Treasurer Josh Frydenberg has indicated the government will unveil its new wage subsidy plan later today, in its latest and boldest effort to help businesses and their workers survive the coronavirus downturn.
The policy reportedly involves paying employers $1500 per fortnight for each employee they keep on over the next six months. It’s already been nicknamed the “job keeper allowance”.
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Mr Frydenberg did the rounds on morning TV today to hype up the announcement, along with the separate news that all foreign investments will now require approval from the government.
“Employers watching the show this morning – we want to work with you to keep staff employed,” he said on Sunrise.
“Keeping that connection between employer and employee is very important.”
The government’s forthcoming announcement has been pre-emptively compared to a similar wage subsidy scheme introduced by the United Kingdom, where Boris Johnson’s government is covering 80 per cent of businesses’ wage bills.
On Today, Mr Frydenberg downplayed that comparison.
“We are not adopting the UK system. We will have an Australian system and we will have one which is based on existing tax and welfare system mechanisms, because that is really important in getting money to people as quickly as possible,” he said.
Host Karl Stefanovic suggested “the devil is in the detail”, asking how exactly the new scheme would work.
“Karl, you will have to switch on later today,” the Treasurer replied.
“The key point here is we want to keep the employer and the employee formally connected, because on the other side of the coronavirus, we want businesses to bounce back stronger than ever. By having people still connected to their employer, that will help that recovery phase, as well as obviously through this process providing increased incentives for people to stay in employment.
“I think from an economic point of view it is important to support businesses who need to remain open to stay open, and it is important to provide that support to employees as well to get to the other side.”
Prime Minister Scott Morrison foreshadowed the wage subsidy announcement at both of his press conferences yesterday.
“The last (stimulus) package that we announced was about broadening and strengthening the safety net for those who are going to be immediately impacted by the shock of losing their jobs,” he said on Sunday morning.
“The next stage, which will be even bigger than anything you have so far seen, will go broader than that and ensure that we are working together with companies to keep people connected to those companies.
“This is part of the hibernation strategy of ensuring that we keep people connected with businesses and with their jobs so that on other side of this, Australia can bounce back stronger.”
He, too, brushed aside comparisons to the United Kingdom.
“We are being very careful to ensure that income support can be delivered in a way that gets it to people as quickly as possible using the existing systems that we have,” said Mr Morrison.
“When we do these things it is not a matter of just cutting and pasting ideas from other places. We need to have solutions that will work in Australia.
“You cannot just cut and paste somebody else’s system, because we have seen in many other jurisdictions that are putting these in place, they are having to rapidly redesign and change them. You have got to have more detail from the outset to ensure you have the most effective implementation.”
And the Prime Minister directly urged businesses not to make any decisions about their future until the new package was announced.
“I would say to employers, who I know are going through very difficult times, these changes will be announced soon. And I would ask that before you make any further decisions, that you take the opportunity to see the further measures that the government will be announcing,” he said.
A few hours later, after the National Cabinet meeting, Mr Morrison said the government would be “working through the night” to pull together the “next tranche in our economic supports”. What a delightfully bureaucratic turn of phrase.
“They can be there to support Australians in jobs and to keep them in jobs, and to keep them connected to the companies that will be there on the other side,” he said.
The other announcement flagged by Mr Frydenberg this morning was that temporary change to Australia’s foreign investment framework.
All proposed foreign investments into Australia will require approval from the Foreign Investment Review Board.
In normal times, there is a monetary threshold at which proposed investments must be reviewed. In simple terms, this change involves getting rid of that threshold while the coronavirus pandemic is ongoing.
During his appearance on Today, the Treasurer was asked whether the move was a “crackdown against overseas raiders”.
“We want to stop predators who are acting against the national interest. So we want to have scrutiny and visibility over all foreign investment proposals, regardless of their monetary value,” Mr Frydenberg said.
Stefanovic asked whether the change was motivated specifically by Chinese companies.
“This is not about one particular country, but about ensuring that the national interest is enhanced,” said Frydenberg.
“When you consider what is in the national interest, it is obviously national security grounds, it is the character of the investor, it is competitions issues, it is tax issues, and that is what I as the Treasurer and the Foreign Investment Review Board will assess every foreign investment proposal against.”
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