Government urged to provide more support beyond JobKeeper end date

Deloitte is urging the federal government to provide more economic support beyond the legislated end dates for JobKeeper and the enhanced JobSeeker payments.

The federal government's coronavirus supplement will be cut by $300 from 25 September.

The federal government's coronavirus supplement will be cut by $300 from 25 September. Source: AAP

So far we've had JobSeeker, JobKeeper and JobBuilder to try to support Australians during the worst economic downturn since the Great Depression.

So what next? A "JobTweaker" perhaps.

Economist Chris Richardson said, like the Reserve Bank, the economy will require considerable government support for quite some time to come.

"More dollars are needed," Mr Richardson said, a partner at consultants Deloitte Access Economics.

"How much more depends on our success against the virus and in opening up," he said.
He said some sort of wage subsidy like JobKeeper will be needed that is limited to a smaller range of businesses - such as those tied to international borders - and the size of the benefit may need to be smaller, and labelled it a JobTweaker.

In his quarterly Business Outlook released on Monday, Mr Richardson also argued for the retention of the JobSeeker dole benefit "stronger for longer" as an emergency safety net to fill the cracks in the economy caused by the coronavirus pandemic.

The Australian Treasury has reviewed both the JobKeeper and enhanced JobSeeker payments, which were due to end in September.

But the Morrison government has been keeping its findings under wraps with Treasurer Josh Frydenberg to hand down a much-awaited economic and fiscal update on July 23.
Opposition Treasurer Jim Chalmers.
Opposition Treasurer Jim Chalmers. Source: AAP
The Opposition's treasury spokesman Jim Chalmers said millions of workers and thousands of businesses were anxious about being left behind in Australia's first recession in three decades.

"The Morrison government's failure to take workers and employers into their confidence about their secret plans for after September has created too much uncertainty and seen businesses shed jobs and push more workers into jobless queues," Dr Chalmers told AAP.

Mr Richardson said Australia's relative success in the fight against the virus gives it more room to open up the economy.

"Our policies have successfully protected many jobs and businesses that would otherwise have been lost," he said.

He said many of Australia's key trading partners have also battled the virus well, while it looks like being a "corker of a year" for farmers too.
"So the recession may well have already past its worst," he said.

"Even so, families are struggling with the toxic trio of high debt, high unemployment, and low confidence," he said.

"The ranks of the unemployed will be badly swollen for a while."

Deloitte has anticipated the unemployment rate to be 8.2 per cent for the 2020/21 financial year, the equivalent of over 1.1 million people being out of work.

The jobless rate was 7.1 per cent in May this year, leaping from 5.2 per cent in a matter of months, and Deloitte did not expect the rate to return to pre-COVID-19 levels until 2023/24.


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3 min read
Published 6 July 2020 6:46am
Updated 6 July 2020 7:52am



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