Treasury Secretary Steven Kennedy has hit back at suggestions that support for unemployed Australians and businesses struggling through the coronavirus outbreak is rolling out too slowly.
- Steven Kennedy says support is being paid out “rapidly”
- Hundreds of thousands of businesses have signed up to JobKeeper, translating to millions of employees
- Australians have pulled more than $6.3 billion from their super funds under special arrangements
Mr Kennedy said the global economic impact of the pandemic had been faster, more widespread and more serious than anything Australia had ever experienced.
In the first few weeks of the Australian outbreak, and with hundreds of thousands of people losing their jobs, the Federal Government announced the doubling of JobSeeker unemployment benefits, as well as extra cashflow help for businesses and a $130 billion JobKeeper wage subsidy scheme to encourage employers to keep staff on their books.
Dr Kennedy told a Senate committee investigating the national response to COVID-19 that $10 billion had been paid out over the last three weeks, and he expected three times that amount to flow in the next month.
Labor Senator Katy Gallagher, who is chairing the inquiry, asked why it was taking so long to get money to Australians who were struggling to make ends meet.
“And making literally billions of dollars of payments within four weeks of their announcement — which I appreciate is of no comfort to the broader community that’s been hit by these shutdowns — I would actually regard as a rapid payment of money.
“I really can’t see what the alternative would be.”
Dr Kennedy argued the unprecedented shock had brought with it an unprecedented response from public servants.
“I can’t tell you that Treasury has advised on this in a perfect way, but I think from an administrative perspective, I’m incredibly impressed by what the ATO and … Services Australia has been able to achieve.”
Half a million businesses on JobKeeper
Treasury officials told the committee that as of Monday afternoon, 540,000 businesses had formally registered for the JobKeeper payment.
“Our estimates are those enrolments would cover around 3.3 million employees,” Deputy Secretary Jenny Wilkinson said.
Dr Kennedy said demand for government support would continue to rise in coming weeks and months.
“Unemployment rose to higher levels in the Great Depression, but it did that over the course of a couple of years. These movements are happening in just a couple of months.
“We have never seen an economic shock of this speed, magnitude and shape, reflecting that this is both a significant supply and demand shock.”
The committee was also updated on the number of Australians who have been allowed to access their superannuation early as a form of financial relief.
The latest figures Ms Wilkinson was able to provide showed more than 757,000 people had been approved to access their super ahead of time, and the total amount approved to be pulled out of super funds topped $6.3 billion.
About 5,000 additional applications had been made but had not received approval, Ms Wilkinson said, however she could not distinguish whether the claims had been rejected, or were pending.
The policy allows people under financial stress to access $10,000 of their retirement savings this financial year, and a further $10,000 next financial year.
Treasury official Robert Jeremenko said a 30-year-old who took full advantage of the scheme should expect to be more than $40,000 worse off at retirement age, according to the Australian Securities and Investments Commission.
He was disputing modelling from Industry Super Australia, which suggested that number could be far higher.
“That figure, for the $20,000 withdrawal for a 30-year-old, is $43,000 at age 67, not something significantly larger,” Mr Jeremenko said.