Error in JobKeeper coronavirus payment will provide both relief and grief for Federal Treasurer

With Josh Frydenberg staring down the barrel of the biggest budget deficits in Australian history, getting a call on Thursday night from the Treasury Secretary saying he’s found $60 billion down the back of the couch gives the man holding the nation’s tattered chequebook a modicum of relief.

It’s a massive amount of coin and will give the books a considerable boost as the Government plots a course out of the coronavirus economic slump.

But the bureaucratic bungle which revealed Treasury had over forecast the impact of the JobKeeper wage subsity program also opens the Federal Government to demands it needs to be more generous.

The original bill was to be $130 billion, and more than 6 million workers would be supported. It’s now clear only $70 billion will be spent and 3.5 million employees given a financial leg up.

On a more basic level, the Government’s critics will use this episode as an example of general administrative incompetence, wondering how the alarm bells weren’t ringing in Treasury and the ATO when businesses registering for JobKeeper were making mistakes in the form.

That, and why no-one stopped to think the numbers should perhaps have been lower given Australia was not hit as hard by the virus as the Government had anticipated when it did its original calculations, will also need to be addressed.

It’s not like they simply forgot to carry the one.

The ATO and Treasury believe it was 1,000 businesses that caused the error but no doubt the boffins behind the scenes are scrambling to check, and double-check, their maths to make sure their future forecasts are watertight.

The departments have put the error down to the fact that they were busy shovelling millions to the people that actually were eligible, but whether that reasoning stacks up will no doubt be debated at length in the weeks and months to come.

Putting aside (just for a moment) the administrative muck-up, the Federal Government will be hit with a refreshed campaign to expand which workers benefit from the support scheme.

That issue has been bubbling away ever since JobKeeper was announced at the end of March, as the nation’s businesses grappled with new coronavirus lockdown rules sending them to the wall.

Casual workers, staff in the university sector and the nation’s creatives left floundering by the shutdown of the arts industry are among those on the list of potential beneficiaries if the scheme was adjusted.

Labor has been lobbying for those tweaks, even though the party backed JobKeeper through Parliament at the height of the crisis – Anthony Albanese not wanting to let “the perfect be the enemy of the good” at a time when the country was being hit by the twin health and fiscal threats posed by COVID-19.

Given the Government had already planned on spending $60 billion more than is now needed, the argument will be that there’s no point writing that spending off as a happy symptom of an economy not struggling as much as had been feared.

In other words, Josh Frydenberg should just press on and spend, spend, spend.

His Assistant Treasurer, Michael Sukkar, was the Government’s frontman on Saturday when those questions were being thrown around and downplayed any suggestion JobKeeper could be opened up to more Australians.

“The money, as I said, is borrowed money,” he told Channel Seven.

“It’s not a pot of money, sitting there just waiting to be spent and waiting for the Government to decide how to spend it.

“The parameters of the scheme are broad.”

Mr Sukkar was grilled about eligibility for the scheme by the ABC’s Raf Epstein on May 14, just a week ago.

“You and I would perhaps be having a different conversation today if you said to me ‘Michael, there are only 3 million employees who are covered, it’s half what we expected?’ In that case, I would be saying to you, ‘yeah, look, there’s more of a likelihood of wholesale changes’…”

A review of the program is due next month and the Government appears keen to manage community expectations ahead of that – using whatever the findings are to justify any changes into the future, rather than jumping at its newly found, slightly less debt-laden status.

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