JobKeeper has been extended beyond September, with payments to be reduced and become two-tiered.
Speaking to the press today, Prime Minister Scott Morrison said changes to the program, which would see the fortnightly payment of $1,500 reduced to $1,200 for full-time workers, would take effect at the end of September.
For those working fewer than 20 hours per week, the government subsidised payment will be reduced to $750 per fortnight, Morrison said.
However, the program will be further reduced again for the March quarter of 2021 to $1,000 per fortnight, and $650 for part-time workers.
Eligibility for the JobKeeper payment beyond September, when the current scheme expires, will require businesses to prove whether they have experienced the requisite reduction in turnover across the June and September quarters.
Previously, eligibility for the program was a prospective test, based on whether businesses expected to experience the requisite reduction in turnover.
However, when asked whether industries like aviation or entertainment would receive payments beyond March 2021, the Prime Minister said it was “premature” to suggest the program would be further extended, given that we’re only “three months into a 12-month program”.
Treasurer Josh Frydenberg said the cost of extending the JobKeeper program at the new reduced rate through to March would amount to $16 billion, adding that the two-tiered payment system would mean people were receiving a payment closer to their actual pre-COVID-19 income.
“It was a conscious decision to introduce the flat $1,500 payment as it enabled us to get money to people who needed it most as fast as possible,” he said.
“However, one of the consequences of the flat payment equivalent to minimum wage was that some recipients were receiving more under JobKeeper than they were pre-COVID. The two-tiered payment better reflects the pre-COVID income of these recipients.”
Morrison defended JobKeeper from criticism that the scheme had overpaid casual workers who received more income during the pandemic than they did before it – criticism the Treasure said does not take into account any income they may have lost through losing a second job.
“JobSeeker and JobKeeper are not do-nothing payments,” Morrison said.
“I have pilots working stop-go signs, and they’re being connected to their employer. They’ll fly again one day.
“But they’re seeing JobKeeper as a very helpful income support that keeps them connected to their business but at the same time doesn’t prevent them from going and doing other work out there.”
JobSeeker reduced, but income-free area increased
Morrison also confirmed the JobSeeker payment is set to drop from $550 to $250 per fortnight as of September, with those benefiting from the program to be required to connect with employment services and take part in job searches from 4 August.
However, the government is increasing the income-free area that is available to those who are on JobSeeker to $300.
“That means you can earn $300 without it affecting any of your JobSeeker payments,” Morrison said.
“We’re adjusting the COVID supplement down to $250.
“So that means you can earn 300 where you may have been getting $550 before, you can earn $300 and then there’s the $250 supplement that will come through the COVID Supplement and that will run out till the end of this year.”
His comments came as Treasurer Josh Frydenberg revealed Australia’s unemployment rate effectively sits at 11.3 per cent.
“Now, the official unemployment rate stands at 7.4 per cent,” Frydenberg said.
“But the effective rate is at 11.3 per cent when you take into account those who have left the workforce or those who are on zero hours. As we stand here today, five million Victorians are in lockdown.
“It’s against the backdrop of that very difficult and challenging economic environment that we are announcing the extension of JobKeeper. JobKeeper 2.0, together with the extension of the coronavirus JobSeeker supplement, will assist Australians right around the country.”
A further announcement on the state of the economy will be summarised in the federal government’s economic statement on Thursday.
Tourism industry welcomes JobKeeper extension
The announcement of JobKeeper’s extension comes off the back of prolonged calls from the tourism industry for it to continue until at least the opening of international borders.
Among the loudest voices were the Australian Federation of Travel Agents, Tourism & Transport Forum (TTF), and Australian Tourism Industry Council (ATIC), which welcomed the news as a lifeline for Australia’s tourism industry.
TTF chief executive Margy Osmond said today’s announcement “gives our industry critical breathing space”.
“JobKeeper 2.0 will help to save thousands more tourism employees from the unemployment queue and keep them in jobs so that when we eventually come out the other side of COVID-19, we will be ready to move swiftly into the recovery phase,” she said.
ATIC executive director Simon Westaway said JobKeeper’s retention was “an absolute priority” for the industry.
“JobKeeper 2.0’s six-month extension provides certainty to keep tourism business doors open because most still await visitor recovery,” he said.
Tourism Accommodation Australia chief executive Michael Johnson said the extension of the JobKeeper program would save Australian accommodation businesses.
“The announcement by the government today will go a long way towards saving businesses and keeping our staff in jobs after September. We thank the Prime Minister and Treasurer,” Johnson said.
“It is good to see the government acknowledge sectors like ours are suffering more than others and will continue to suffer into the future.”
“With international travel uncertain for at least 12 months domestic tourism will be our only way out. But until travel between all states and territories is possible, continuing JobKeeper is the only way to keep the sector viable.”
However, one representative body critical of the scheme is the Transport Workers’ Union (TWU), which said the federal government had refused to recognise the “particular difficulties the aviation industry faces”.
“We welcome the Prime Minister’s announcement to extend JobKeeper and are glad that he has listened to workers on this. But this announcement confirms that the federal government is happy for aviation to collapse and with it thousands of jobs,” TWU national secretary Michael Kaine said.
“The announcement to cut payments and that thousands of aviation workers will again miss out on JobKeeper shows how Scott Morrison is failing to understand the serious situation aviation is in.
“Aviation workers need adequate support and a commitment from the government that it will stand by their industry.”
Featured image source: 9News.com.au