JobKeeper 2.0: Finance Minister rules out maintaining $1,500 rate

Finance Minister Mathias Cormann has ruled out retaining the JobKeeper wage subsidy at the current $1,500-a-fortnight rate beyond September, saying businesses have to get back to paying their workers out of their own incomes.

Parliament will today return from an extended winter break and prospective extensions to the JobKeeper and JobSeeker programs are on the agenda over the next two weeks of sitting.

The federal Labor opposition and a cohort of business lobbyists are urging the Morrison government to maintain wage subsidy payments at their current rate beyond September, arguing businesses, particularly those in Melbourne, are still struggling with the COVID-19 pandemic.

But speaking to the ABC’s RN Breakfast on Monday, Cormann ruled out any extension of the program beyond what has already been announced.

“We need to transition out of this historically unprecedented crisis level fiscal support back into a new normal situation,” Cormann said.

“In the end, we’ve got to get back to a situation where viable and profitable businesses pay for the wages of their business out of their income, not on the basis of taxpayer support,” he said.

“We’re going to have to let the economy adjust to the new normal, we’ve got to find out which businesses are going to be genuinely viable and profitable moving forward and able to pay for the wages of real jobs.”

While the federal government is trying to ween businesses off the payment, it has come under pressure over the imposition of coronavirus restrictions in Victoria, which has significantly impacted small businesses and sole traders.

From the end of September, JobKeeper will move to a new phase where payments will be split into two tiers — one at $1,200 a fortnight and another at $750 a fortnight for staff who’ve worked fewer hours.

That arrangement will last until January 3 next year, when another phase of the program will kick off, offering even lower payments of $1,000 and $650 a fortnight, respectively, until March 28.

Update: A previous version of this story muddled the JobKeeper phase two rates, this has now been corrected.

NOW READ: JobKeeper 2.0: Wage subsidies reduced but extended until March 2021

NOW READ: JobKeeper 2.0 Q&A: What will sole traders receive, can new workers join, and is the 20-hour rule flexible?