Senate COVID-19 committee calls on Josh Frydenberg to explain JobKeeper ‘blunder’

By Shannon Jenkins

May 25, 2020

budget 2020
Treasurer Josh Frydenberg (AAP Image/Mick Tsikas)

Treasurer Josh Frydenberg has defended the government’s JobKeeper scheme amid calls for him to appear before the senate committee overseeing the government’s response to the coronavirus pandemic.

The government on Friday revealed the wage subsidy scheme would cost $70 billion rather than $130b, covering 3.5 million people rather than the forecast 6.5m.

On Sunday the chair of the Senate Select Committee on COVID-19 , Katy Gallagher, said the group would call on Frydenberg to “explain the massive $60b JobKeeper blunder”.

He would be asked to appear before the committee before parliament returns in June, she said.

“There are serious questions that need to be answered by the treasurer about the government’s economic response, particularly as it is now clear that 3m fewer Australians are being assisted by JobKeeper,” she said.

“The treasurer must accept responsibility and he should do the right thing and accept the committee’s invitation to appear and explain what went wrong.”

Labor senator Penny Wong has described the incident as a “$60b black hole in the economic credibility of the Morrison government”, backing Gallagher’s call for Frydenberg to appear before the COVID-19 committee.

On Monday the treasurer took to The Australian to defend the scheme, putting the “regrettable” incident down to two errors.

“First, Treasury’s forecast made at the high point of the pandemic here, that 6.5 million workers would be covered by the program, has been revised downwards to 3.5 million in light of progress on the health front and less stringent restrictions being put in place,” he wrote.

“Second, a reporting error in business data reported to the ATO led to an incorrect estimate by the ATO of the number of people expected to be covered by the program. While regrettable, it had no consequences for payments under the scheme.”

Frydenberg argued that “any opportunity to keep debt lower is welcomed”.

“The reduced number of people on JobKeeper is also a positive sign for the economy as more people remain in work without the need for support from the government,” he wrote, maintaining that the government wouldn’t be making any major changes to the eligibility criteria under the scheme.

Last week Treasury secretary Steven Kennedy said he wasn’t “particularly concerned” about Australia’s debt, and had instead been focusing on the rising unemployment rate, which he has estimated to be about 15%.

READ MORE: Australia ‘looking pretty good’ amid global gloom, says Steven Kennedy

Labor, the Greens, unions, and advocacy groups have called for the JobKeeper scheme to be extended to casual workers and temporary visa holders, including international students, while the Tasmanian Premier wants the extra funds to be directed towards struggling industries.

“Now that it is apparent that it will cost significantly less than first thought, the scheme should be extended for a longer period targeting additional support at those industries such as tourism and hospitality that will take longer to recover,” Peter Gutwein said on Saturday.

“Furthermore, as there is significant additional capacity available, the Federal government should also consider further support for job rich infrastructure projects that support the national interest such as Battery of the Nation and the Marinus Link. I’m certain that most states and territories will be of a similar view and I look forward to discussing this with national cabinet when we meet this week.”

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