JobKeeper errors create room for program revisions

"The revision by Treasury and the ATO today of their estimates of the number of employees covered by JobKeeper and the costs of the program create opportunities to amend the scheme and further help the economy which remains in a deep downturn," Innes Willox, Chief Executive of the national employer association Ai Group said today.

"While the lower coverage of the JobKeeper program could be due to the economy not deteriorating as severely as was anticipated when the program was developed, in today’s announcement Treasury is clear that it still expects the unemployment rate to reach 10%.

"Undoubtedly the lower number of employees covered by JobKeeper is due in part to the eligibility rules which have excluded a wide range of employers from qualifying even though they are experiencing considerable economic stress as a result of the COVID-19 crisis.

"The Government should address these anomalies and reconsider rules which leave many employees without support and mean that many employers are facing unfair competition.

"With the estimated budgetary costs reduced by $60 billion there is considerable scope for refinements to the program including the following areas proposed by Ai Group: 

• Include the many low-margin businesses who have not experienced a reduction in turnover of 30% but are under greater stress than higher-margin businesses that do qualify for Jobkeeper;
• Include the many business units that operate as autonomous parts of a larger business but have not been assessed as eligible based on their own loss of sales but are instead assessed as ineligible based on the total experience of the business as a whole; and
• Include the many medium-sized businesses that are autonomous operations in large company groups who require a 50% turnover reduction threshold before they are assessed as eligible while their competitors face a threshold of 30%.

"The current crisis is far from over and we encourage the government to continue to support the economy in this difficult time,” Mr Willox said.

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