Prime Minister Scott Morrison has taken responsibility for a $60 billion JobKeeper miscalculation but dubbed an effort to demand answers from the Treasurer a political stunt.
- The Government has revised JobKeeper from costing $130b to $60b
- Labor is demanding answers from the Government about the overestimation
- It wants the Government to expand JobKeeper to include more workers
The Opposition earlier on Sunday confirmed a Labor-led coronavirus parliamentary committee would seek to compel Treasurer Josh Frydenberg to explain how the Federal Government overestimated the JobKeeper wage subsidy program by $60 billion.
The Government had said more than 6 million workers would receive its $1,500 fortnightly wage subsidy but on Friday it was forced to concede it would only cover about half that number.
“So sure, the estimate was overstated and the process with the [Australian] Taxation Office to keep us updated on that had a flaw in it,” Mr Morrison said on Sunday.
“We acknowledge that, I acknowledge that and ultimately I have to take responsibility for those things.
“But what it means is Australians won’t have to borrow as much money. This is not money that is sitting in the bank somewhere, this $60 billion, that is all money that would have otherwise had to be borrowed.”
Mr Morrison said the Treasurer called him on Thursday night to tell him about the mistake.
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Opposition Senate Leader Penny Wong said a COVID-19 committee examining Government measures in response to the coronavirus wanted to quiz the Treasurer about the mistake revealed on Friday.
“Josh Frydenberg hasn’t fronted up and taken responsibility,” she told Insiders.
“He should do that and we will give him the opportunity.
“The chair of the Senate Committee into the COVID-19 response of the Government, Senator [Katy] Gallagher, will call Josh Frydenberg to give evidence at that committee and what I would say to Josh: ‘This is your opportunity to front up and explain $60 billion blunder to the Parliament and to the Australian people’.”
The JobKeeper program was initially costed at $130 billion, making it the single biggest piece of Government spending in Australian history.
On Friday, the Treasury Department and Australian Tax Office revised that to 3 million workers, blaming businesses for making “significant errors” in their applications.
The estimated cost of the program has been nearly halved from $130 billion to about $70 billion.
The mistake occurred on 1,000 businesses’ applications, representing just over 0.1 per cent of the 910,000 businesses that have registered for JobKeeper.
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On Friday, Mr Frydenberg said the error was “good news” and had been picked up before it had any consequences for JobKeeper payments the Government had already paid.
“It is welcome news that the impact on the public purse from the program will not be as great as initially estimated,” he said.
Senator Wong said the program being $60 billion cheaper meant the Government should adopt Labor’s calls to expand the program to include more casuals.
Casual workers are only eligible for the program if they have spent more than a year with one employer.
But Mr Frydenberg dismissed those calls and insisted the Government would not reallocate the $60 billion.
Instead, he said it meant future generations would not have as much debt to pay back.
The Government initially expected JobKeeper would cost $130 billion, $60 billion more than needed.(ABC News: Nick Haggarty)
The Government will review the JobKeeper program next month. It had planned to do that even before the miscalculation was detected.
JobKeeper and JobSeeker, which was previously called Newstart, are expected to support 5 million people for six months.
In September, JobKeeper is due to end and JobSeeker halved to its previous rate before the pandemic $550 a week.
But Mr Morrison has hinted there may be Government support beyond the expected JobKeeper end date.
“I welcome the fact that the demand for the program has been less than what Treasury estimated,” he said.
“There are many challenges that the economy will face beyond September and there are particular sectors that will feel this for longer, particularly those who are dependent on international [travellers].
“We know that and we understand that and we will be considering that.”
PM dubs compelling the Treasurer a ‘political stunt’
The Senate committee is unable to force Mr Frydenberg to face its questions.
But Labor points to Scott Morrison having fronted a similar committee before he became Prime Minister as precedence for ministers to follow.
“We have been told by the Government that everything about this response has been unprecedented,” Senator Gallagher said.
“Well, the $60 billion bungle is also unprecedented and the Treasurer is the architect of that.
“It goes straight to the heart of his credibility and competence and I would have thought he would have welcomed an opportunity where he is given the opportunity and a platform to explain what went wrong and what the Government is doing about it, and how could we have all been so misled for the past eight weeks.”
Mr Morrison said Labor knew when it set up the committee that it would be unable to compel ministers from the House of Representatives to give evidence.
“I think to now try and change the rules is a bit of a political stunt,” he said.
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Leaders keen for JobKeeper extension
State and territory leaders from across the political divide want the Federal Government to use the mistake to expand the JobKeeper program.
Tasmanian Liberal Premier Peter Gutwein said JobKeeper was an “excellent program” and that he wanted it expanded to offer targeted support to the tourism and hospitality industries beyond the six-month end date.
He said he hoped National Cabinet would discuss the matter at its next meeting on Friday, a sentiment NT Labor Chief Minister Michael Gunner shared.
Mr Gunner said while Mr Morrison had done a “great job” in the crisis, he feared a “JobKeeper cliff” if the program wasn’t extended beyond September.
“It’s keeping people out of the dole queue right now,” he said.
“The crisis won’t be over in a few months, this is a long road.
“So if we can keep JobKeeper for longer, we should. Industries like tourism and hospitality have been hit hard, so if it needs to be targeted, let’s make sure we look after them.”
ACT Labor Chief Minister Andrew Barr said the mistake strengthened the case for JobKeeper to be extended to industries hardest hit by ongoing public health restrictions.
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