Australia won’t make ‘wholesale changes’ to wage subsidies: treasurer

Economy

SYDNEY (Reuters) – Australia has no plans to make “wholesale changes” to its coronavirus wage subsidy scheme, after reporting errors revised the total cost estimates to the programme by around A$ 60 billion ($ 40 billion), the country’s treasurer said on Monday.

Australia’s conservative government on Friday halved the number of people expected to be covered by the wage subsidy scheme, after earlier putting the total cost at A$ 130 billion ($ 85 billion) to subsidise the pay of about 6 million people until September.

“What it means is that the country will be borrowing A$ 60 billion less than otherwise would have occurred,” Treasurer Josh Frydenberg told local broadcaster Seven Network.

Australia imposed tough social distancing restrictions forcing hundreds of thousands of people out of work to limit the spread of the epidemic. The government says the unemployment rate is likely double to 10% in the June quarter.

“There were no underpayments or overpayments,” Frydenberg said, adding it was “inherently difficult” to forecast accurately the number of people who could become eligible for the wage subsidy programme.

The errors on wage subsidy applications by about 1,000 businesses meant only 3.5 million people will need to be covered now at a cost of A$ 70 billion ($ 45.72 billion).

The miscalculation occurred as businesses confused their number of employees with their wage subsidy while completing the forms.

Frydenberg also said calls for him to appear before a parliament senate committee inquiry in response to the errors were “just a political stunt” by the opposition Labor party.

“I am not appearing before that senate inquiry because that is not what convention has been … this is again a cheeky political point scoring by the labor party,” he told Sky News.

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