UK-style wage aid isn’t the answer, insists Mathias Cormann

Finance Minister Mathias Cormann says the government is working on further support measures.

Finance Minister Mathias Cormann says the government is working on further support measures. Photo: AAP

Finance Minister Mathias Cormann doesn’t believe a UK-style wage subsidy is the best way to protect workers who have lost their jobs.

Mr Cormann says the federal government will announce alternative stimulus measures within the next few days.

Business and unions have urged the government to consider UK Prime Minister Boris Johnson’s 80 per cent wage subsidy aimed at keeping people employed during what could be a prolonged coronavirus crisis.

Queensland’s Deputy Premier Jackie Trad is joining has joined the call for the Australian government to pay the wages of workers as claim for unemployment benefits skyrocket.

“If we don’t have a compassionate and effective way to respond to this, as opposed to the long queues outside Centrelink … then I’m afraid there’s going to be huge amounts of social dislocation,” Ms Trad told the ABC on Friday.

But the Australian government has repeatedly baulked at the idea.

“No, we will not look at a UK-style system because in an Australian context that just wouldn’t work,” Senator Cormann told Sky News on Friday.

He said the country was looking at six months of economic disruption from COVID-19, so support needed to get to people “as quickly as possible”.

“If we came up with a completely different system, a completely different approach and had to start up a system from scratch it would take us way too long to get that into the community.”

But he said the government continued to assess ways to improve levels of income support, while further expanding support and incentives for business to hold on to staff.

“We would expect an announcement in the next few days,” he said.

A survey conducted by the Australian Bureau of Statistics, released on Thursday, showed almost half of all Australia’s businesses have felt the impact of the coronavirus and four out of five expect to be hit in coming months.

Thousands of workers have already lost their jobs in the past week alone as the impact of virus bites.

The hospitality, travel and retail sectors have had the bulk of the casualties with outdoor leisure equipment Kathmandu adding to the dole queues on Friday by standing down 2000 workers. Other outdoor retailers are likely to follow suit.

Labor has been particularly critical of the length of time improved unemployment benefits are getting into people’s hands under the government’s current stimulus package.

The coronavirus supplement – paid at a rate of $550 per fortnight – will effectively double the JobSeeker payment, which recently replaced the Newstart allowance.

But the supplement won’t reach sacked workers until April 27.

The second payment won’t be paid until July 10, while pensioners and families will have to wait 16 weeks for the payment.

Senator Cormann defended the timetable, saying making payments of this magnitude to so many people is a significant logistical exercise.

“We have got to make sure we get this right,” he said.

“Logistics is what is driving the timetable … we are working as fast as we can and we are working to the tightest possible deadlines.”

with AAP

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