JobKeeper: Flawed but necessary

Policies, Publications & Submissions - July 14, 2023

As the voice for Australian workers, the ACTU and the Australian union movement advocated strongly for a wage subsidy program in response to the challenges of the Covid-19 pandemic. Knowing what we know now about the program, we remain strongly of the view that JobKeeper was indispensable to the health and stability of the Australian economy and of Australian workers.

As we argued at the time, evidence from overseas had shown that a wage subsidy program was necessary. We had already watched as job losses and stand-downs had spread across Europe and North America and as governments in those countries had responded with wage subsidy programs. There was every reason to believe that the Australian experience would be similar and that our solution should be based on what was already working. This was the basis for our early and ongoing advocacy for this program in the face of, at the time, inexplicable disinterest from Government.

The program that the Government produced, JobKeeper, was absolutely crucial in keeping Australians employed, connected to their employer and kept money coming in for many families. There should be no confusion that the program was desperately needed and that it helped us avoid the losses of hundreds of thousands, or millions  of jobs and the devastation that would have wrecked on the economy and the lives of millions of Australians. This does not mean however that the program was without flaw.

JobKeeper included a number of significant design flaws that meant that large groups of workers were left behind, including:

  • Casual workers,
  • Visa workers, and
  • Workers employed by certain types of employers.

Additionally, information which came to light after the program was beginning to wind down has also revealed that the mechanisms in place to target JobKeeper spending and to create accountability for that spending were inadequate. This resulted in large amounts of public money, billions of dollars, being inappropriately spent under the auspices of JobKeeper – going to employers who didn’t need it. A lack of action to recover this money, even from very large and profitable companies, exacerbated this issue.

JobKeeper also assumed that employers would take the responsibility of receiving public support for the welfare of their employees seriously. While this was the case for the vast majority, some unscrupulous employers took advantage of these assumptions to reduce leave balances and lay workers off.

These issues had real and substantial impacts on workers left out of the program and on the Australian economy – but should not be mistaken for a condemnation of the program’s basis or aspiration.

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