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Govt defends cutting JobKeeper, says economy 'coming out of ICU'

National

Prime Minister Scott Morrison has defended cutting the JobKeeper subsidy for more than a million workers – and axing it entirely in March – saying the economy needs to be weaned off government support to ensure a business-led recovery.

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As of yesterday, workers receiving the JobKeeper subsidy paid to pandemic-hit employers to keep workers on the payroll instead of unemployment benefits, had  payments cut by $200 a fortnight, while workers on the lower part-time rate will receive $100 less.

Labor says 1.6 million Australians receive JobKeeper, while 2.2 million others are looking for work or more work, and the governments expects unemployment to hit 7.5 per cent in the March quarter, up from the current 6.8 per cent.

More than two million workers have left the JobKeeper wage subsidy scheme since the government tightened eligibility and reduced payment rates at the end of September, with the number falling from 3.6 million to 1.5 million in less than two months.

The initial $1500 fortnightly payment for full-time workers was cut to $1200 and halved to $750 for casual staff working less than 20 hours a week.

Morrison said today that the JobKeeper subsidy was always going to be “temporary, targeted and proportionate” allowing workers to get through the worst of the coronavirus pandemic, which sent Australia into recession.

He said thousands of businesses and over two million workers had “graduated” from JobKeeper back onto the regular payroll, with the government having spent $77 billion on it.

“The economy is regearing … it’s finding its own feet again,” Morrison said.

“We’ve got to be careful the important supports we put in place during the worst of the pandemic then don’t hold back the business-led recovery on the other side.”

He compared the economic recovery to a hospital.

“It’s like coming out of the ICU and into the ward and then becoming an outpatient.”

Besides the latest cut to JobKeeper, the government on January 1 cut the maximum rate of JobSeeker unemployment allowance – boosted from its previous $40 a day due to a coronavirus allowance which will be axed in March – from $58 a day to $51 a day.

ACOSS said the cut had lowered unemployment payments from about $21,000 a year to about $18,500 a year and that if the coronavirus supplement was axed without the base rate being increased, recipients would once again have to survive on about $14,500 a year – a rate below poverty level and which had not increased in real terms for decades.

-with AAP

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