Income support WILL continue past JobKeeper’s planned end date says Scott Morrison

Scott Morrison has confirmed pay subsidies and more help than usual for the unemployed will continue once coronavirus welfare programs expire in September.

As five million Melburnians re-enter lockdown for six weeks, the Prime Minister is considering what to do with JobKeeper wage subsidies and the temporarily doubled JobSeeker dole.

‘Where there is the need, there will continue to be the support,’ Mr Morrison said.

Treasurer Josh Frydenberg is expected to outline a rejigged job support plan alongside an economic update on July 23.

He is also considering bringing forward legislated personal income tax cuts to stimulate the economy.

Scott Morrison has confirmed income support for those impacted by the pandemic will continue after JobKeeper ends in September

The next stage of the tax cuts – delivering a 19 per cent rate to everyone earning less than $40,000 – is scheduled to start in July 2022.

What you get back

Those earning $21,000: $87

$22,000 to $30,000: $255

$40,000 or just above minimum full-time wage: $580

$50,000 to $80,000: $1,080

$90,000: $1,215

$100,000: $1,665

$120,000 to $200,000: $2,565

Source: Treasury budget paper from April 2019 comparing tax relief scheduled for 2022-23 financial year with 2017-18 

The final and most expensive stage, which would lead to everyone earning between $45,000 and $200,000 paying just 30 per cent tax, kicks in from July 2024.

‘We are looking at that issue, and the timing of those tax cuts, because we do want to boost aggregate demand, boost consumption, put more money in people’s pockets and that is one way to do it,’ he told ABC radio.

Victorian Premier Daniel Andrews is confident the twin pandemic payments will be extended, saying the prime minister understands there will be more hardship and pain in his state.

‘I’m confident there will be support there,’ he told the Nine Network.

The Melbourne lockdowns will cost the state economy $1billion a week and send shockwaves across the country, with Victoria accounting for a quarter of Australia’s economic output.

‘This is a serious impediment to the speed and the trajectory of the nation’s economic recovery, not just Victoria,’ Mr Frydenberg said.

Shadow treasurer Jim Chalmers said the Victorian lockdowns must be taken into account when the economic update and JobKeeper review are released.

‘This outbreak and these necessary new restrictions come with even more uncertainty for businesses and their workers, making the case for clarity on the future of JobKeeper even more urgent,’ he told AAP.

Treasurer Josh Frydenberg is expected to outline a rejigged job support plan alongside an economic update on July 23

Treasurer Josh Frydenberg is expected to outline a rejigged job support plan alongside an economic update on July 23

‘Scott Morrison has only added to the uncertainty by delaying the release of his secret JobKeeper review.

‘The government should better target and taper support, but shouldn’t turn off the tap when businesses are struggling with new restrictions.’

More than 800,000 loans worth $260billion have been deferred throughout the pandemic.

The banks are offering to extend the six-month deferrals for another four months, but only for customers who genuinely need emergency assistance.

‘Banks are pledging to make sure that no customer falls off a cliff at the end of that six months,’ Australian Banking Association chief executive Anna Bligh said.

Melbourne has been placed in complete lockdown for six-weeks as it battles community transmission. Pictured are police in North Melbourne

Melbourne has been placed in complete lockdown for six-weeks as it battles community transmission. Pictured are police in North Melbourne

‘Where the customer is unable to pay anything because they’re still affected there will be an extension of another four months.

‘Those that can make repayments at the end of six months, they can start doing so.’

Financial services regulator APRA has also provided relief to encourage banks to restructure loans.

These options include extending the term of the loan or temporarily moving to interest-only repayments.

Westpac chief economist Bill Evans is now predicting the federal government will have to spend another $24billion extending JobKeeper wage subsidies until June 2021.

‘Those industries that are going to be affected by the extension of social distancing, by the extension of foreign travel restrictions will get an extension in JobKeeper,’ he said.

The $70billion JobKeeper program was due to end on September 27, ending the access of 3.3million workers to $1,500 a fortnight until shuttered businesses can reopen.

Mr Evans said one million of those workers would need to continue receiving JobKeeper benefits until Christmas.

In the New Year, 500,000 of them would need to stay on JobKeeper for another six months, including 315,000 in hospitality, 125,000 in the arts and 50,000 in aviation.

Westpac is now forecasting a budget deficit of $240billion for 2020-21, as the government brought forward $15billion worth of tax cuts planned for July 2022.

Australia’s net debt will climb to 37 per cent of gross domestic product, up from 19 per cent of GDP in June 2019.

‘We are not unique in the way we are dealing with this problem – our numbers are broadly comparable with the rest of the world but nevertheless extraordinarily eye-popping numbers indeed,’ Mr Evans said.

Westpac also called for the JobSeeker unemployment benefit – the standard ‘dole’ – to be permanently raised when the $550 coronavirus supplement, on top of the usual $565.70 fortnightly payment, ends on September 24.

The bank is advocating a $284.30 a fortnight increase that would take JobSeeker to $850, marking the first rise in the dole beyond inflation since 1994.

This would cost $11billion a year to the budget.

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