New stimulus program running billions of dollars short of JobKeeper

Treasurer Josh Frydenber  is isolating after being diagnosed with the virus sweeping Australia.

Treasurer Josh Frydenber is isolating after being diagnosed with the virus sweeping Australia. Photo: AAP

The Morrison government is pumping billions of dollars less into the economy during the current wave of COVID-19 outbreaks than it did during the first and second waves last year, new analysis shows.

As the Delta variant surges in New South Wales and daily case numbers continue to break national records, the income support offered by the federal government under the COVID-19 Disaster Payment is running at $277 million a week on average.

That is much less the $1.7 billion in average weekly payments flowing out of the door under JobKeeper, which peaked at more than $2.5 billion a week last May.

Services Australia data reveals 2.2 million claims have been made for the disaster payment, which Treasurer Josh Frydenberg and Prime Minister Scott Morrison claim is similar to JobKeeper.

The disaster payment pays $750 a week to those who have lost 20 hours or more of work during lockdown, which is equal to the top amount paid under JobKeeper.

But the wage subsidy scheme supported more than six million workers at its peak, or about three times the number of people paid under the disaster payment scheme.

Using data obtained by The New Daily, Deloitte Access Economics estimated the current level of government support is just a fraction of what it was in 2020.

The analysis found a little more than $5 billion was pumped into the economy in August, compared to about $18 billion in March and July 2020.

Source: Deloitte Access Economics (click to enlarge).

Support is expected to pick up in the coming weeks: The above data is based on money that has been paid to date, and not on pledged funding.

But Deloitte Access Economics partner Chris Richardson said the government was nevertheless pumping much less money into the economy now than last year.

This meant workers and businesses were having to overcome months of lockdown restrictions with far less support.

“We’ve done a more targeted version of JobKeeper this time around,” Mr Richardson told TND on Friday.

“We’re [also] well shy of the equivalent of the Coronavirus Supplement.”

The Morrison government has ruled out bringing back the $20 billion Coronavirus Supplement, which was paid last year to income-support recipients in addition to their regular payments.

Job seekers are currently being paid at rates below the poverty line.

Financial stress rises

As Australia stares down the barrel of a health crisis worse than at any point last year, advocates and unions are calling for a new JobKeeper.

On Friday, Lifeline chair John Brogden said JobKeeper must be revived to stem the tide of workers struggling to pay their bills during lockdown.

Mr Brogden said financial stress drove a record 3500 calls to Lifeline on Thursday, a 40 per cent increase on figures recorded only a year ago.

“We don’t have the certainty of JobKeeper,” he told ABC radio on Friday.

“It’s simple. People understand how it works and it provides an income.”

National Australia Bank data published on Friday found financial stress among households was getting worse, with rising concern around paying for food, utility bills, credit card repayments and other expenses.

“There is a growing economic divide as financial stress rose among low-income groups but fell for high-income earners,” NAB economists said.

“The gap [is] now at its widest point since Q1 [quarter one] 2020.”

Support levels plummet

The Morrison government spent about $251 billion to support Australia during the first and second waves of COVID-19 outbreaks, about $90 billion of which came through the JobKeeper program.

In comparison, about $3 billion has been spent on the COVID-19 Disaster Payments since June.

One positive is that workers can receive the disaster payment within a matter of hours whereas JobKeeper took weeks to receive.

The separate Pandemic Leave Disaster Payment scheme has also paid out about $54 million since last August to 36,000 people – mostly in Victoria.

In addition to this, several billion dollars in federal funding has been put into business packages in Victoria, NSW, Brisbane and the ACT since the latest Delta outbreaks started.

Services NSW data shows about $800 million has flowed from federal government coffers to businesses in the state since July 17.

Meanwhile, about $360 million to date has been paid in Victoria.

Independent economist Saul Eslake said it is understandable that lower levels of government support are being paid now than this time last year.

He said unemployment is lower today than during the COVID crash last April.

Last year about, 1.63 million more people were jobless or working zero hours for economic reasons, Mr Eslake’s analysis of ABS data found.

“The level of assistance being provided should be a lot less than it was this time last year,” Mr Eslake told The New Daily.

Source: Saul Eslake (click to enlarge).

Mr Eslake said the government also learned an important lesson about wastage from the JobKeeper program, under which billions of dollars went to businesses that did not need additional support.

As The New Daily revealed in March, more than 60 publicly listed companies received JobKeeper despite booking profits, paying investors or handing out executive bonuses.

Lower levels of government support suggest the economy will experience a slower recovery than it did after the recession last year, especially as consumers learn to live with COVID.

But Mr Richardson said Australia’s economy is now more dependent on the vaccine rollout than government financial support.

“The rebound in the economy is arguably now more linked to vaccinations than to government support,” he said.

Disaster payment could be wound back

Mr Frydenberg has also warned existing federal government payments could be wound back as vaccination rates approach 70 per cent in the coming months.

The federal government is hoping the economy bounces back under an agreement with states and territories to ease lockdowns once vaccines are offered to the entire population in early December.

“There should be no expectations that the Commonwealth will continue to provide emergency economic assistance … to the scale that we’re doing right now,” Mr Frydenberg told the ABC last week.

The Treasurer’s office was contacted for comment.

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