The end of the JobKeeper program on March 28 means that up to 500,000 jobs are at risk, according to Small Business Australia (SBA). Government estimates are that 150,000 jobs could go.
One million people are still supported by the JobKeeper program and only 609 young people have been hired under the so-called JobMaker program.
The latter was meant to encourage the employment of people previously on JobSeeker (unemployment support) and was expected to support 450,000 jobs.
“Without the ongoing support of JobKeeper, many [small businesses] will be forced to close indefinitely or permanently,” according to SBA executive director Bill Lang. “It is not financially feasible for them to operate under the current rules.”
Since last April, $90 billion of public funds have been spent on JobKeeper, introduced by the Coalition government in response to the pandemic-induced economic crisis.
The fortnightly payments began at $1500 and went to $1200 from the end of September.
Since early January, payments were cut to $500 a week for those employed for 20 hours or more a week and $325 for those working less.
Over that time the numbers covered by the scheme have dropped from 3.6 million people to less than a third of that number.
The implementation of the JobKeeper system has blown apart the longstanding neoliberal myth that governments should not carry out large-scale expenditure to boost the economy and maintain the incomes of workers and their families.
The federal government’s $130 billion COVID-19 stimulus package adopted a year ago — of which JobKeeper was a key element — was the single biggest public expenditure in our history.
While the JobKeeper program has been successful in maintaining the incomes of many workers during the pandemic, it has the basic contradiction of taking the form of a subsidy to business, for which there has been little accountability.
“For a conservative government obsessed with bringing its budget into line and eradicating six years of its own deficits, JobKeeper at first glance looked like a scheme lifted straight from the texts of the much-reviled John Maynard Keynes,” the ABC’s business editor Ian Verrender commented on March 22.
“But with the program about to end, the shortcomings now are becoming clear: that billions of dollars of taxpayer cash was doled out to not just struggling businesses or those whose earnings had slumped, but to businesses and households that boomed during the lockdowns.
“It’s quite likely JobKeeper could end up being the biggest corporate welfare scheme Australia has ever run, with billions of taxpayer dollars transferred into the pockets of the wealthy, minus of course the mutual obligations associated with welfare,” he said.
The New Daily reported on March 3 that more than 60 ASX-listed companies disclosed receiving JobKeeper and other hand-outs during the pandemic.
They recorded combined profits of $8.6 billion over the past 18 months; funnelled more than $3.6 billion in dividends to investors since last April; paid back just $72 million to the public purse; and paid out $20 million in bonuses to executives.
Examples of corporations pocketing JobKeeper, while recording significant profits, include property developers Mirvac and Lendlease, retailers Harvey Norman and Crown Casinos.
Lang was incensed that Qantas received JobKeeper, even though the major national airline now has a 74% share of the aviation market, and 90% of regional services.
“It is a national scandal that we have seen very sizeable businesses registering large profits, whilst pocketing millions in payments from the government, whilst smaller traders, who are currently unable to trade at anywhere near full capacity face financial ruin as the government support is switched off.”
Rather than ending, the JobKeeper scheme should be extended and transformed into a genuine employment guarantee for workers across the board.
The scheme should be audited to ensure that profitable businesses are not receiving public funds. Companies that have used JobKeeper money to pay executive bonuses and dividends should be mandated to return that money.
The introduction of JobKeeper shows that significant public investment to save jobs in the context of a pandemic can, and should, be extended to maintain and create new jobs into the future.
As the crisis stage of the pandemic recedes, we must defend the practice of using public investment to guarantee jobs and campaign that investment to be redirected away from being a business subsidy towards an expansion of the public sector.
This can ensure that the jobs created and preserved are directed towards industries and projects that advance democratically-determined social and environmental priorities instead of just those that make the biggest profits for big corporations.
[Jim McIlroy is a member of the Socialist Alliance.]