Prime Minister Scott Morrison has announced a new support package worth a historic $130 billion, aimed at helping employers retain their staff.
Under the new package, the government will subsidise wages with a flat fortnightly “JobKeeper” payment of $1,500 per employee.
The payment will apply to businesses that have experienced a 30 per cent reduction in turnover as a result of the coronavirus (COVID-19) pandemic.
Businesses with an annual turnover of over $1 billion may also be eligible for the support but must demonstrate a reduction in turnover of at least 50 per cent.
The support will be available to full and part-time workers, sole traders and casual workers – the latter of which must have been employed for at least 12 months.
Effective immediately, employers and sole traders will be able to apply to the Australian Taxation Office (ATO) for wage assistance for workers on their payroll since 1 March 2020.
The government will commence payments in the first week of May, with the subsidies to be back-dated from 30 March.
Employees stood down after 1 March will also be eligible for the wage subsidies.
The payment will provide the equivalent of around 70 per cent of the national median wage. However, the Prime Minister suggested that, for workers in the accommodation, hospitality and retail sectors, it will equate to a full median replacement wage.
It is expected to subsidise the wages of approximately 6 million people.
‘Now is the time to dig deep’
Prime Minister Morrison said the historic measures are appropriate, given the gravity of the current crisis befalling Australia.
“Now is the time to dig deep. We are living in unprecedented times, with the twin battles that we face, and we fight against a virus and against the economic ruin that it can threaten,” he said.
“This calls for unprecedented action – governments making decisions like they never have before, and [our] government has made a decision [that] no government has made before in Australia in response to crises such as these. I hope and pray that they never have to again.
“In the past, on so many occasions, they couldn’t, but today we can, today we must, and today we will.”
Mr Morrison warned that the absence of such measures could cause significant harm to the Australian economy.
“Our goal is to protect the lives and livelihoods of Australians, to protect and preserve the very economy that we will depend on so significantly in the months ahead and on the other side, as well for the generations that will follow us out of this,” he continued.
“Many countries in the months ahead and perhaps beyond may well see their economies collapse. Some may see them hollow out, and in the very worst of circumstances, we could see countries themselves fall into chaos.
“This will not be Australia.”
Treasurer Josh Frydenberg added the subsidy comes as the country braces for one of the toughest times in Australian history.
“Businesses will close and people will lose their jobs. That is why we have doubled the welfare safety net,” the Treasurer said.
“However, today we are going even further. Australians know that their government has their back.
“That is why we are delivering a historic $130 billion JobKeeper payment to support businesses and to help Australians in a job.
“This will keep Australian workers connected with their employer and provide hope and more certainty during these difficult and challenging times.”
This new stimulus package builds on a raft of measures announced by the government this month in response to the increasingly evident economic impact of the coronavirus outbreak.
The government’s actions have included measures to stimulate the flow of credit to households and businesses and provide income support for low-income households.
When including financial sector assistance from the Reserve Bank of Australia, the government’s stimulus support totals over $320 billion – equivalent to over 16 per cent of GDP.
Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.