At the moment, JobKeeper in its entirety, as a 12-month program, is expected to cost Australia $86 billion. Right now, it’s supporting around 3.5 million workers or 960,000 businesses, but come Christmas the number of employees on the payment is predicted to drop by 2.5 million.
According to the government, while some of these employees will end up on JobSeeker, a majority will see their jobs supported by viable businesses.
But as the initial joy around JobKeeper 2.0 starts to subside, businesses are wondering what the Australian economy will look like in a few months’ time and whether the scaled-down scheme will lend enough support to bruised businesses.
It wasn’t that long ago that Prime Minister Morrison presented a three-step path out of the coronavirus lockdown, predicting 850,000 jobs to be restored by the end of this month.
However, with a significant spike in COVID-19 cases in Victoria, that plan now looks slightly premature, with figures suggesting that Victoria’s return to lockdown is setting the economy back $1 billion a week.
It is precisely for this reason that many are now second-guessing the government’s forecasts and looking ahead to what our economic future may hold.
But the Prime Minister has now revealed that JobKeeper 2.0 does not reflect a belief that things are going to get a lot better by the end of the year; instead, the rates are based on one thing only: Australia’s inability to keep burning through money.
“It’s based on the assessment that you can’t keep burning $11 billion of cash every month,” Mr Morrison told 2GB radio on Wednesday.
Rehashing his message from May, Mr Morrison said that Australia needs to be weaned off income support.
“And that means we are phasing them back. We’re tapering them down. And that’s the assessment that was made by the Treasury, it’s an assessment that’s been made by the government,” the PM said.
“We always said that these were temporary payments. They were targeted payments for those businesses that are still enduring those drops in revenue. Then they’ll continue to get support.”
He revealed that many businesses, currently on JobKeeper, are topping up the $1,500 flat rate received from the government, which is a positive sign of recovery.
Touching on Thursday’s state-of-the-economy reveal, the Prime Minister hinted that the debt and deficit figures are eye-watering.
“This has been the single largest economic impact that the government has had to face since the Second World War,” the PM said.
The Treasurer also addressed Australia’s debt on Wednesday, noting that “it will be with us for some to come”.
“We have encountered a one-in-a-hundred-year event in the global coronavirus crisis and Australia is not immune, and many other countries around the world are seeing similar falls in their GDP or rises in their unemployment,” Josh Frydenberg told Sky News.
Thursday’s economic update is expected to show the true depth of Australia’s recession.