There’s a telling line in the rules surrounding the federal government’s $70 billion JobKeeper wage subsidy that indicates the Treasurer reserves the right to make changes to the scheme.
It states: “An entitlement to JobKeeper payment under this part may be cancelled, revoked, terminated, varied or made subject to conditions by or under later legislation.”
The scheme, which has helped about 3.5 million workers via a $1500 fortnightly wage subsidy paid to businesses, was meant to operate for six months to the end of September.
But it is being reviewed by Treasury, and the results will be made public on July 23, when the government will provide an economic and fiscal update.
After the government announced that payments to workers in the childcare sector would end this month, Treasurer Josh Frydenberg has not ruled out that other businesses could face the same fate.
We will be looking to see how to strengthen and improve that program,” Mr Frydenberg told reporters on Tuesday.
ABC News spoke to economists who said it’s likely that a number of businesses would also see payments cut off early, while others could see extensions beyond September.
Treasury’s review comes as Australia’s economy reopens sooner than expected, after the rate of coronavirus infections and deaths in Australia fell short of initial projections.
There have been 102 coronavirus deaths in Australia to date, and the rate of active cases has been on the decline, allowing individuals and businesses in different states to steadily return to work.
Treasury secretary Steven Kennedy on Tuesday took responsibility for the $60 billion overestimation of the Morrison government’s JobKeeper scheme – the initial cost was estimated to be $130 billion.
He also told a Senate committee that, early on, it had been hard to gauge what measures were needed to contain the spread of the virus domestically.
But since the economy had done better than expected, Treasury now predicted unemployment would “be in the order” of 8 per cent.
“We have been steadily revising down our expectations of how high the unemployment rate will rise because of the fact that the health scenario has continued to improve,” Dr Kennedy told the committee.
Businesses could self-report to receive JobKeeper
Steven Hamilton is a tax economist and visiting fellow at the Tax and Transfer Policy Institute at the Australian National University.
He told ABC News the JobKeeper scheme should have never been in place for six months.
“It is very difficult to see the federal government paying all this money all the way through to September,” Dr Hamilton said.