Scott Morrison ‘is considering paying new employees’ wages under a bold scheme to get thousands of Australians back into work after coronavirus’
- Scott Morrison is desperate to get the unemployment rate down after Covid-19
- The federal budget on 6 October will contain lots of measures to help create jobs
- One option is for the government to subsidise the wages of new employees
The federal government is reportedly considering fresh wage subsidies to encourage firms to hire new staff.
The federal budget on 6 October will contain a series of measures to get the economy back on track.
Scott Morrison (pictured at a steel factory last week) is desperate to get the unemployment rate down after coronavirus restrictions left a million Australians officially out of work in July
The federal government is reportedly considering wage subsidies to encourage firms to hire new staff. Pictured: Construction workers in Melbourne before lockdown
One option being considered is to encourage small and medium businesses to hire new workers by paying a chunk of their wages, government sources told The Australian.
This would be different to the JobKeeper scheme which pays companies to keep existing employees if they suffer a large hit to their revenue.
The government is also tipped to allocate up to $10billion to the states for infrastructure spending.
The AFR reported the cash could be dished out on a ‘use it or lose it’ basis, meaning states would need to prove they are spending it quickly to qualify for more.
The budget is also expected to bring forward income tax cuts to 1 July next year.
The cuts, originally due in July 2022, would increase the upper threshold for the 32.5 per cent marginal tax rate from $90,000 to $120,000 and increase the upper threshold for the 19 per cent rate from $37,000 to $41,000.
A spokesman for the Prime Minister told Daily Mail Australia: ‘We’re not engaging in budget speculation.’
The $1,500-a-fortnight JobKeeper payments are being reduced to $1,200 from 27 September and to $1,000 from January for full-time workers.
Mr Morrison on Sunday told the ABC that other measures will be introduced to complement the scheme as it is wound back.
The government is reportedly considering wage subsidies to drive hiring. Pictured: An electrician at work
‘What Treasury says is that we need to boost aggregate demand in our economy and the full suite of measures you have as a government need to do that job and that’s what the budget will do,’ he said.
‘And so you don’t have to hold on to every measure forever. There are other measures that come in and pick up from where others left off. We are transitioning JobKeeper, it’s important to do that. We always said it was not something that would be around forever.
‘But there are other programs and the Treasurer will go into greater detail about that obviously in the budget, which are dealing with the here and now, but rebuilding our economy and then building it for the future so we can go into a decade of prosperity.’
The jobless rate unexpectedly fell from 7.5 per cent in July to 6.8 per cent in August, bucking widespread predictions of a slight rise.
Roughly 111,000 people gained employment in August, the third month of exceptionally strong results.
Over half the massive jobs losses in April and May have been recovered.
However such strength masked a 42,400 drop in employment numbers in Victoria, where lockdowns remain.
Treasurer Josh Frydenberg, a Victorian MP, said businesses in the state were still hard hit by lockdowns.
‘I’m hoping and the prime minister is hoping those restrictions can be eased as quickly as it is COVID-safe to do so,’ he said.
How are the support payments changing from September?
* The $1,500 fortnightly wage subsidy will continue until September 27
* From the end of September to January, JobKeeper will be reduced to $1,200 for full-time workers and $750 for people working 20 hours or less
* From January to March, the full-time rate will be $1000 and part-time will reduce to $650
* Businesses turning over less than $1billion will have to requalify for the program at both stages through showing a 30 per cent drop in revenue.
* Businesses with more than $1billion in turnover have to demonstrate a 50 per cent fall
* The elevated unemployment benefit will remain at $1,100 a fortnight until September 24
* From that date until the end of the year the $550 coronavirus supplement will be cut by $300 to make the overall fortnightly payment $800
* People will be able to earn up to $300 without having their payment reduced
* The mutual obligation rules requiring people to search for four jobs a month will restart on August 4
* Penalties for people refusing a job offer will be reintroduced
* Job search requirements will increase in September when the assets test will also return
* The permanent JobSeeker rate to take effect from January next year will be announced in the October 6 budget.