Invest
Government announces overhaul of JobKeeper and JobSeeker programs
The Morrison government will extend JobKeeper and JobSeeker beyond September, but eligibility will change as the government looks to reign in some of its spending, a Treasury update has revealed.
Government announces overhaul of JobKeeper and JobSeeker programs
The Morrison government will extend JobKeeper and JobSeeker beyond September, but eligibility will change as the government looks to reign in some of its spending, a Treasury update has revealed.
The overhaul was revealed on Tuesday, 21 July, prior to full details being released by Prime Minister Scott Morrison and Treasurer Josh Frydenberg in an economic update on 23 July.
“JobKeeper has been an economic lifeline to millions of Australians and that lifeline will be extended for those businesses that need it most,” Mr Frydenberg said.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg have announced that the current $1,500 per fortnight JobKeeper payment will be reduced to $1,200 per fortnight from 28 September, and $750 per fortnight for employees working less than 20 hours a week.
From 4 January, the rate will again fall to $1,000 per fortnight, and $650 for people working less than 20 hours a week.
The program will run to 28 March 2021, at a further cost of $16 billion, taking the entire JobKeeper program to $86 billion.
The changes to JobKeeper include two payment tiers to help align wages closer to pre-COVID incomes and a rebalancing of the $550 a week JobSeeker program.
“The review of JobKeeper found that the program has been well targeted to those businesses that suffered an average decline in turnover in April of 37 per cent compared to the same month last year,” Finance Minister Mathias Cormann said.
“What the review also found was that there were a number of features of JobKeeper that created adverse incentives which may become more pronounced over time as the economy recovers. This formed part of our considerations as we looked at the next phase of the JobKeeper program.”
Changing rates
The Treasury’s update revealed that one in four of the 3.5 million Australians on the JobKeeper program is currently benefiting from higher wages.
A quarter of those Australians with higher salaries are earning $550 more than they were before the COVID-19 shutdown.
It is understood that the government will adopt two payment tiers to more closely reflect the incomes of those who previously worked fewer hours.
“JobKeeper was designed to prioritise macro-economic support and speed and ease of implementation,” the Treasury said.
“However, JobKeeper has a number of features that create adverse incentives which may become more pronounced over time as the economy recovers.
“It distorts wage relativities between lower and higher-paid jobs, it dampens incentives to work, it hampers labour mobility and the reallocation of workers to more productive roles, and it keeps businesses afloat that would not be viable without ongoing support.”
About the author
About the author
Economy
Financial pressures and the 'she'll be right' attitude delay Australian divorces
In a revealing study, the Real Cost of Separation Report 2026 by Real Insurance has uncovered a trend of 'quiet uncoupling' among Australians, with financial pressures and concerns for children ...Read more
Economy
Labour market resilience provides RBA room for manoeuvre, says State Street economist
In the wake of the latest Labour Force data release, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and administration and US$5.5 ...Read more
Economy
Geopolitical tensions shape investor strategies in private markets
In the face of mounting geopolitical tensions, investors are honing their strategies in private markets, as revealed by the 44th edition of the Coller Capital Global Private Capital BarometerRead more
Economy
Ellerston sees investment shift as Middle East tensions ease and inflation persists
Amid signs of easing tensions in the Middle East with US-Iran peace negotiations progressing, albeit at a slower pace than desired by markets, investors are being advised to reevaluate their ...Read more
Economy
Global markets face stagflationary pressures amid rising inflation and diverging growth
In a recent macroeconomic report, the Franklin Templeton Fixed Income team has highlighted that global markets are increasingly encountering a stagflationary environment, characterised by intensifying ...Read more
Economy
Corporate capex provides solid footing for US equities, says ClearBridge
In a promising development for the US economy, corporate capital expenditures (capex) are playing a crucial role in supporting economic growth, according to Jeff Schulze, head of economic and market ...Read more
Economy
Brands turn to household care and laundry strategies to weather cost-of-living crisis
As the UK braces for a 13% hike in its energy price cap by July 2026 and US gas prices soar to a four-year high due to geopolitical tensions, the global spotlight is once again on the cost-of-living ...Read more
Economy
GDP data prompts State Street expert analysis on cash rate and trade surprises
In light of the latest GDP figures, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and/or administration and US$5.5 trillion in assets ...Read more
Economy
Financial pressures and the 'she'll be right' attitude delay Australian divorces
In a revealing study, the Real Cost of Separation Report 2026 by Real Insurance has uncovered a trend of 'quiet uncoupling' among Australians, with financial pressures and concerns for children ...Read more
Economy
Labour market resilience provides RBA room for manoeuvre, says State Street economist
In the wake of the latest Labour Force data release, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and administration and US$5.5 ...Read more
Economy
Geopolitical tensions shape investor strategies in private markets
In the face of mounting geopolitical tensions, investors are honing their strategies in private markets, as revealed by the 44th edition of the Coller Capital Global Private Capital BarometerRead more
Economy
Ellerston sees investment shift as Middle East tensions ease and inflation persists
Amid signs of easing tensions in the Middle East with US-Iran peace negotiations progressing, albeit at a slower pace than desired by markets, investors are being advised to reevaluate their ...Read more
Economy
Global markets face stagflationary pressures amid rising inflation and diverging growth
In a recent macroeconomic report, the Franklin Templeton Fixed Income team has highlighted that global markets are increasingly encountering a stagflationary environment, characterised by intensifying ...Read more
Economy
Corporate capex provides solid footing for US equities, says ClearBridge
In a promising development for the US economy, corporate capital expenditures (capex) are playing a crucial role in supporting economic growth, according to Jeff Schulze, head of economic and market ...Read more
Economy
Brands turn to household care and laundry strategies to weather cost-of-living crisis
As the UK braces for a 13% hike in its energy price cap by July 2026 and US gas prices soar to a four-year high due to geopolitical tensions, the global spotlight is once again on the cost-of-living ...Read more
Economy
GDP data prompts State Street expert analysis on cash rate and trade surprises
In light of the latest GDP figures, State Street, a global leader in financial services with a staggering US$54.5 trillion in assets under custody and/or administration and US$5.5 trillion in assets ...Read more