Coronavirus: Scott Morrison urges business not to axe staff, wage subsidies are coming

As Treasury fine-tunes a new wage-relief package for employees, Scott Morrison asks employers to hold off standing down staff.

Prime Minister Scott Morrison says wage subsidies are coming, as he appeals to businesses to hold off standing down workers. Picture: AAP

Hundreds of thousands of Australians left without work during the coronavirus pandemic are set to gain from an emergency wage subsidy that could be worth $1500 a fortnight, as Scott Morrison urges employers to hold off standing down any more workers until the package is ­announced this week.

Unions called on the government to cap the subsidy at the ­median wage rate of at least $1375 per week, while Treasury and the Australian Taxation Office were locked in talks to finalise the amounts and delivery mechanism.

While the Expenditure Review Committee has not yet ticked off on the package, the subsidy is being referred to as a “job keeper allowance” and is likely to target full-time employees over a six-month period.

Under the plan, the government would pay the employer, who would then give the money directly to their employees.

There is a belief within government that paying everyone 80 per cent of their income — such as under the UK model, which pays up to about $5000 per month — is inequitable because low- and high-income workers would receive vastly different amounts.

“I would say to employers, who I know are going through very difficult times, these changes will be announced soon and I would ask that before you make any further decisions that you take the opportunity to see the further measures that the government will be announcing, and we will be seeking to enlist you in that process,” the Prime Minister said.

“We will be ensuring also that those who have already gone into this very devastating situation, where they have had to stand down workers, that any measures we are announcing will be taking them on as well, and we will be working with them to that end.”

Australian Council of Trade Unions secretary Sally McManus says the stimulus must apply to all workers regardless of work status. Picture: AAP

he payments will be made via the existing tax system and designed so businesses that have to go into “hibernation” during the pandemic can keep connected to their employees who won’t be working. An announcement is likely early this week.

Finance Minister Mathias Cormann said the wage subsidy would be delivered “in an Australian way”, with the intention that the business would have to keep its worker employed in order to ­access the money.

Deloitte Access Economics partner Chris Richardson agreed with the government that now was the worst time to reinvent the wheel, and said by using the existing tax system the mechanism to deliver the payments would be faster and more reliable.

Mr Morrison said the subsidy would have a broader application than just small and medium enterprises, meaning big corporations such as Qantas could qualify. However, it was unclear whether retrenched workers as well as stood-down workers would be ­eligible to receive the money.

“This is part of the hibernation strategy of ensuring we keep people connected with their businesses and with their jobs so that on the other side of this, Australia can bounce back stronger,” the Prime Minister said.

“This is going to be incredibly tough economically as well as from a health point of view, but where Australia can ensure we can bounce back better on the other side and more strongly is by following these sorts of strategies which enable businesses to re-emerge very, very quickly, with their employees, with their capital, with their equipment, with their shops, with all of the things they can switch on again and get moving again. That is in the long-term interests of Australia.”

Australian Council of Trade Unions secretary Sally McManus said the “very welcomed” wage subsidy should be backdated so all those people who had already lost their jobs could be re-employed, and it should apply to all workers.

“It must apply to all workers, whether they be casual workers, visa workers, contract workers or sole traders,” she said.