On 28 March 2021, the temporary emergency support program JobKeeper came to an end.
JobKeeper was an economic lifeline which helped keep around one million businesses operating and 3.8 million Australians in a job at the height of the pandemic. The Reserve Bank of Australia estimated that JobKeeper saved at least 700,000 jobs.
“When JobKeeper was announced on 30 March 2020, Australia was standing on the edge of an economic abyss,” says Josh Frydenberg, Federal Treasurer and Deputy Leader of the Liberal Party, in a media release.
“It has achieved its objectives of supporting businesses and saving jobs, preserving employment relationships and delivering much needed income support across the economy.”
Following the announcement of JobKeeper, consumer confidence recorded its largest weekly gain on record and went on to increase for nine consecutive weeks.
On 21 July 2020, the Morrison Government extended the temporary JobKeeper payment for an additional six months from September until March with two tiers of payment to account for full and part time workers.
As of the end of February, Australian Taxation Office data indicates around 680,000 businesses employing 2.8 million people have graduated from JobKeeper, with the unemployment rate today at 5.8 per cent.
“While JobKeeper comes to an end, the Government’s economic support does not, with around $100 billion of our $251 billion in unprecedented economic support still to flow,” Frydenberg says.
“As we move to the next stage of the Government’s Economic Recovery Plan, private sector activity will continue to be boosted through a number measures including tax cuts, unprecedented business investment incentives, more skills and training places, new infrastructure projects and targeted support like the $1.2 billion aviation and tourism package.”
Treasury says the JobKeeper program must come to an end as the economy strengthens.
“To do otherwise would be counterproductive for the Australian economy, as the continued operation of the program would hamper labour mobility and people moving to more productive roles in the labour market,” Frydenberg says.
“Having outperformed all major advanced economies on the economic front in the last 12 months there is no other country you would rather be in than Australia.”
However, some have called for continued JobKeeper-type schemes to support industries hit hardest by the COVID-19 pandemic, lockdowns, and border closures, including tourism and hospitality. In January, Queensland Premier Annastacia Palaszczuk called on the Federal Government to consider extending JobKeeper for the industries “doing it tough”.
“JobKeeper has been a lifeline for more than 200,000 Queensland businesses. It would be a mistake to take it away completely before international borders are able to safely reopen,” she said on Twitter.
“Regions such as Cairns, the Whitsundays, and the Gold Coast that rely on tourism will be worst hit.”
According to data from the ATO, more than 1.5 million workers were receiving JobKeeper payments at the end of 2020. Australia Institute analysis found that jobs in accommodation and food service fell 11.2 per cent from February to November 2020 and 31.4 per cent of jobs were lost from February to May.
The Senate estimates that Treasury believes the scrapping of JobKeeper will result in 100,000 to 150,000 jobs being lost in Australia.
“It is staggering to believe the government would even consider implementing a policy change that would cost up to 150,000 people their jobs, especially in the middle of a recession,” says Dr. Richard Denniss, Chief Economist at the Australia Institute.
“There is no doubt that a big boost in government spending last year helped prop up the economy and keep unemployment down, and Treasury’s advice today makes clear big cuts in government spending will drive economic growth down and unemployment up. For a government that says it’s all about ‘jobs, jobs, jobs’ it is inconceivable they would pursue such a policy.”
The Federal Government rejected calls from Restaurant & Catering Australia to launch a “HospoKeeper” wage subsidy following the end of JobKeeper.
Once a business is no longer claiming JobKeeper Payments, it may start to be eligible to receive the JobMaker Hiring Credit for any additional employees that started employment with the business after 7 October 2020. For more information, click HERE.
