Wage subsidies set to become tiered system

Matt Coughlan and Paul Osborne
(Australian Associated Press)

 

The JobKeeper wage subsidy will remain in place until September before being split into two tiers.

The Morrison government was due to announce details of the changes to the support on Thursday, but has brought forward the decision to Tuesday.

It is understood the new version of JobKeeper will mirror the part-time or full-time hours recipients worked before the coronavirus pandemic rather than a flat $1500 a fortnight.

The revamped scheme will mean businesses benefiting from the subsidy will get several months to adjust to the second phase.

The JobSeeker dole payment that was doubled to help the jobless get through the pandemic will remain as it is until September but then switch to a lower rate, but will be more than the former Newstart payment.

The government is also set to release details of a review of its coronavirus supports.

Prime Minister Scott Morrison says businesses would get several months to adjust to the next phase of support.

“It will be targeted, it will be temporary, it will be effective as the first round has been,” he said in Sydney.

“We do know this first round has been very important … (for) almost one million businesses, around 3.5 million employees, and there is still two months to go on the current set of arrangements.”

Treasurer Josh Frydenberg said the initial design of the program was based on getting money out as quickly as possible.

But he said one of the outcomes had been some people under the program received more money than they had been earning before the pandemic struck.

He said aviation, tourism, arts and hospitality were sectors that would need help beyond September.

Businesses will also face tighter eligibility tests, scrutinising changes in revenue.

Under the existing scheme, companies turning over less than $1 billion with a 30 per cent fall in revenue are eligible.

Firms turning over more than $1 billion must show a 50 per cent decline.

Businesses that met the revenue test at any stage during the pandemic qualified for the payments for each employee.

Labor frontbencher Tony Burke said JobKeeper needed to be better targeted through retesting businesses and tapering payments.

“There’s been a reasonable amount of waste and lack of targeting in how the government handled it first time around,” he told ABC radio.

But the opposition is refusing to nominate a set figure for JobKeeper or JobSeeker, which has been temporarily increased to $1100 a fortnight.

Mr Burke said the dole should not return to its old rate of $560 a fortnight.

“It needs to keep people out of poverty, $40 a day is not enough to live on,” he said.

Left-leaning think tank The Australia Institute has released modelling showing more than half a million Australians would be thrown into poverty if JobSeeker is returned to its former rate.

“This will not only have serious negative social effects for decades to come, but makes terrible economic policy by effectively withdrawing much-needed stimulus,” institute executive director Ben Oquist said.

Mr Morrison said government support packages had prevented people falling into poverty.

“It is still tough, it is extremely tough out there. But at a time like this, I think all Australians will be pleased they’re in Australia and nowhere else.”

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