Extending a refined JobKeeper scheme for six months is a prudent and welcome approach to the extraordinary economic challenges Australia continues to face. It is the approach the Chamber of Commerce and Industry WA (CCIWA) has encouraged the Federal Government to take since one third of WA businesses (32 per cent) expressed concern about their prospects for survival without JobKeeper.
The revised approach includes having businesses reassess and demonstrate their eligibility again after September, with an appropriate tapering of the rate of subsidy. In the long run, the best thing for the economy is undoubtedly for businesses to transition off government fiscal support.
Treasury’s review of JobKeeper identified 875,000 recipients whose supplement was higher than their regular wage, distorting incentives within the labour market. The two tier rate of subsidy announced today is a wise step towards rebalancing these incentives.
COVID-19 is the most destructive economic event in generations, with two million Australians losing their jobs or losing hours, including a record 124,000 Western Australians out of work. JobKeeper has proven to be a world-leading fiscal support measure, a lifeline to businesses and workers which is preventing further job losses and stabilising the economy.
CCIWA urges State and Federal Governments to work together through the National Cabinet to pursue a more competitive tax system and more flexible industrial relations settings. Western Australia is relying on the strength, ingenuity and dynamism of local businesses to drive our economic recovery — policy settings need to support the business sector to grow, invest and create new jobs.
Chief Economist CCIWA