The Commonwealth government's proposed JobKeeper wage subsidy scheme represents an important and promising response to the COVID-19 shutdown of several key sectors of Australia's economy. The scheme would support an estimated $130 billion worth of wage payments over the coming 6 months, keeping millions of Australians in jobs even if their employers experience major revenue losses from the restrictions that have been imposed on activity, mobility, and work during the pandemic.
However, the program as originally proposed contains several design flaws that will seriously undermine the effectiveness of the program if they are not fixed.
These include, most prominently, the arbitrary exclusion of over 1 million casual workers (those who have not been continuously employed by their current workplace for at least 12 months), over 1 million foreign visa workers (other than New Zealanders on special 444 visas), and many thousands of temp and day-hire workers in industries such as arts, film, and construction (whose employers technically no longer exist).
Our partners at the Australia Institute recently conducted polling of Australians regarding these exclusions in the JobKeeper program. An overwhelming majority of respondents, from all political persuasions, support making the program available to all casual workers regardless of their tenure with their existing employer. 81% of respondents support extending the wage subsidy to all casual workers.
For a full breakdown of the polling results, please see the Australia Institute's full report.
Other concerns with the government's proposal include the possibility that employers could compel workers to draw down paid annual leave even while their wages are being largely or fully covered by government, and the risk that employers would use the program's $1500 per fortnight benefit level to push down wages or unilaterally alter hours of work.
These concerns in the proposed program design can and should be corrected by government, in order to maximise the potential positive effects of the scheme in preserving employment and income levels.
Please see our summary table of the 'pros and cons' of the JobKeeper program as initially proposed by government, or download and share the table in pdf format here.