Australia will not make ‘wholesale changes’ for wage subsidies: treasurer | News | Instant News


SYDNEY (Reuters) – Australia has no plans to make “massive changes” to the coronavirus wage subsidy scheme, after reporting errors revised the estimated total cost for the program to around A $ 60 billion ($ 40 billion), the country’s treasurer said Monday.

Australia’s conservative government on Friday halved the number of people expected to be covered by the wage subsidy scheme, having previously placed a total cost of A $ 130 billion ($ 85 billion) to subsidize payments of around 6 million people until September.

“What it means is that the country will borrow A $ 60 billion less than it should,” Treasurer Josh Frydenberg told local broadcaster Seven Network.

Australia has strict social restrictions that force hundreds of thousands of people out of work to limit the spread of the epidemic. The government said the unemployment rate tended to double to 10% in the June quarter.

“There is no underpayment or overpayment,” Frydenberg said, adding that “it is inherently difficult” to accurately estimate the number of people who can qualify for a wage subsidy program.

A mistake in the application of wage subsidies by around 1,000 businesses means that only 3.5 million people need to be covered now at a cost of A $ 70 billion ($ 45.72 billion).

Miscalculations occur when businesses confuse the number of their employees by subsidizing their wages when filling out forms.

Frydenberg also said the call for him to appear before the parliamentary senate committee in response to the error was “only a political action” by the opposition Labor party.

“I did not appear before the senate investigation because it was not a convention that had taken place … this was again a fraudulent political point made by the labor party,” he told Sky News.

(Reporting by Renju Jose; Editing by Sam Holmes)

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