THE federal government will be judged far more harshly on its second fiscal response to the COVID-19 pandemic than it was for the first.
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Prime Minister Scott Morrison has announced changes to the JobSeeker and JobKeeper programs that will see fewer people supported and smaller payments to those who are.
The changes are a necessary response to a continuing crisis and represent an important test for a federal government which quickly realised back in March just what an impact COVID-19 would have on the economy before taking drastic action to shore-up the incomes of millions of Australian workers.
The government doubled the rate of Newstart allowance and introduced a flat-rate Jobkeeper allowance that left the taxpayer effectively footing the wages bill for thousands of Australian employers.
There was a lack of nuance in the measures which meant some workers were actually being paid more on Jobkeeper than they were receiving before the pandemic hit, but the moves kept the wheels of the economy turning It was not an elegant response, but it did the trick.
With the first stimulus measures due to end in September, though, and Australia yet to be through the worst of this recession, there has been much more pressure on the government to get the second stimulus package right.
For one thing, they have had time to work on this one and the government has recognised that JobKeeper 2.0 needs to be a more targeted response, sending support where it's most needed.
And while the JobSeeker payment may never return to the $40-a-day ($550 a fortnight) level it was prior to COVID-19, nor was it sustainable to keep paying recipients double. The new rate will be about $800 a fortnight and only time will tell where it lands in the longer term.
Because the ultimate challenge for the government is deciding just how much of a burden we can place on future workers to pay back the debts we're accruing today.
Australia was fortunate that this pandemic in a reasonably strong financial position and with good social security networks in place.
Our past good work has helped us avoid the very worst economic impacts of the virus but it requires a delicate balancing act to weigh the very real needs of today's workers against the inevitable pressure that will fall on future workers.
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