An inquiry into the COVID-era JobKeeper program has been told the extra stimulus contributed to the surge in inflation that has forced the RBA to lift interest rates while eating into real wages.
About $90 billion more than first thought was pumped into the economy during the COVID-19 pandemic, independent analysis has revealed, contributing to the surge in inflation that has forced the Reserve Bank to lift interest rates while eating into the real wages of working Australians.
In June, Treasury appointed former senior official Nigel Ray to helm an inquiry into the $90 billion JobKeeper scheme, including its scope, design features, whether it worked as intended and its broader impact on the economy. Overall, the previous government estimated JobKeeper, along with other stimulus such as $26 billion for bringing forward stage 2 tax cuts and $35 billion in tax-free handouts to business of between $20,000 and $100,000, cost the budget $337 billion.
Murphy found businesses were overcompensated through JobKeeper. For every $1 businesses lost in income due to COVID-related shutdowns, they received $2 in government support.for the just-completed financial year, received $856 million in JobKeeper payments, along with other assistance aimed specifically at the airline industry. Unlike some high-profile businesses including Cochlear, Premier Investments and Nick Scali, it has refused to repay any of its JobKeeper payments.
It also noted that government debt, which on Friday reached $898.4 billion, was higher than necessary because of “wasted” spending under JobKeeper.
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