Coronavirus: JobKeeper cash ‘needed for schools and hospitals’

Spending on schools and hospitals will be at risk if coronavirus support programs are not reined in, Scott Morrison says.

Scott Morrison at the National Press Club in Canberra on Monday. Picture: AAP

Spending on services such as schools and hospitals will be at risk if coronavirus support programs are not reined in, with Scott Morrison flagging the need to wind back JobKeeper and JobSeeker payments in September.

The Prime Minister also rebuked Labor and those calling on the government to spend more and for longer, declaring “it is not a wise or responsible course” as he revealed the economy was expected to shrink by $100bn this year and that it would take at least two years to return to pre-coronavirus levels.

The tourism, retail and hospitality sectors on Monday called for the extension of the $1500 fortnightly JobKeeper payments ­be­yond the September 27 end date, warning they could not survive without support while inter­national borders were shut and the one person per 4sq m rule was in place.

Industry leaders said they did not mind if the stimulus was provided through a different program to JobKeeper but argued it should have the same goal of keeping employees connected to businesses.

Speaking at a Committee for Economic Development of Australia conference, Mr Morrison said the government “must be ­extremely cautious about our ­expenditure”, which has been at record levels during the corona­virus pandemic, and stressed measures such as the $70bn JobKeeper program and JobSeeker were ­designed to be targeted and time-limited.

“There will always be a case made for spending more and for spending longer, and there are plenty who are happy to make that case,” Mr Morrison said.

“Such a path is dangerous and will prejudice medium and longer term capacity to deliver on core essential services like health, hospitals, schools, education, the Pharmaceutical Benefits Scheme, our social security supports.

“Over-extending on the fiscal supports puts those longer term and medium-term supportive services at risk.

“Neither excessive austerity nor higher taxes are the path that our government will pursue. We will pursue growth and responsible budget management that ensures that governments live within their means and guarantee the essentials Australians rely on.”

To help in the recovery, Mr Morrison announced the scope of the National COVID-19 Co-ordination Commission would be ­expanded and new members added, shifting its focus from manufacturing and supermarket supplies to economic and industrial relations reform.

Australian Chamber of Commerce and Industry’s tourism chair John Hart agreed with Mr Morrison that government assistance should be cut off as early as possible but said if JobKeeper was not extended for the tourism ­industry, many businesses would fail.

“The answer has to be in tightly targeting any form of program such as JobKeeper to exactly where they’re necessary,” Mr Hart said. “September is too early for those sectors of the economy that are 100 per cent internationally driven.”

Restaurant & Catering Australia chief executive Wes Lambert said JobKeeper payments should not be tapered off until at least ­December 31, noting it would remain a low-margin industry facing the same pre-coronavirus pressures of wages, rent and ­increasing costs.

The government has suggested it will introduce more targeted stimulus packages for worst affected industries like tourism once JobKeeper and JobSeeker ends.

Far north Queensland Liberal MP Warren Entsch, whose Leichhardt electorate takes in Cairns, said the scheme should be con­tinued for certain regions and ­industries.