Scott Morrison considers slashing $1,500 JobKeeper payment or phasing it out altogether amid reports he could lean on Jacinda Ardern's wage subsidy model
- JobKeeper payment could be scratched before promised September 27 end date
- Australia considering adopting a wage subsidy approach similar to New Zealand
- Full time and part time staff would be paid different rates under new proposal
- JobKeeper is currently being reviewed by Treasury, Scott Morrison announced
Scott Morrison is considering phasing out the $1,500 JobKeeper payment and replacing it with something less costly and more flexible.
One option being considered is following New Zealand's wage subsidy, which offers employers $585.80 per week for full-time staff and $350 for part-timers.
The change would cut the cost of the $130 billion program now in place, which offers all workers a flat rate of $1,500 a fortnight, regardless of their usual earnings.
In New Zealand, employers have the opportunity to pay their staff less if they usually earn less than the subsidised amount - and can use the rest to pay casuals who aren't entitled to any benefits.
Mr Morrison is considering following New Zealand's lead and allowing Australian employers to do the same, news.com.au reported.
JobKeeper ends on September 27 - but the PM has the option of reviewing and either extending or cutting the payments before June.
Up to one million Australians were put out of work as a result of the coronavirus crisis, leading to long queues out the front of Centrelink offices in the early days of the pandemic (Queues for Centrelink in Sydney on March 23, the day bars, cafes, gyms and pubs closed)
This graph shows the percentage of employees put out of work during the coronavirus crisis according to Deloitte modelling
A treasury review of the $130 billion scheme is underway - because it's running at $20 billion below where the federal government expected it to be.
'I need to stress again it was temporary lifeline put in place to help Australians through the worst of this crisis,' Mr Morrison said.
'It comes at a very significant cost, not just to current but to future generations as well. And it will be there to get us, to meet that objective, but it's not envisaged – never was – to be a longer term arrangement.'
Mr Morrison is interested in giving employers the opportunity to pay staff their usual wage if it is less than the JobKeeper payment, and using the rest for other costs
The economy took a hit following the closure of bars, cafes, pubs and restaurants
Australia's success in flattening the COVID-19 curve has triggered an end to lockdown conditions earlier than anticipated, with Mr Morrison hopes to have the economy firing again by June.
A second option the Morrison Government is considering includes covering 80 per cent of wage costs for businesses, regardless of their salary.
Deloitte's Chris Richardson says JobKeeper's also risks creating 'zombie firms' that neither fully recover or go bankrupt.
'Budgets should eventually return to normal once life returns to normal. But that will take time. Until then, federal and state governments should be in 'kitchen sink' mode. Full steam ahead, and damn the debt,' Dr Richardson said.
Australia could soon follow New Zealand's (PM Jacinda Ardern) current wage subsidy, which offers employers $585.80 per week for full-time staff and $350 for part-timers
New Deloitte Access Economics modelling estimates $8.1 billion could be wiped from the accommodation and food services sector in the months from April to August
