Coronavirus Australia: JobKeeper bungle my fault, says Treasury Secretary Steven Kennedy

Australia’s Treasury Secretary has accepted responsibility for the JobKeeper bungle that saw the government over-estimate its cost by billions.

Treasury Secretary Steven Kennedy has taken full responsibility for a JobKeeper stuff-up that saw the Federal Government over-estimate the cost of the program by $60 billion.

In his first comments about the bungle since it came to light last month, Dr Kennedy told a Senate committee today the wage subsidy program was put in place during a time of uncertainty in the COVID-19 crisis as the Federal Government braced for a worst-case scenario for the economy.

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At the time, economic forecasts suggested Australia’s gross domestic product could shrink by as much as 25 per cent in the June quarter.

“In this uncertain context it was prudent to design the policy to be robust to whatever circumstances unfolded, to be demand driven,” Dr Kennedy said.

$688 million for 1 million jobs according to Mr Frydenberg. This is absurd.
This looks a bigger error that the $60 billion JobKeeper fiasco.

— Stephen Koukoulas (@TheKouk) June 3, 2020

The JobKeeper scheme was projected to cost $130 billion, but that figure was revised down to $70 billion.

“As the secretary of the Treasury I take full responsibility for the revised costing of the JobKeeper program and all matters associated with the advice that Treasury has provided,” Dr Kennedy said.

The government was hounding people to their graves for not being able to dig up years old payslips and yet someone “takes full responsibility” for being $60 billion dollars out in jobkeeper and it’s oh well better luck next time.

— captain pirate monkey with an airship (@jonkudelka) June 9, 2020

But Opposition Leader Anthony Albanese said it was “pathetic” Treasurer Josh Frydenberg had let Dr Kennedy to take the fall.

“The idea that Josh Frydenberg thinks it’s acceptable to have a public servant accept responsibility for a scheme that he has implemented under the Westminster system is just quite frankly pathetic,” Mr Albanese said.

Senator Cormann denied it was an accounting error, instead preferring to describe it as an “estimates variation”.

Australian Finance Minister Mathias Cormann reacts during the Senate inquiry at Parliament House in Canberra. Picture: Lukas Coch

The JobKeeper program was re-costed after the tax office found errors over-estimating the number of employees on some employers’ application forms, the committee heard.

Prime Minister Scott Morrison last week guaranteed JobKeeper would continue for the full legislated period, until September, before announcing childcare workers would be kicked off the program early.

Early educators look after our littlest Australians.

They’ve helped keep frontline workers where we need them – at work.

But now the Government wants to rip JobKeeper away from them early.

I’m standing with these workers. The Government is leaving them behind. pic.twitter.com/Edvc1JYRQC

— Anthony Albanese (@AlboMP) June 9, 2020

Meanwhile, Australia’s unemployment rate is expected to hit eight per cent when wage subsidies are due to end but the forecast is looking less grim as the health situation improves.

Treasury secretary Steven Kennedy said the unemployment rate was expected to be eight per cent by September when JobKeeper is legislated to end.

“We have been steadily revising down our expectations of how high the unemployment rate will rise because of the fact the health scenario has continued to improve,” he told the committee.

Almost $13 billion in JobKeeper payments have flowed to 3.3 million workers.

The Morrison Government’s bungling of JobKeeper is having real consequences for hundreds of thousands of Australia workers. The bigger the shambles they make of it now, the longer the unemployment queues and the harder the recovery @QandA #auspol pic.twitter.com/kU84ZMjlB1

— Jim Chalmers MP (@JEChalmers) June 9, 2020

With AAP.