Turnover test change to continue JobKeeper wage subsidies after September
The $70 billion JobKeeper wage subsidy scheme will extend beyond September, but the Morrison Government is working on turnover test changes to determine which businesses are eligible. See how it could affect you.
HS Coronavirus News
Don't miss out on the headlines from HS Coronavirus News. Followed categories will be added to My News.
Wage subsidies for workers in struggling businesses will continue to be paid by the Federal Government after September, with a refreshed turnover test likely to determine which employers are eligible.
The Herald Sun understands the government’s mini-Budget, to be released in a fortnight, will shift the JobKeeper scheme into a new phase instead of switching to industry-specific support.
Melbourne’s six-week lockdown — expected to cost the economy $6 billion — has highlighted the importance of a nationally consistent scheme based on business needs.
It comes as Treasurer Josh Frydenberg revealed the government was also considering fast-tracking income tax cuts planned for the next five years.
About 3.5 million workers are receiving fortnightly $1500 wage subsidies in the initial six-month phase of JobKeeper, costing $70 billion.
Businesses are eligible if their pre-pandemic turnover of less than $1 billion has fallen by 30 per cent, or 50 per cent if their turnover was over $1 billion.
It is understood the Federal Government plans to adjust the turnover test so the scheme is targeted at businesses limited by ongoing health restrictions.
This will apply equally to businesses locked down in Melbourne, as well as companies in other states affected by border closures and venue density limits.
Businesses on JobKeeper are already required to provide monthly turnover updates, allowing the government to assess how the subsidies are assisting their recovery.
Prime Minister Scott Morrison said on Wednesday that there would be “a further phase of support that goes beyond September”.
“This is about tailoring a national program to provide support where the support is needed and because of what has happened in Victoria, obviously the need there will be far greater than was previously and that need will be met,” he said.
“That national program of support will give people in the same areas of need the same support.”
The level of the subsidy was also considered in a Treasury review finalised last month.
Mr Morrison acknowledged on Wednesday that “that level of support can’t go on forever”.
Oppen Cafe manager Jay Clough said the new lockdown would halve their income, even as they were able to pivot to takeaway.
“That makes it a huge challenge to manage overheads and expenses,” he said.
Mr Clough said the Windsor cafe was relying on JobKeeper but some workers would lose their jobs.
“Unfortunately the new lockdown will also impact new staff that we took on when restrictions eased because we will have to drastically cut shifts,” he said.
“Our new staff won’t be eligible for JobKeeper.”
The Morrison Government last year legislated tax cuts which mean 94 per cent of taxpayers will face a marginal rate of 30 per cent or less by 2025.
Mr Frydenberg said the government was now considering “the timing of those tax cuts”.
“We do want to boost aggregate demand, boost consumption, put more money in people’s pockets, and that is one way to do it,” he said.
Shadow Treasurer Jim Chalmers called on the government to “come clean” about its plans for tax cuts and the JobKeeper scheme.
“This new outbreak and these new restrictions are creating new levels of uncertainty for workers and for businesses, and the Morrison Government is only adding to that uncertainty by refusing to release the JobKeeper review,” he said.
It came as the Parliamentary Budget Office reported the Budget deficit for the financial year until May had rocketed to $68 billion, compared to an expected $3 billion surplus, while net debt soared to $464 billion.
Westpac economists expect the 2019/20 deficit to reach $95 billion, and they have now upped their forecast for 2020/21 from $170 billion to $240 billion.
MORE NEWS
TRUGANINA SCHOOL TOPS 100 CASES, CITY SET TO SHUT DOWN
PETER ALEXANDER, SMIGGLE, JUST JEANS TO CLOSE