The RBA begged the government for stimulus to kickstart the economy – to no avail. But coronavirus has seen a radical change in thinking
Katharine Murphy Political editor @murpharoo
Mon 30 Mar 2020 20.52 AEDT Last modified on Mon 30 Mar 2020 20.54 AEDT
Morrison made it clear why the government was acting on this scale. Events demand a new rulebook. We are all on the brink, Australia, and the rest of the world, and this Covid-19 pandemic has put us there. Photograph: Mike Bowers/The Guardian
This kind of investment is staggering – bigger than the annual health and education budgets combined.
We are losing a sense of the scale of these interventions because they are coming so thick and fast, the billions cascading into one another. But this is truly staggering.
You’d say the current behaviour displays all the zeal of the convert, and that observation would be entirely true and valid, except it doesn’t really deliver the required insight.
The only thing that stands between all of us and the worst-case scenario is continued physical distancing, and massive fiscal firepower.
“Many countries in the months ahead and perhaps beyond that may well see their economies collapse,” the prime minister warned reporters. “Some may see them hollow out in the very worst of circumstances, we could see countries themselves fall into chaos”. The prime minister insisted Australia would be different. “This will not be Australia.”
The government did not want to go down the path of wage subsidies initially. It resisted the idea. But with Australia’s two most populous states pulling inexorably in the direction of lockdowns, with employers screaming for help, and job losses mounting everyday, wage subsidies is where the centre of gravity ultimately rested.
Over the past week or so, Morrison has begun framing his conceptual task. He wants to put the economy to sleep for six months. In preparing for that end point, he wants to make sure as many people as possible remain connected to their livelihoods to try and prevent unemployment carnage on the other side.
"How deep is this fiscal hole and how do we begin to recover? Honestly, who knows, and right now that is the least of our problems.
If people can remain connected to their jobs, and if businesses can hibernate and return in the spring with as few accumulated liabilities as possible, then the economic damage associated with this event is more likely transient than permanent.
This is the working theory in any case, and it is sound as far as it goes.
The main problem is nobody knows whether the pandemic will conform to the arbitrary six-month timeframe the government is currently putting on it both for fiscal reasons and to try and manage the country through the various transitions of the crisis without creating panic.
Will Morrison be back here in another six months, with another $130bn?
How deep is this fiscal hole and how do we begin to recover in a budgetary sense after this shock? Honestly, who knows, and right now that is the least of our problems.
Business has largely welcomed Monday’s wage subsidy announcement, while reserving the right to nitpick as the proposal is turned into legislation over the coming week or so. There will be nitpicking, sure as night follows day.
From the point of view of employees, this will obviously be comfort.
Casual workers need to have been working regularly for same employer for 12 months or more to qualify for the new wage subsidy. How many casual workers will be in this position? Some will of course, but I suspect many casuals won’t, given the nature of casual work. New Zealanders in Australia are eligible for help but other workers on temporary visas aren’t. These poor people remain in limbo, at risk of destitution.
This scheme does give Australian workers a shot of seeing out this crisis while still remaining connected to their employers. That’s sound policy-making.
But there are no guarantees of what will happen after this pandemic passes. There is no guarantee employers will emerge from this crisis and roll back into business as usual, with their workforces intact, without skipping a beat.
In fact there is only one thing we can guarantee about this crisis.
Now that the JobKeeper Payment has passed Parliament, this is how it'll work
"Australia rescue package upped to 16.4% GDP" - could be more now.
This article is posted to illustrate what a conservative government is capable of when ideology is put aside. Morrison has made a point of saying, "There is no ideology in this."
Also in case some of you have not seen our pretty currency before. LOL
By political reporter Georgia Hitch
Posted yesterday at 11:37pm
Photo: The JobKeeper Payment will be made to eligible businesses for the next six months. (ABC News: Emma Machan)
It's expected to be accessed by about 6 million workers.
Before we get to some lingering questions about how the scheme is going to work, here's a quick recap of what it's offering:
* Businesses affected by COVID-19 can receive $1,500 per employee, per fortnight
* The businesses must pass the payment on to their staff
* The wage subsidy package is budgeted for six months
* As of Wednesday morning, 750,000 businesses had signed up and that number is growing
Am I eligible for JobKeeper?
There are a few specific criteria you need to meet, including that you're currently employed or were employed by your work at March 1, 2020. This includes anyone that has been stood down or re-hired since then.
You also need to be either a full-time or part-time employee or a casual worker who has been employed regularly with the same employer for more than a year.
And finally, you need to be either an Australian citizen, someone with a permanent visa, a Protected Special Category Visa holder, a non-protected Special Category Visa holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa holder.
It's also worth remembering you can only get the JobKeeper Payment from one employer.
Photo: JobKeeper is expected to help over 6 million people who've lost work because of coronavirus. (AAP: James Gourley)
The Government says the payment is essentially the same as any other kind of income you'd normally pay tax on.
It'll be paid to you by your employer not the Government, and so the same tax rules apply.
Another thing to note is that you won't be paid superannuation[SS in U.S.A.] for the payment.
But you will be paid superannuation for any other income from your employer that might be supplemented by JobKeeper.
On the other hand, if you are receiving the JobSeeker payment (previously known as Newstart) directly from the Government, you won't be taxed.
When will the payments start?
That depends on who you're working for.
The Government is urging all businesses who've signed up for the JobKeeper Payment to pay their staff the $1,500 a fortnight now, and claim the money back from the Australian Tax Office in May.
For some businesses, the restrictions introduced by the Federal Government mean they either can't offer the goods or services they usually would, or only in a limited way, like cafes doing takeaway services.
In these cases, employees may not have to work at all or may work reduced or modified hours, but will still receive the JobKeeper Payment.
Photo: The JobKeeper Payment will be given to businesses to help employees for the next six months. (ABC News: Jessica Hinchliffe)
What if I'm already getting government benefits?
If you're receiving the JobSeeker payment you can't also receive JobKeeper.
But the Government is encouraging people not to withdraw any applications for JobSeeker if you've already put yours in.
Given you have to report your income for the JobSeeker payment anyway, it says the Tax Office will work out which one you should receive.
If you're getting a different kind of Government benefit like the student-only Youth Allowance and have also been stood down from your job, you should be able to receive JobKeeper.
But if the $1,500 is more than you'd usually earn in a fortnight, it might impact how much you get from your other allowance.
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