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Restrict JobKeeper? Ya Dreaming! Political suicide

Thursday, May 14, 2020

There’s media speculation doing the rounds that the JobKeeper scheme could be cut back.

Our assessment is that it would be political suicide for Prime Minister Morrison if the government took such a move. The PM is running high in the polls over his handling of Coronavirus, a dramatic turnaround from the political disaster that he and the government suffered during the bushfire crisis earlier in the year.

On key measures the Morrison Government’s handling of the Coronavirus crisis, in conjunction with the States, is impressive.
  • Australia has had 98 Coronavirus deaths so far (14 May). If we’d had a similar population-to-death ratio as the UK, our death tally would have been somewhere around 12,000.
  • The Cornovirus support package of Jobseeker, JobKeeper and Cash Flow Support is a world leader. And the fact that self-employed people have equal access to this support is a massive leap forward in recognising the critical importance of the 2 million-plus self-employed people to society and the economy.
  • Australia is now taking the early, cautious steps out of lockdown. There is a prospect that our domestic economy could reawaken ahead of other global economies. And further that Australia’s reputation as a safe haven for investment and a highly desirable place to live could be enhanced.
Yes some ‘clarification’ of JobKeeper has occurred. For example:
And we have some issues on the Coronavirus package that require more clarification. For example
  • It’s possible that some self-employed people who receive the Cash Flow Boost may not be entitled to it. We’re concerned that in the future the ATO may demand repayment with penalties and interest. We wrote to the Treasury on this on 1 April.
  • Sole traders who have a salary as well don’t seem to be entitled to JobKeeper. We’ve written to the ATO on this.
But even with issues needing ‘clarification’ the JobKeeper package is impressive. Compared to:
On both of these measures the JobKeeper scheme is considerably better.

What the Morrison Coronavirus package does is provide a platform for small business, self-employed business recovery. If the government were to mess this up in a big way, they would threaten small business recovery. Further, they would induce a view of them as being two-faced con artists. The political backlash, we think, would be large. We don’t think the Morrison government has a self-destructive urge in this respect.

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