Josh Frydenberg's confirmation that JobKeeper and JobSeeker would continue, albeit in modified form, after September will come as a great relief to millions of Australians.
The two payments have played a vital role in keeping food on tables and roofs over people's heads for the better part of four months. They, along with initiatives such as the small and medium enterprise guarantee scheme which is also being extended, have contributed much to Australia's relatively strong economic performance. While the country has taken a massive hit, it is travelling well compared to many other nations.
It is unfortunate however the government's decision to flag its intentions on JobSeeker and JobKeeper early was almost certainly influenced by the disastrous reports coming out of Victoria. At the very time when many people were hoping for clear signs of a economic turnaround a quarter of the national economy has just been put back into lockdown. That has more than offset the small upkick in jobs for women and young people in the June employment figures.
In addition to the millions dependent on JobKeeper, at least two million people are now dependent on JobSeeker, the turbocharged version of the old "$40 a day" Newstart Allowance. According to the Australia Institute if JobSeeker was allowed to revert to the old level at least 650,000 people would be pushed into poverty. While it is unlikely JobSeeker will be kept at the new level indefinitely, the reality is that nobody is expecting major cuts any time soon.
Both the PM and the Treasurer are correct when they say it is neither desirable, or even possible, for taxpayers to support businesses indefinitely. This means one of the likely goals of the revamped JobKeeper scheme will be to winnow the wheat from the chaff.
While viable businesses, that can demonstrate they still meet the reduced turnover targets, will almost certainly get "targeted" assistance, those that only exist on paper to pass on payments to employees who are, to all intents and purposes, unemployed, will likely find themselves being treated very differently. The government has to cut its suit to fit the cloth. Otherwise it may do more harm than good.
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