$60bn JobKeeper bungle sparks fresh hope for Tassie businesses

An embarrassing paperwork bungle, which has seen the costs of the JobKeeper scheme slashed by $60 billion, has sparked fresh calls for the $1500-a-fortnight payment to be extended.

AN embarrassing paperwork bungle – which has seen the costs of the JobKeeper scheme slashed by $60 billion – has prompted fresh calls for the $1500-a-fortnight payment to be extended.

Tasmania’s hospitality sector wants the wage subsidy to stay in place until at least Christmas for the hardest hit industries as a result of the savings.

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In an extraordinary twist on Friday, federal Treasury revealed it had massively overestimated the six-month scheme’s cost due to a “reporting error” and revised it’s forecast down from $130 billion to $70 billion.

Australian Treasurer Josh Frydenberg. Picture: AAP IMAGE/LUKAS COCH

It also revealed only 3.5 million Australians were expected to get the payment, not 6.5 million as initially forecast.

The error was blamed on about 1000 businesses who made “significant errors” on their paperwork when applying for the scheme.

“The most common error was that instead of reporting the number of employees they expected to be eligible, they reported the amount of assistance they expected to receive,” the statement said.

“Over 500 businesses with one eligible employee reported a figure of ‘1500’, which is the amount of JobKeeper payment they would expect to receive for each fortnight for that employee.”

Treasurer Josh Frydenberg said the miscalculation was “good news for the taxpayer”, but federal Opposition leader Anthony Albanese described it as an “absolute shambles”.

About $8.7 billion has already been paid to more than 759,600 businesses, covering about 2.9 million employees.

Mr Frydenberg reassured Australians no money would be clawed back, saying no payments were sent out that shouldn’t have been.

Tasmania Chamber of Commerce and Industry chief executive Michael Bailey.

Tasmania Chamber of Commerce and Industry Michael Bailey welcomed the accounting error as “great news,” saying the government should immediately extend the “safety net” for the hardest hit sectors beyond September.

“Clearly there are other industries that can come off that haven’t been as badly impacted as we suspected they would be,“ he said.

“But there’s no doubt that Tasmanian accommodation and some hospitality businesses are going to be struggling long term until we can not only open up borders but also sure up the sort of supply to Tasmania we need through the airlines.

“This is great news, and it’s news the government should jump on straight away.”

CEO of the Tasmanian Hospitality Association, Steve Old. Picture: ZAK SIMMONDS

Tasmanian Hospitality Association boss Steve Old said extending the payment until Christmas for hospitality would give many pubs, hotels and cafes a fighting chance to survive.

“My worry is there are lot of businesses that have gone to banks or other suppliers and have got payments deferred and all they’re really doing is delaying the inevitable, which is they have got to pay it,” he said.

“And they are going to reopen, not at full capacity, and they’re going to be faced with massive debts and massive bills.”

“We need to see it extended, and we need to see that announced soon for our industry,” he said.

Mr Frydenberg said the underspend was “not an invitation to go and spend more”.

“All the money that the government is spending during the coronavirus period is borrowed money,” he told ABC.

The “reporting error” was detected on Thursday by the Australian Tax Office and Treasury as they analysed the amount which had been paid out.

“It was not picked up by the ATO earlier as their primary focus in the first fortnight of JobKeeper payments was on ensuring that JobKeeper payments were paid promptly to those eligible for them, and not paid to those who were ineligible,” Treasury’s statement said.