On 31 March 2020 the Australian government unveiled a $79.85 billion wage‑subsidy package, known as JobKeeper, designed to keep businesses afloat and preserve jobs. The program, which now brings total pandemic stimulus to roughly $197 billion – about 16.4 % of the nation’s GDP – does more than simply support companies that are still operating.
It also allows employers to continue paying workers who have already been let go, provided the business can demonstrate a 30 percent fall in revenue. Under the scheme, eligible employers receive a payment of $1,500 every two weeks for each employee, which is paid directly to the business. The employer retains the employee on its payroll, meaning the worker continues to receive a regular paycheck even when no work is available.
This arrangement turns the subsidy into both a retention tool and a potential pathway for rehiring. The eligibility rule is straightforward: any business that can prove a 30 percent revenue decline qualifies, with no sector excluded by name.
Consequently, firms across hospitality, retail, tourism, construction and other industries affected by lockdown orders can access the funds. A restaurant forced to close can still pay its waitstaff; a retail outlet that has lost foot traffic can keep its sales clerks on the books; a tour operator with no bookings can retain its guides. Prime Minister Scott Morrison framed the measure as essential to stop a wave of permanent job losses that would follow business collapses.
The six‑month duration of the subsidy aligns with the government’s expectation that the worst of the economic disruption would be temporary, with restrictions easing by September 2020 and businesses resuming normal operations. No contingency plan for an extension has been announced.
For workers who were already dismissed before the programme’s launch, the subsidy offers a route back onto payrolls, but only if their former employer opts to participate. There is no legal requirement for companies to re‑engage former staff; the incentive is the $1,500 bi‑weekly payment, which for a non‑trading business covers only the wage cost. Critics note that the 30 percent revenue test is the sole filter, meaning firms that were already insolvent can be kept alive, while viable businesses may still struggle.
The policy does not assess long‑term viability, raising concerns that some companies may survive on the subsidy only to fail later, leaving workers tied to non‑viable employers. Administrative burdens also fall on businesses, especially small ones with limited accounting resources.
Employers must apply, substantiate their revenue loss, and manage the subsequent payroll processing. The government has not detailed processing timelines or how disputes over eligibility will be resolved, and any delays could undermine the programme’s purpose. The JobKeeper package is the third tranche of the government’s stimulus response. Earlier March packages focused on direct cash payments to individuals and broader business support.
This larger, more targeted tranche aims to maintain the structure of the labour market so that, once the health crisis recedes, the economy can restart with fewer disruptions. While the cost of the subsidy is substantial, officials argue that the alternative – widespread unemployment, a wave of bankruptcies and a prolonged recession – would be even more expensive for the nation.
