Lockdown ends, JobKeeper set to end too

Throughout this pandemic there have been very few certainties.

Today’s announcement that Victoria’s snap 5-day lockdown is ending as scheduled is welcome news, but there’s no certainty that we’re going to stay free into the future.

What is certain, however, is that JobKeeper is ending in March. Treasurer Josh Frydenberg made that clear as recently as yesterday.

He says a Treasury review has found that the JobKeeper subsidy is having some perverse outcomes that are preventing workers moving freely across the economy, which has resulted in labour shortages in some areas.

“This successful and expensive program must end but other policies will fill that place,” he said, pointing to initiatives such as the government’s tax cuts.

So what does that mean for all of us? For a start, I think Mr Frydenberg wants to delete the word JobKeeper from our vocabulary entirely.

But what will the real-world impacts be for struggling industries where unemployment remains high or earnings are unlikely to recover soon? I believe the government’s solution will be to implement a more industry-targeted approach.

For example, those in the travel industry, in particular international tourism, would get targeted government support in the form of grants and subsidies specifically tailored for that industry. Similar support would apply to the arts and entertainment industries, for example.

This government support would need to be calculated against industry-specific revenue shortfalls, rather than the standard 30% revenue drop mechanism used to assess eligibility for JobKeeper.

This solution is far from certain, but I reckon watch this space.

An unexpected and pleasing outcome we’ve seen over the last week is the corporate responsibility of boards and CEOs who have received the JobKeeper payment, vowing to repay the subsidy in situations where it hasn’t been needed.

Yesterday Collins Foods vowed to repay $1 million of payments, on Monday Adairs will repay more than $6 million after their profit tripled, and Nick Scali will repay $3.5 million.

What’s certain is that’s good for everyone.