Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Tuesday, 21 July 2020
QUESTION: Minister, the long awaited review into JobKeeper and JobSeeker, we will see a little bit of that today. Will the report be released in full?
MATHIAS CORMANN: Yes, it will be.
QUESTION: And what will that report tell Australians who have been waiting on the review?
MATHIAS CORMANN: The Treasury review found that the JobKeeper program met its objectives. If I can go back to what we were trying to achieve, we wanted to support businesses through this period to survive, we wanted to save jobs, we wanted to keep people connected to their employer and we wanted to provide income support into the economy in order to provide macroeconomic support. On all of these counts the JobKeeper program has been successful. It has gone through the businesses that genuinely needed that support. On average about a 37 per cent drop in turnover for those businesses that accessed the JobKeeper payments. All things considered, accepting that this was a very difficult period, continues to be a very difficult period, the program has worked as intended and Treasury has recommended with some adjustments for it to be extended for a further period.
QUESTION: The review points to it being a disincentive in some cases for people to search for full time work, it also points to effectively propping up some businesses that might otherwise fail. Does that mean that between now and March, some businesses will fail?
MATHIAS CORMANN: We said at the outset back in March that the economic impact of this coronavirus crisis is such that we cannot guarantee that all businesses will survive and that all jobs would be saved. Clearly that is not something that we can possibly promise. Moving forward that situation is still the same. We are dealing with the devastating economic impacts of a global pandemic all around the world, including the negative impact of this pandemic here in Australia. We do now need to find the best possible transition into a new normal. We need to ensure that ultimately, on the other side of this transitional support, that we get back into a situation where businesses, viable, profitable businesses are able to pay the wages of their employees out of their income rather than having to rely on taxpayer funded support. This support was necessary. We will continue to provide it for a further period, but ultimately this is not something that we can continue to do on an ongoing basis.
QUESTION: The JobSeeker supplement would be extended for another six months. Will the base rate of JobSeeker also be boosted so that people do not go back to that $40 a day rate?
MATHIAS CORMANN: JobSeeker will be extended. It will continue for six months from the beginning of July. So it will be extended from the end of September to the end of the year at an elevated rate, though at a lower elevated rate. The ongoing arrangements for JobSeeker payments beyond that will be a matter for the Budget.
QUESTION: When did the decision to tier and extend JobKeeper take place because all of the messaging until recently was that there would be no JobKeeper as we knew it after September?
MATHIAS CORMANN: What we said is that JobKeeper in its current from would not continue beyond the end of September and that is the case. JobKeeper in its current form will continue until the end of September, but not beyond that. After the end of September, the JobKeeper payments will be at a lower rate and it will be a two tiered payment based on the number of hours worked. We always knew when this payment was first introduced that some people were likely to get higher payments than they ordinarily would under their normal working arrangements. But because there was a need for speed and a need for simplicity to get this economic support to business and to working Australians as swiftly as possible, that was a trade-off that we accepted at the time, but for this further period now from the end of September onwards, we will be making those adjustments.
QUESTION: Just to clarify, on JobSeeker you are saying that is six months from now until the end of the year?
MATHIAS CORMANN: JobSeeker will be extended for a further period to the end of this year, to the end of December and the ongoing arrangements beyond that will be a matter for the Budget.
QUESTION: But the $550 a fortnight, that will not change until after September?
MATHIAS CORMANN: For both JobKeeper and JobSeeker the current payment levels will continue until the end of September and then from the end of September, both of them will be extended for a period at a lower rate and the specifics of all of these matters will be announced by the Prime Minister and the Treasurer later today.
QUESTION: So the second round of JobKeeper will go until March, the second round of JobSeeker is going to December, the end of this year?
MATHIAS CORMANN: Yes.
Thank you very much.