$60 billion remains in limbo as the Federal Government considers what to do with the unbudgeted JobKeeper funds.
The result of a dramatic overestimation of the cost of the landmark payment, calls to redistribute the funds have been made by unions and the Opposition, while the Government hints it may bolster struggling industries, or abstain from borrowing the money at all.
On Friday the Government revealed that the $130 billion wage subsidy, announced at the height of the coronavirus pandemic, would instead cost only $70 billion.
An Australia Taxation Office review discovered that only 3.5 million Australians were receiving JobKeeper payments, instead of an anticipated 6 million. This revealed errors by hundreds of businesses who had wrongly input the dollar amount they expected in wage support, instead of their number of eligible employees.
The most common mistake was for businesses with one eligible employee, expecting to receive $1500 per fortnight, to report “1500” eligible employees.
These errors drastically changed the final forecast. They will also impact predictions of how quickly Australia can recover.
Prime Minister Scott Morrison has taken “ultimate responsibility” for the forecasting error but argued it was a win for taxpayers. He equated the error with taking out a loan to build a house and coming in under budget.
“When JobKeeper was designed and first costed, the uncertainties were extreme,” he told the National Press Club in Canberra on Tuesday.
“What Treasury has done is made an estimate of what could be the case. It was the worst-case scenario, effectively, that they were forecasting, estimating. We are now in what is their best-case scenario.”
Unions and the Federal Opposition have called for the unbudgeted $60 billion to be used to cover short-term casuals and all university staff, while the Greens say arts and entertainment workers, temporary visa holders and international students should also receive payments.
Treasurer Josh Frydenberg on Monday said the Government did not intend to expand JobKeeper criteria, but the program would be reviewed next month and money may be redistributed to struggling industries.
“The tourism sector could be one sector in need of further support,” he told the ABC.
“That’s what we’ll look at in the context of the economic situation at the time.”