What JobKeeper 2 means to you as the economy dips into official recession

The JobKeeper 2.0 scheme was passed by Parliament last night, paying $1,200 for those who worked over 20 hours before the pandemic, and $750 for those who work less.

It’s a small cut to a policy that has helped tens of thousands of Australian stay afloat – and came hours before the release of figures that demonstrate just how dire the economy is.

The country is now officially in recession for the first time in 29 years, with a 7 per cent fall in the June quarter GDP – thanks to slowing activity and Australian families closing their wallets.

But the superlatives were out in force: it’s the biggest fall since records started in 1959, with growth the lowest since World War II after shrinking to minus 6.3 per cent from 1.4 per cent in March.

The Australian Bureau of Statistics figures released today show the June quarter figures were better than some market economists’ expected.

But there is no doubt Australians are saving their money. Household spending collapsed by 12.1 per cent in the quarter, while spending on services  –  transport services, and in hotels, cafes and restaurants – went down further at 17.6 per cent.

In reaction, businesses cut investments by 6.5 per cent – meaning more jobs woe in the future.

The figures demonstrate exactly why the government had to keep JobKeeper rolling out. The JobSeeker 2 program will still cost $32 billion.

However, this time round the government is not being quite so even-handed.

Those employers who qualified for the first round of JobKeeper  – they had to show a 30% fall in revenue compared to the same period last time – can still get help.

If revenue is still down by at least 10 per cent in the September quarter, they will be eligible for exemptions from the Fair Work Act that will give them flexibility in managing their workforce by, say, reducing hours.

Before the announcement, Finance Minister Mathias Cormann said we should brace for a severe contraction.

“We do need to expect a severe contraction and we know what has caused it – economies around the world have been hit very hard by the impact of the coronavirus pandemic,” he told Sunrise this morning.

Treasurer Josh Frydenberg send voters a letter saying:  “Without JobKeeper and our other economic support measures, Treasury estimates Australia’s unemployment rate would be 5 percentage points higher. These measures have saved around 700,000 jobs.”

For the next stage of JobKeeper – from September until March 2021 – there will be a two-tiered payment:

• For the December quarter, payments will be $1,200 per fortnight per employee, or $750 for workers who were employed for less than 20 hours a week.
• For the March quarter, payments will be $1,000 per fortnight per employee, or $650 for workers who were employed for less than 20 hours a week.

How jobs are being supported

• Payments to more than 785,000 businesses to boost cash flow.
• A 50% wage subsidy, supporting around 180,000 apprentices and trainees.
• Up to 340,700 JobTrainer places for school leavers and job seekers to upskill.
• The HomeBuilder program, supporting the residential construction industry.
• JobSeeker and the Coronavirus Supplement.
• $750 payments in April and July to millions of Australians, including pensioners.

Further details about these measures are available at treasury.gov.au