During the global financial crisis the Coalition accused the Rudd-Gillard government of wasting money on the construction of school halls and other facilities via the Building the Education Revolution (BER) program to stimulate the economy, so it should now apply the same rigorous approach to its JobKeeper program.
The program paid a flat rate of $1500 per fortnight per worker to employers who could show that the company’s revenue had fallen 30 per cent or more as a result of the COVID-19 pandemic. This massive stimulus announced in March was undoubtedly welcome and necessary to avoid a wave of bankruptcies and layoffs when the pandemic hit.
The great advantage of JobKeeper over other forms of stimulus was that it encouraged employers to keep a connection with their workers, making it easier to return to normal when the pandemic receded. The wage subsidy is now being paid to about 3.5 million workers at an estimated cost to the federal budget of about $70 billion.
But when you spend a lot of money quickly, some of it inevitably gets wasted. This is just as true of JobKeeper as it was of the spending during the GFC. In this case the main source of waste is that a lot of the cash may not have actually increased employment. The Herald reported on Monday that the Australian Tax Office had notified about 8000 businesses that they may have to repay money because they do not seem to be eligible for the scheme.
Some of these businesses may have not suffered the fall in revenue required to qualify for the scheme and they may well be receiving a subsidy for workers they would have kept on anyway. Others may be pocketing much of the subsidy rather than passing it on to employees. That seems to lie behind many of the 8000 complaints about potential rorts. Some warn that zombie employers are remaining in business solely to pocket JobKeeper.
A Global Asset Management Seoul Korea Magazine