been told they needed to demonstrate a fall in turnover in the June, September and December quarters to qualify for JobKeeper from 4 January.

The turnover test changes will also allow thousands more businesses to qualify for JobKeeper for the first time or keep the payments for longer than expected.

Those changes will cost taxpayers an extra $11 billion while the number of new businesses in Victoria that will be forced onto the scheme in Melbourne will cost an extra $4 billion.

More employees will also qualify for the wage subsidy scheme if they were recently employed on a full-time basis.

“We also recognise that businesses have experienced employee turnover since JobKeeper was originally introduced,’’ Mr Frydenberg said.

“To allow more employees to access the payment, we will now allow employees who were on the books from 1 July 2020 to access JobKeeper.”

Treasury advice is that as a result of the changes to Jobkeeper, a further 530,000 Victorians are expected to get the wage subsidies in the September quarter.

That means JobKeeper will soon support the jobs of 1.5 million Victorians and in the March quarter, 60 per cent of all workers on the wage subsidy will be from Melbourne.

The Prime Minister confirmed this week that Victoria’s COVID-19 mess will cost the economy $12 billion in reduced GDP. The cost of the JobKeeper changes to the federal budget however will be $15 billion.

The Victorian virus crisis will be the major subject of discussion at Friday’s meeting of the national cabinet that will also consider the aged care crisis engulfing the state with multiple outbreaks at nursing homes.

Prime Minister Scott Morrison said the “Victorian wave” of the coronavirus was a burden that will be shared by all Australians.

“We’re doing whatever it takes to save lives and save livelihoods,’’ he said.

“Australia is facing a situation that is constantly changing. Our response is to get the right support to all those Australian families, workers and businesses that need us, as these circumstances change.

“This means more support for more workers and more businesses for longer, as we battle this latest Victorian wave.”