JobKeeper was value for money

After sitting on Treasury’s final independent evaluation of the JobKeeper payment for a month, the government released it late on Friday, at the end of an exceptionally busy news week. This was not surprising. The report is a credit to the Morrison government, especially former treasurer Josh Frydenberg, who oversaw the scheme. JobKeeper delivered value for money, the analysis found, by preserving jobs, supporting incomes – especially among poorer Australians – and by preventing large-scale business failures.

It also stabilised the economy amid enormous uncertainty, saving between 300,000 and 800,000 jobs. The scheme was well-managed and “implemented with incredible speed”, balancing the rapid rollout of payments against the risk of error and fraud.

As Mr Frydenberg said in a statement on Saturday, with the nation facing its biggest economic shock since the Great Depression, JobKeeper put Australia “on a path to its lowest unemployment rate in almost 50 years’’. While more than one in 10 recipients received more in JobKeeper with the flat-rate $1500 per fortnight payment in the scheme’s first phase – broadly equivalent to the national minimum wage – the flat rate provided certainty, simplicity and clarity for workers and employers.

At the time, it was thought that anything other than a flat payment could cause unacceptable delays and introduce implementation risks, the report said. And, while almost $9bn was provided to businesses that had increased turnover at the time they were receiving JobKeeper payments, the inclusion of a “clawback” mechanism would likely have created adverse distortions.

A clawback may have operated like an anti-production subsidy and perversely encouraged businesses to reduce activity to qualify for support, potentially creating disincentives for businesses to recover when circumstances improved.