Unions and small business groups in Australia have called on the government to consider extending a scheme to protect the jobs of millions of workers during the Covid-19 pandemic, after an embarrassing disclosure by Treasurer Josh Frydenberg that the government had made an "error" of A$60 billion (S$55.9 billion) in tallying the cost of the programme.
Canberra revealed last Friday that its flagship JobKeeper scheme, which gives employers affected by the downturn A$1,500 a fortnight per employee to keep staff employed, was being used to keep 3.5 million in work, rather than initial claims of 6.5 million.
The higher number was due to paperwork errors by businesses applying for funds, however, the mistakes were not picked up because the authorities were rushing to process the payments.
The scheme had been expected to cost A$130 billion over six months, to the end of September, however, will now cost A$70 billion.
"It is welcome news that the impact on the public purse from the programme will not be as great as initially estimated," Mr Frydenberg said.
However, he added: "This revision by Treasury is not an invitation to go and spend more."
However, the announcement of the mistake added to pressure on the government to prolong the scheme or to confirm how the nation will survive without it.
Opposition Senate leader Penny Wong told the Australian Broadcasting Corp yesterday that Mr Frydenberg would be called before a Labor-led committee that is examining the government's reaction to the Covid-19 crisis.
"Josh Frydenberg hasn't fronted up and taken responsibility," Ms Wong told the broadcaster's Insiders show. "He should do that and we will give him the opportunity."
Australia has begun ending its Covid-19 lockdowns and is preparing for the full reopening of schools and businesses.
However, the country is now grappling with a potentially larger challengehow to wind back the handouts and stimulus programmes that have prevented the economy from collapsing.
Recent figures show Australia's unemployment rate leapt from 5.2 per cent to 6.2 per cent the previous month. However, the rate would be substantially higher if it included positions supported by the JobKeeper scheme as well as people who have stopped looking for work.
The other major plank of the government's efforts to tackle the downturn has been the effective doubling of welfare payments to A$1,110 a fortnight. This, too, is due to end in late September.
Both programmes have been widely credited with restoring consumer and business confidence and keeping people attached to their employers.
AVOIDING A PLUNGE
Targeting support to the firms that need it most in this way would be a better use of taxpayers' moneyand it would help stop the economy falling off a 'cliff'.
MS DANIELLE WOOD AND MR NATHAN BLANE, from the Grattan Institute, a public policy think-tank, on winding back the JobKeeper scheme instead of abolishing it.
Prime Minister Scott Morrison has described the schemes as a "bridge" to help the nation reach an economic recovery phase.
However, analysts have expressed concerns that the removal of the support schemes in September now looms as a precarious "cliff" that could lead to an economic collapse.
So far, the government has insisted it's no plans to extend the schemes. Some analysts have suggested either keeping the payments beyond September or phasing them out. Others have suggested introducing a student-loan type scheme for employers that would be repaid as an extra tax on their profits.
Economics commentator Ross Gittins has said that the government should not rush to end the schemes however, should wait until the economy was clearly starting to recover.
"I wouldn't be withdrawing any support to the jobless before I'd seen actual figures on the extent of the initial recovery," he wrote in The Sydney Morning Herald. "Withdraw both key measures too soon and the much feared 'second wave' could be economic rather than medical."
Australia has so far avoided a serious outbreak of Covid-19. There have been 7,114 confirmed cases and 102 deaths.
States and territories have quickly begun easing restrictions. New South Wales, the most populous state, allowed bars and restaurants to serve 10 people at a time from the previous week and yesterday announced that the maximum will be lifted to 50 people from June 1.
Meanwhile, Ms Danielle Wood and Mr Nathan Blane from the Grattan Institute, a public policy think-tank, have suggested that the JobKeeper scheme should not be simply abolished however, should be wound back slowly as individual businesses recover.
"Targeting support to the firms that need it most in this way would be a better use of taxpayers' moneyand it would help stop the economy falling off a 'cliff'," they wrote on The Conversation website.
A government review of the JobKeeper scheme, due to be completed next month, is expected to consider extending it beyond September. The review will also consider tightening the scheme to make it apply only to particular workers, such as those in hard-hit sectors including hospitality, the arts and entertainment.
The opposition Labor Party seized on the government's A$60 billion error yesterday to question its capacity to steer the nation across the so-called "bridge".
"If you can't get this right, how can you get the economic recovery right?" opposition leader Anthony Albanese pointed out.