The Australian Government will pay some worker wages during the Coronavirus crisis, the Australian Financial Review is reporting.
The newspaper said the Scott Morrison led-government was putting together an audacious plan to subsidise workers and business during the extraordinary pandemic crisis.
The Covid-19 crisis has triggered a recession virtually overnight, with thousands instantly jobless after bars, cafes, restaurants, casinos, health clubs, gyms, entertainment and arts venues were closed down. The tourism and travel industry has also been completely decimated with no foreigners allowed to enter Australia, domestic travel bans and airlines slashing flights.
The details are still being put together, however it is understood that the Coronavirus wage deal in Australia will be similar to programs in the UK, Canada and Denmark, where 75 per cent to 80 per cent of wages are being covered to keep people employed.
Economists are forecasting an unemployment rate in Australia of between 10 to 15% in coming weeks, with over one million Australians losing their jobs due to the crisis.
At least 100,000 Australian jobs were lost this week alone, in the hospitality, tourism, airline, retail, events and arts sectors – as thousands of businesses shut down.
The moves would help prevent the economy going into free-fall until the Covid-19 crisis abates.
Australia is essentially forecast to be in lockdown for at least 6-months as social distancing measures are put in place and various businesses are shutdown to stop the Covid-19 spread.
In Canada, Prime Minister Trudeau promised workers the government would cover 75% of of wages.
“This means people will continue to be paid even though their employers have to slow down or stop their businesses,” the Canadian leader said.
The Australian Chamber of Commerce and Industry had been lobbying the Australian Treasurer to implement a UK style system, capped at average full time earnings of about $1600 a week.
The UK scheme applies to anyone who has been asked to stop working but remains on the payroll – called a “furloughed worker”.
Companies will pay those workers 80 per cent of their standard wage, reimbursed by the government. The payments are backdated to March 1.
The idea to guarantee worker salaries, rather than let businesses fire staff and end operations came from the Danish government.
An interesting interview on how that came about from CNN:
Prime Minister Morrison has mentioned the concept of the “hibernation” of parts of the economy, while the Covid-19 pandemic was delays with. It’s not clearer that the government was looking at this type of policy to ensure workers continued to be paid.
The Sydney News Authors