The Federal Government has announced a historic wage subsidy package in response to COVID-19, with over six million workers set to receive a flat payment of $1500 per fortnight through their employer, before tax.
According to Prime Minister Scott Morrison, the $130 billion package will provide a lifeline to businesses “feeling the first blows of the economic impact from the coronavirus.”
“This is about keeping the connection between the employer and the employee, and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months,” he said.
“When the economy comes back, these businesses will be able to start again, and their workforce will be ready to go because they will remain attached to the business through our JobKeeper payment.”
The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.
The program will commence 30 March, with businesses set to see payments from the first week of May as monthly arrears from the Australian Taxation Office.
“Eligible employers will be those with annual turnover of less than $1 billion who self-assess a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period,” Mr. Morrison said.
“Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible.”
According to Treasurer Josh Frydenberg, Australia is going through one of the hardest economic times in its history.
“Businesses will close and people will lose their jobs. That is why we have doubled the welfare safety net. Australians know that their government has their back,” he said.
“This will keep Australian workers connected with their employer and provide hope and more certainty during these difficult and challenging times.”
The government will provide further updates on business cashflow support in coming days.