Payout cuts backed

THE federal opposition says it “makes sense” to wind back JobKeeper in instances where people are making more money than usual under the $70bn scheme.

Treasurer Josh Frydenberg hinted at this and other changes to the payment to be announced in Thursday’s economic update.

“We did take a conscious decision to have one single flat payment of $1500,” Mr Frydenberg said. “Now that meant some people were getting overpaid while others were getting underpaid. We took that conscious decision because we wanted to get as much money out of the door as possible and we didn’t want to build a new system.”

The government has now had time to “reflect” on that, he added.

Labor senator Katy Gallagher said the opposition had argued “for some time” that the government could have tightened up the scheme in this regard.

“I think it makes sense that people who earn less and were getting more in JobKeeper, if we’re looking at how we target some of the spending, it makes sense to look at winding that back,” she said on Sunday.

Mr Frydenberg’s mini-budget on Thursday is expected to reveal the extent of the economic damage done by the global pandemic, as well as have more detail about the government’s plans for the JobKeeper and JobSeeker payments.

JobKeeper is expected to be replaced by a fresh system of “tapered payments” with a focus on industries such as tourism and hospitality.

Senator Gallagher reiterated Labor’s call to “target, test and taper” the JobSeeker payment. “Obviously there is going to need to be continued support,” she said.

On JobSeeker, which has increased to a fortnightly rate of $1100 in the pandemic, Senator Gallagher said a snapback to the original rate of $40 per day was “not acceptable” but declined to name a figure.