Wed. Aug 10th, 2022

The Treasury considered introducing a three-month clawback mechanism for job keepers in the wage subsidy scheme, but chose not to change the rules because it would have “reduced the overall level of activity and dampened the recovery”.

The Scott Morrison government has been criticized for providing generous support to companies that increased profits and revenue during the pandemic – as opposed to the coalition’s more punitive approach to chasing welfare debt.

A new report from Treasury – which analyzes the first six months’ job keeper – acknowledged that $ 11.4 billion. And $ 15.6 billion. In the quarters of June and September of 2020 were paid to companies whose revenue did not fall by the required 30% or 50% compared to a year earlier.

Of this, the Ministry of Finance’s report found DKK 13.8 billion. Dollars to companies with a revenue increase over a year earlier. About $ 6.8 billion And $ 6.4 billion. In June and September, respectively, were paid to companies whose turnover fell, but not by the required amount.

The jobkeeper program required companies to assess whether their revenue would decline by 30-50%, depending on their size, but no clawback provision was included to get money back from those who exceeded expectations.

Treasury says at least $ 4.9 billion. Of the $ 13.8 billion that was paid to companies with higher revenue throughout the year, went to growth or changing companies. “These companies were allowed to use another test to determine their eligibility for the job to more accurately reflect the size of the company at the onset of the pandemic,” Monday’s report said.

Guardian Australia has confirmed that there was significant debate within the Ministry of Finance three months inside the program on whether to repay payments from companies that performed better than expected.

But officials ultimately discouraged this approach in part because the subsidy carried out most of the heavy lifting in the Morrison government’s fiscal response – and due to concerns, some companies could have deliberately reduced their turnover to ensure they could continue to gain access. to the wage subsidy, which would have hampered the economic recovery.

The Treasury’s report states: “A mechanism for repaying payments from companies that performed better than expected was not included, reflecting a desire to avoid any obstacle for companies to adapt and recover.”

“The introduction of such a mechanism would probably have reduced the overall level of activity and dampened the recovery.

“This judgment reflected the ever-increasing uncertainty surrounding both the pandemic and the economic recovery, the weak economic conditions at the time and the role that the worker played as part of the broader macroeconomic response.”

The Ministry of Finance said the data suggested that after the wage subsidy was introduced, job cuts fell “sharply in these companies and employment results were significantly restored, with estimates suggesting around 200,000 workers were brought back when the policy was introduced”.

The federal treasurer, Josh Frydenberg, said on Monday that the job keeper was always more than just a wage subsidy – “it was designed to ensure the strongest possible economic recovery and avoid the scarring effects on the labor market that were characteristic of previous recessions”.

Frydenberg stated that the program did what it was intended for. “It kept employers and employees connected,” he said. “It saved more than 700,000 jobs and it supported Australia’s world-leading economic recovery.”

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The Treasury says that if the government had failed to provide significant fiscal support, including wage subsidies, the peak of unemployment would have been at least five points higher.

As controversy has escalated over the design of the scheme, steps have been taken in Parliament to force greater information on jobseekers. But in September, the Senate rejected a bid to expose the largest 10,000 companies that received wage subsidies for job holders after One Nation senators went back and opted for a weaker form of disclosure.

The Australian Tax Office has recovered $ 194 million. In unjustified overpayments, and it pursued an additional $ 89 million, With $ 6 million. In dispute. But ATO has also chosen not to pursue 180 million. Dollars in workman paid to unjustified companies because of “honest mistakes” from employers who claim the money.

But the Morrison government has sent more than 11,000 people Centrelink promissory notes worth a total of $ 32 million, claiming they were overpaid because of the workman, while resisting calls to return money from companies that received the wage subsidy and then earned money.

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