Australia’s finance minister has kept the door open to making further changes to economic support measures such as the jobkeeper wage subsidy, saying the government would act “if facts change”.
Mathias Cormann foreshadowed the Coalition’s openness to further changes in an interview on Sunday, during which the senior minister from Western Australia also declared that the federal government now supported the border restrictions imposed by numerous states, including WA.
Under plans unveiled by the federal government last month, the rate of the jobkeeper wage subsidy and of the jobseeker unemployment benefit will be cut near the end of September. Jobkeeper is due to end in March.
A few days ago, however, the government tweaked eligibility requirements for the wage subsidy – at a cost of nearly $16bn – because of the worsening economic outlook from the tighter lockdown measures in Victoria, which is trying to contain a second wave of infections.
Cormann said it was the government’s “current intention” to reduce the rates in September and to stick to the schedule as previously announced.
But in an interview with the ABC’s Insiders program, he clearly kept the government’s options open. Cormann said the Coalition had demonstrated, through its response to the crisis, that it was “prepared to make decisions in the context of an evolving situation based on the information that comes before us”.
“I’m not going to speculate. The policy settings are what they are. As we’ve demonstrated in the past, if facts change, we’ll reassess what may or may not be appropriate at the time.”
In a separate interview with Sky News this morning, the agriculture minister, David Littleproud, also said that the government would continue to be “agile” in responding to changing circumstances.
New forecasts by the Australian Treasury indicate the lockdown in Victoria will likely push unemployment in Australia up to 10% by the end of the year, and will cost the national economy between $10bn and $12bn.
The Coalition’s economic plans should become clearer in the run-up to 6 October, when it is due to hand down the annual budget, which was postponed from May because the government argued the outlook at that time was too uncertain.
But the new forecasts by Treasury last week indicate the economic and fiscal update published just weeks ago is already out of date.
Cormann declined to speculate on how much extra debt the government was prepared to incur, but insisted Australia’s level of borrowing “continues to be manageable” compared with the rest of the world.
The government, he said, was “focused on supporting Australians through this crisis, doing what needs to be done to respond to the health challenge and indeed to the economic and jobs challenge”.
Cormann hinted company tax cuts could be part of the government’s deliberations in the lead-up to the budget, saying he would “continue to focus on everything and anything we can do to make it easier for businesses to survive, to be viable, to be profitable, so that they can hire more Australians – and that will include a focus on the appropriate tax policy settings”.
The interview also showcased the dramatic shift in the federal government’s position over state border closures, amid growing concerns about the rise in infections in Victoria and very strong public support for the restrictions in WA.
Cormann – who argued in late July that governments “must not gratuitously impose unnecessary and avoidable economic or social harm for no or very little public health upside” – told Insiders on Sunday: “Given what’s been happening in Victoria and given where the country is at, we support the current state border arrangements, including here in Western Australia.”
He said the federal government had “changed our view as the position has evolved”. Asked about suggestions that the WA border might remain shut until next year, Cormann said the premier, Mark McGowan, had said “that he can’t put a date on it and that’s certainly right”.
“I’m sure that the premier, like everyone, would want those state borders to be able to come down at the earliest opportunity, but we just don’t know.”
A week ago, the prime minister, Scott Morrison, bowed to pressure from the state premier to end the federal government’s involvement in a high court case challenging WA’s border closure. In the last few days, the prime minister has personally appealed to the businessman Clive Palmer to drop the case altogether.