The Times Australia
Thursday, April 3, 2025 11:23:25 PM
Business and Money
The Times Real Estate

.

That estimate of 6.6 million Australians on JobKeeper, it tells us how it can be improved

  • Written by Roger Wilkins, Professorial Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, University of Melbourne

JobKeeper[1] is by “no means perfect”. Treasury Secretary Stephen Kennedy used those exact words[2] when he appeared before a Senate committee on COVID-19 on Tuesday, going on to observe that getting it right would “require continuous work”.

We have dug into the JobKeeper numbers to work out how it could be improved.

That estimate of 6.6 million Australians on JobKeeper, it tells us how it can be improved Room for improvement. Treasury Secretary Steven Kennedy. Mick Tsikas/AAP

The Morrison government announced JobKeeper on March 30. For a cost of A$130 billion, employers of eligible workers in eligible businesses will receive a flat $1,500 per fortnight wage subsidy for up to six months, irrespective of the worker’s previous wage.

The most striking insight from those figures is the number of workers that are expected to receive the payment – more than 6.6 million, six out of every ten[3] private sector workers.

It doesn’t quite jell with another number – the number of workers treasury expects JobKeeper to keep in work.

We can get an idea of this from Treasurer Frydenberg’s statement on April 14[4] that “treasury estimates the unemployment rate would be 5 percentage points higher without JobKeeper.”

The labour force is 13.7 million. Allowing for the fact that some of the workers who lose jobs will withdraw from the labour market and not be counted as unemployed, the implication is that JobKeeper will save, at most[5], one million jobs.

Payments to 6.6 million, to save 1 million

Put crudely, JobKeeper will go to 6.6 million Australians in order to save the jobs of around one million

Of course, it is also designed to benefit workers who lose hours but are still employed. Taking this into account explains only some of the difference.

Reserve Bank Governor Philip Lowe expects total hours worked to fall by around 20%[6] over the first half of the year, 2.6 million[7] full time jobs’ worth. That is a long way short of 6.6 million.

Read more: JobKeeper is quick, dirty and effective: there was no time to make it perfect[8]

It isn’t surprising that coverage of JobKeeper is broader than predicted job loss. That was inherent in the design. What is surprising is the size of gap between the predicted number of payments and the predicted number of jobs at risk. This has three important implications.

1. Mutual obligation

If JobKeeper does end up being paid in the name of 6.6 million Australians rather than the one million or so that would need it to stay in work, it will be a substantial subsidy to business. Many businesses will have received $1500 per fortnight for workers they would have kept on anyway.

This can be justified as a means of putting those businesses on a stronger footing to stay afloat during the shutdown and expand when it is over, maintaining high employment into the future. But such support comes with an obligation. Businesses that receive this sort of wage subsidy are implicitly entering into a contract with the community to maintain employment when JobSeeker ends. This commitment should be made explicit.

2. Investigation

The incredibly rapid onset of COVID-19 means the eligibility criteria for JobKeeper are based on changes in monthly revenue. Any other approach would have delayed payments. But using revenue as a trigger provides an incentive for businesses to manipulate month-to-month revenue.

That makes it imperative that JobKeeper scheme is accompanied by substantial monitoring. One way to do it is by cross-referencing claims for JobKeeper with other data on the impact of COVID-19.

As an example, the chart below compares the actual size of falls in employment by industry between mid March and early April with shares of inquiries to the Tax office about JobKeeper by industry. Some industries appear to be outliers – with relatively high shares of inquiries but relatively small job losses.

Jobs lost versus inquiries about JobKeeper by industry

That estimate of 6.6 million Australians on JobKeeper, it tells us how it can be improved ABS 6160.0.55.001, ATO figures via news.com.au[9] The chart is rudimentary. It shows the accommodation and food services industry lost the most jobs, but nowhere near the most inquires about JobKeeper. The most were in the professional, scientific and technical services industry, which lost nowhere near as many jobs. As time goes on, it should be possible to monitor claims in ways that are more sophisticated. 3. Scope to extend JobKeeper Forecasts – even those based on the most relevant and up-to-date information – can be wrong. This isn’t a criticism. Making forecasts is hard. But it might be that 6.6 million turns out to be an overestimate. If so, it creates an opportunity. Read more: Why temporary migrants need JobKeeper[10] It would allow JobKeeper to be extended to some of the workers who at present miss out, among them casual employees in their job for less than 12 months and the temporary visa holders who are currently excluded. Such a change would be consistent with the stated goal of trying to keep workers connected to their workforce[11]. It will be needed when the crisis is over, and it would be the right thing to do for equity, ensuring there is a safety net for all of us. The treasury secretary is correct. JobKeeper should be anything but set and forget.

References

  1. ^ JobKeeper (theconversation.com)
  2. ^ used those exact words (parlinfo.aph.gov.au)
  3. ^ six out of every ten (cdn.theconversation.com)
  4. ^ April 14 (ministers.treasury.gov.au)
  5. ^ at most (cdn.theconversation.com)
  6. ^ around 20% (www.rba.gov.au)
  7. ^ 2.6 million (cdn.theconversation.com)
  8. ^ JobKeeper is quick, dirty and effective: there was no time to make it perfect (theconversation.com)
  9. ^ ABS 6160.0.55.001, ATO figures via news.com.au (cdn.theconversation.com)
  10. ^ Why temporary migrants need JobKeeper (theconversation.com)
  11. ^ connected to their workforce (treasury.gov.au)

Authors: Roger Wilkins, Professorial Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, University of Melbourne

Read more https://theconversation.com/that-estimate-of-6-6-million-australians-on-jobkeeper-it-tells-us-how-it-can-be-improved-137237

SME Business News

Why is a Commercial Vacuum Cleaner Better?

Maintaining a pristine work area isn't just about aesthetics—it's about fostering an atmosphere of contentment, wellness, and awe-inspiring wholesomeness. Be it an office, a retail outlet, or a...

Why 20% of workers don't feel safe in their workplace

80% OF AUSTRALIAN WORKERS FEEL THEIR COMPANY PRIORITISES HEALTH AND SAFETY IN THE WORKPLACE, BUT WHY NOT 100%? COS shares innovative solutions to keep staff healthy, safe and productive A...

Albanese government looking to acquire Rex Airlines if buyer can’t be found

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airlines, in its latest bid to prop up aviation services to regional and remo...

The Legal Battle Against IP Theft: What Businesses Need to Know

So you've formulated that million-dollar idea and you're ready to take your business to the next level. You were so excited to publicize your supposedly next big thing that you went on TikTok...

The Times Features

Understanding the Dangers of Ignoring a Gas Leak

Gas leaks are silent threats lurking within both homes and workplaces. A gas leak occurs when natural gas or any other gaseous substance escapes from a pipeline or containment. T...

Can You Sell Your House Privately in Queensland? Here’s How

Selling a house privately in Queensland is entirely possible and can be a cost-effective alternative to using a real estate agent. While agents provide valuable expertise, their co...

Itinerary to Maximize Your Two-Week Adventure in Vietnam and Cambodia

Two weeks may not seem like much, but it’s just the right time for travelers to explore the best of Vietnam and Cambodia. From the bustling streets of Hanoi to the magnificent te...

How to Protect Your Garden Trees from Wind Damage in Australia

In Australia's expansive landscape, garden trees hold noteworthy significance. They not only enhance the aesthetic appeal of our homes but also play an integral role in the local...

Brisbane Homeowners Warned: Non-Compliant Flexible Hoses Pose High Flood Risk

As a homeowner in Brisbane, when you think of the potential for flood damage to your home, you probably think of weather events. But you should know that there may be a tickin...

Argan Oil-Infused Moroccanoil Shampoo: Nourish and Revitalize Your Hair

Are you ready to transform your hair from dull and lifeless to vibrant and full of life? Look no further than the luxurious embrace of Argan Oil-Infused Moroccanoil Shampoo! In a...

Business Times

Why is a Commercial Vacuum Cleaner Better?

Maintaining a pristine work area isn't just about aesthetics—it's about fostering an atmosphere of contentment, wellness, a...

Why 20% of workers don't feel safe in their workplace

80% OF AUSTRALIAN WORKERS FEEL THEIR COMPANY PRIORITISES HEALTH AND SAFETY IN THE WORKPLACE, BUT WHY NOT 100%? COS shar...

Albanese government looking to acquire Rex Airlines if buyer can’…

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airline...

LayBy Shopping