News

JobKeeper to extend beyond September for those who “genuinely need it”

The Minister of Finance Mathias Cormann has announced that JobKeeper payments will continue past the original cut off date in September.

The JobKeeper payment was introduced by the federal government as a response to the Coronavirus pandemic, effectively doubling the JobSeeker payment. However, moving forward, the supplement is set to evolve beyond a flat payment to target businesses that “genuinely need it”.

finance, minister, covid-19, pandemic

JobKeeper payments are set to continue past September focusing on businesses that “genuinely need it” in an effort to return Australia to a “new normal”.

“There will be some adjustments to the [jobkeeper] scheme, to make sure it is appropriate for the next phase,” the finance minister commented on the decision. “The ultimate objective still has to be getting back into a situation where all businesses are in a position to pay for the wages of their employees out of their income.”

Currently, the JobKeeper payment exists as a $1500 fortnightly flat rate for everyone, resulting in part-time workers earning more than their actual wage. Beyond September, the government will provide businesses with subsidies based on their needs and tiers amounts will be given for different people.

“When we first designed the scheme back in March, speed was of the essence, simplicity was of the essence,” Cormann said. “We needed to get the support out into the community, into the economy as swiftly as we could so we accepted the fact that the single payment would result in some people getting more than they otherwise would have under their normal working arrangements.”

Treasurer Josh Frydenburg is set to present an economic and fiscal update this Thursday, which will include the Treasury’s review of the JobKeeper wage subsidy and the increased JobSeeker payment.

“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.” The Treasurer said.

The Australian Institue thinktank has released a new study showing that the JobKeeper supplement lifted over 425,000 people out of poverty. The research also stated that removing the JobSeeker payment would push more than 650,000 Australians—including 120,000 children under the age of 14—into poverty.

Economic modelling suggests that over half a million Australians will return to poverty if the JobSeeker payment returns to its pre-COVID-19 amount of $40 per day.

The Australia Institute’s paper recorded that 3.7 million Australians were living in poverty before the coronavirus pandemic, and “by increasing one payment” the number drastically decreased to 3.3 million.

Ben Oquist, the director of the Australia Institute stated, “The coronavirus supplement has been an essential part of our nation’s response to this recession and has improved the lives of nearly half a million Australians, in fact, no other government has ever lifted so many people out of poverty so quickly.”

The government will use an economic statement this week to move Australia sequentially into a “new normal”.