Coronavirus: Ex-Treasury boss Bernie Fraser pans $60bn JobKeeper funding error

Former Treasury boss Bernie ­Fraser has said the $60bn costing error for the JobKeeper program ‘should not have happened’.

Former Treasury secretary Bernie Fraser. Picture: AAP

Former Treasury boss Bernie ­Fraser has said the $60bn costing error for the Morrison government’s signature JobKeeper program “should not have happened”, as economists predict a stronger recovery in the wake of the COVID-19 crisis.

Mr Fraser, who led the department in the late 1980s and is a former Reserve Bank governor, said he could not “understand why people who were getting the numbers, with a little bit of mental arithmetic, would not realise there was something wrong here”.

He said the massive error spoke to the degraded role of the public service more broadly, with ­bureaucrats too often wanting “to protect a minister”.

“The quality and accountability of the public service has suffered. These things should not have happened and would not have happened in earlier days,” he told The Australian.

“Treasury does not have the ­respect it once did, and I feel very sad about it.”

Treasury’s updated estimates, released on Friday afternoon, suggest businesses and industries have proved vastly more resilient than expected in late March when the pandemic fear was at its peak.

Instead of 6.5 million workers eventually receiving subsidised wages, 3.5 million are expected to be beneficiaries of the Morrison government’s emergency support program, implying an ultimate price tag of $70bn instead of the ­initially estimated $130bn.

Anthony Albanese seized on the blunder to question how voters could trust the government to get the economic recovery right “if we can’t trust them to get their numbers right”.

Labor is pushing for the $60bn to be paid out to Australians not currently eligible under the scheme.

“The government was claiming JobKeeper of that size ($130bn) was necessary to save the economy. If that was so, then by the same logic, JobKeeper halved must be providing half the necessary support,” the Opposition Leader writes in Tuesday’s The Australian.

Finance Minister Mathias Cormann defended Treasury, saying the forecasts were formulated at a time of extraordinary uncertainty around the trajectory of the corona­virus: “The $130bn was not a target. It was not a ceiling. It was an initial estimate. It is an estimate that has been adjusted down. That is good news.

“It was an estimate at a time when the outlook in terms of the health crisis and the economic impact of that health crisis was significantly more negative than what it has turned out to be.”

Health Minister Greg Hunt pushed back against suggestions health experts had done a poor job in estimating the impact of the health crisis. “What we have done is planned for the worst and been able to deliver the best,” he said. “The steps we took on the health front have meant we’ve been able to reap an economic benefit. That's a tribute to the health system.”