- The Federal Government is set to reveal the future of the JobSeeker and JobKeeper COVID-19 support schemes in a budget update this Thursday
- The support program is not expected to be slashed entirely, but the nature of payments made to out-of-work Australians will change
- A new report from The Australian Institue has warned that if the changes are too drastic, over half a million Aussies could be thrust into poverty
- Importantly, Prime Minister Scott Morrison said no new changes will come into place until the end of September when the current program is slated to expire
- The Federal Government also revealed this morning the Coronavirus SME Guarantee Scheme, designed to support small and medium businesses, will be extended past its September expiry date
The Federal Government is set to reveal the future of the JobSeeker and JobKeeper COVID-19 support schemes in a budget update this Thursday.
Treasurer Josh Frydenberg will outline the details of the revised program, which is expected to see a tiered system of government support rather than a flat payment.
It’s expected the changes will be made only to the April Coronavirus Supplement of the longstanding support program for out-of-work Australians. Since 1994, unemployed Australians seeking work have been eligible for payments of up $565.70 per fortnight, with slightly adjusted amounts available for those with children or living with a partner.
In late April, the Federal Government effectively doubled this support scheme, adding an extra $550 per fortnight to the pockets of job seekers as the coronavirus pandemic put tens of thousands of Australians out of work. The Coronavirus Supplement has a six-month timeline, meaning it’s due to expire in late September. The JobKeeper wage support program is also due to expire in September.
With a recent resurgence in Victorian coronavirus infections sparking fresh lockdowns and more lost jobs, however, the government has acknowledged support will still be needed after September, but it might just look a bit different.
Importantly, Prime Minister Scott Morrison said today the current version of the program will still last until September.
“What the Treasurer and I will announce this week won’t commence the day after we announce it,” the Prime Minister said.
“There will be several months for businesses to adjust to the next phase,” he said.
Poverty worries
The changes to JobSeeker have significant implications, according to a new report from The Australian Institute.
According to the report, 650,000 Australians will fall into poverty if the JobSeeker support is pulled out from under them — including 120,000 children.
The report claims the housing market would face significant pressure, too, as Australians struggle to make rent and mortgage payments.
Executive Director of The Australian Institue, Ben Oquist, praised the effectiveness of the coronavirus support programs, but with the commendation issued a stern warning.
“The Coronavirus Supplement has been an essential part of our nation’s response to this recession and has improved the lives of nearly half a million Australians. In fact, no other government has ever lifted so many people out of poverty so quickly,” Ben said.
“Removing the supplement would put more than 600,000 Australians, including more than 100,000 children, into poverty. This will not only have serious negative social effects for decades to come but makes terrible economic policy by effectively withdrawing much-needed stimulus,” he said.
“Our research shows that even if the government removes the supplement but increases the old rate of JobSeeker by $75 per week there will be a half a million person increase in poverty,” he added.
Nevertheless, the JobSeeker program is not expected to fall back to its pre-COVID version. How the new program will look, however, will be revealed on Thursday.
Business support
The Federal Treasurer announced this morning government support for small and medium businesses (SMEs) is being extended as they move into what the government calls the “recovery phase” of the coronavirus crisis.
The Coronavirus SME Guarantee Scheme has already seen more than 15,600 businesses accept $1.5 billion in loans, according to the government, and the next phase of support will help them move from hibernation to the new “COVID-safe economy”.
The scheme has been extended and updated, with SMEs now able to take out loans of up to $1 million per borrower, up from the initial $250,000 per borrower, and increase their maximum loan terms from three years to five years.
The new phase of the scheme will kick off in October and be available until the end of June 2021.