Australian taxpayers have spent nearly $55 billion so far on the JobKeeper program during the coronavirus pandemic as the Federal Government prepares to reduce payments from September 29.
While the national unemployment rate fell to 6.8 per cent in August, millions of Australians remain dependent on the JobKeeper safety net.
A total of 3.6 million Australian employees and businesses have been nominated for a JobKeeper payment since the scheme began.
Despite Melbourne being in some form of lockdown since July, Victorian businesses have not been the biggest recipients of the wage subsidy. Instead, New South Wales topped the list with $18.65 billion received up until September 14, while Victoria was second with $16.31 billion.
While Victoria has not been the biggest recipient of JobKeeper so far, Treasury forecast that there will soon be more Victorians on the wage subsidy than from all the other states and territories combined.
Treasurer Josh Frydenberg says the unprecedented level of support for Australians totals$314 billion so far.
“The Government recently announced an extension and expansion of the Jobkeeper program for another six months and made it easier for organisations to qualify from 28 September 2020,” he said.
“The payment will be tapered in the December and March quarters as businesses adjust to the new environment, supporting a gradual transition to economic recovery while ensuring those businesses who most need support continue to receive it.”
The decision to reduce JobKeeper has concerned economists and social groups, alike with the McKell Institute warning cutting payments will strip almost $10 billion from the economy before Christmas.
Earlier this week, the institute forecast 1.05 million part-time workers would have their $1500 fortnightly JobKeeper payments reduced to $750 from September 29. Another 2.4 million full-time workers would have their payments cut to $1200.
Treasury also expects the number of people on JobKeeper subsidies to fall next week when some companies “graduate” from the scheme because their turnovers have improved.
Department officials also predict an uptick in the number of JobSeeker recipients.
This is because the JobKeeper scheme is being split in two, separating full-time from part-time workers.
Some part-time workers will then be able to apply for both JobSeeker and JobKeeper payments.
The job market remains tough
Australia’s jobless rate unexpectedly fell to 6.8 per cent in August, bucking widespread predictions of a slight rise.
Roughly 111,000 people gained employment in August, the third month of exceptionally strong results. Over half the massive jobs losses in April and May have been recovered.
However such strength masked a 42,400 drop in employment numbers in Victoria, where restrictions remain.
Mr Frydenberg, a Victorian MP, said businesses in the state were still hard hit by lockdowns.
“I’m hoping and the Prime Minister is hoping those restrictions can be eased as quickly as it is COVID-safe to do so,” he said.
“Once that happens more business will reopen, more people will get back to work and that will be good news for the overall economy.”
Australian Industry Group chief executive Innes Willox said that while the latest job figures were promising, he expected the next six months to be tough as people wean their businesses off JobKeeper wage subsidies.
“So we might be in for a rough ride here,” Mr Willox said.
“People do have to start trying to find their way back into the workforce, employers need to start to be able to find ways to employ again.”
Fury over JobKeeper eligibility
On Friday, it was revealed staff employed by an elite American university are receiving JobKeeper while Australian institutions miss out.
Public university staff blame thousands of job losses on the Morrison government’s decision to exclude them from the JobKeeper scheme.
They are furious that the New York University’s Sydney campus qualifies for the payments.
National Tertiary Education Union president Alison Barnes said Australian public universities had already slashed more than 11,000 jobs and more cuts were on the way.
“The Morrison government changed the rules three times to prevent these universities from accessing JobKeeper,” Dr Barnes said on Friday.
“Yet four private universities in Australia and even the Sydney campus of New York University, have been able to access JobKeeper.
“How can the government allow this to happen? The higher education sector is being decimated daily. Most of these job losses could have been prevented if universities were able to access JobKeeper.”
To qualify for the payments, a university must demonstrate a 30 per cent revenue decline, or 50 per cent decline if their turnover is more than $1 billion.