800,000 jobs: how JobKeeper saved ‘butts’ of Australia’s workers

The Albanese’s Government’s review of JobKeeper during the pandemic has found it saved between 300,000 and 800,000 jobs, stopped large-scale business collapses and provided value for money.

The Albanese’s Government’s review of JobKeeper during the pandemic has found it saved between 300,000 and 800,000 jobs, stopped large-scale business collapses and provided value for money.

But it has also found “there are lessons that could improve outcomes and value for money should a similar scheme be ­required in future”.

In June, Treasurer Jim Chalmers announced former Treasury bureaucrat Nigel Ray had been tasked with investigating whether the $89 billion scheme established by his ­predecessor Josh Frydenberg had given the taxpayer value for money.

The decision to commission the review followed criticism from Labor in opposition that the scheme had been wasteful.

In his final report, which was released without fanfare on Friday afternoon, Mr Ray found the scheme was a success that reduced uncertainty at a time when business confidence was plummeting.

Josh Frydenberg, who was in charge of rolling out JobKeeper. Picture: AAP Image/Ellen Smith

He also rejected the criticism the scheme did not have a clawback provision that would have forced companies that made profits to pay the money back to the Government.

Firms applying for JobKeeper were required to show their turnover was projected to fall by more than 30 or 50 per cent in the next six months but about $27 billion of the scheme’s payments ended up going to companies that ultimately did not suffer losses during the pandemic.

The report concluded: “Overall, JobKeeper provided value for money through its broad social benefits and the role it played in addressing extraordinary and unquantifiable uncertainty and averting the worst economic tail risks of the pandemic”.

It also found it “was effective at preserving employment, supporting incomes and preventing large scale business failures during the pandemic” and “reduced uncertainty at a time when business and consumer sentiment was plummeting in response to the Covid-19 crisis.”

Queues at Centrelink at the height of Covid. Picture: Sam Ruttyn

The introduction of the scheme showed the Government was “supporting businesses and workers through the pandemic” and its announcement “was accompanied by a rebound in confidence”.

Mr Ray argued that a clawback mechanism “could have undermined the role of JobKeeper in underpinning confidence and reducing uncertainty in the early months of the pandemic and introduced adverse incentives and distortions”.

He also found that despite being implemented with ­“incredible speed”, the scheme was “well managed” and its ­implementation “struck an ­appropriate balance between rapidly deploying support and managing risks of error and fraud”.

The effect on employment was large, supporting about four million employees, which is roughly a third of the workforce, with credible estimates suggesting “it prevented the loss of between 300,000 to 800,000 jobs.”

A spokesman for Treasurer Jim Chalmers said it was “a good program that was badly implemented” by the previous government.

Originally published as 800,000 jobs: how JobKeeper saved ‘butts’ of Australia’s workers