KPMG responds to government’s wage subsidy package
KPMG warmly welcomes the latest stimulus package.
The package was the right size given the scale of the challenge.
To me, really big measures are needed and this JobKeeper policy meets that need. The Australian Government’s $130bn JobKeeper Payment for Employees represents a strong response to the prospect of our economy going into hibernation to deal with the coronavirus health crisis.
KPMG has estimated the salaries and wages for employees in those industries most at risk from the changing trading conditions to be around $20bn per month. This suggests the size of the JobKeeper Payment package, while extraordinarily large in the history of government subsidies and support programs, is commensurate to deal with the extraordinary risks to the economy we are currently facing.
For me, the best thing about it is that the approach taken is simple. Some may argue that it is generous and question how long it will take to pay off. I believe it is appropriate for the circumstances we find ourselves in.
The payback will be tomorrow’s challenge – we acknowledge it will take several years to pay this amount back, but the alternative would be a much smaller and less functioning economy in the years ahead. The immediate focus has to be on getting people and the economy through the crisis.
I also like the fact it is good for women, in the way it has treated part time and casual workers, most of who are female. It is important that in the midst of crisis, we do not lose our sight of the need for gender equity.
Key elements of the package include flexibility, mutual obligations and fairness in eligibility, which have also been key features in the overarching framework being promoted by the Australian Government in responding to this health crisis.
This package should go a long way to provide comfort to workers who have already been stood down or look like their places of work will shut for a period of time. Certainty of income should also alleviate the potential follow-on societal risks that are associated with financial strain, including domestic violence, mental health and substance abuse.
The overall policy response to coronavirus has been proportionate on a step-wise basis. The colloquial “bridge to the other side” is being built by government, regulators, businesses and individuals, and this additional piece to the ‘puzzle bridge’ acts more like a bearer that anchors the bridge from both sides of this heath crisis.