Prime Minister Scott Morrison has warned that some businesses will fail when the government removes its JobKeeper and JobSeeker support mechanisms, but also promised the economy will return to strength.
Also read: Postcodes most at risk when JobKeeper ends
Speaking on Monday morning, Morrison unveiled his government’s plan to deliver an extra 66,000 jobs to Australians and pull the country out of the coronavirus wreckage.
Morrison said the hit to Australia’s gross domestic product (GDP) would be severe, and that deregulation and infrastructure would be key to the recovery.
The path ahead will be rocky, especially when the September deadline for the JobKeeper and JobSeeker payments rolls around, he added.
"Without these measures businesses would have simply fallen over, never to open again. This still may ultimately be the experience for some. But for many more, these measures will have provided the bridge they needed,” Morrison said.
“That is why these supports are only temporary.
“Left in place for too long they will dull the dynamism of the economy and prevent the adjustments that must necessarily take place to enable new jobs to be created and our economy to move forward.”
Around 844,000 businesses have accessed JobKeeper, delivering payments to 3.5 million workers.
Morrison said a 1 per cent lift to GDP above the last two years’ trend will be required for the economy to “catch up” to where it would have been before coronavirus hit.
“The restoration of growth is also critical to our public finances. We are looking at a record deficit this year and next, and not just because of record Covid-19 expenditures. Revenues have taken an equally large hit,” he said.
“And while expenditure measures have been designed to be targeted and time-limited in accordance with the principles we set out, the impact on revenue will be longer lived as the economy makes its way back.”
Morrison plans to achieve that through the JobMaker and deregulation plan.
The Prime Minister first detailed JobMaker in May, under which five working groups will investigate award simplification, union conduct and enterprise agreements in a bid to streamline the workforce.
Adding to that today, Morrison said there are 15 major projects that will be fast-tracked for approval, worth $72 billion in direct and private investment and that will support 66,000 direct and indirect jobs. He said these will be fast-tracked by aiming to reduce Commonwealth assessment times by 50 per cent.
That would see major projects approved in 21 months, rather than 3.5 years.
Morrison also announced $1.5 billion to start work on small priority projects as identified by state and territory governments.
“This includes the Inland rail from Melbourne to Brisbane, the link between Tasmania and Victoria, Olympic Dam Extension in South Australia, emergency town water projects in New South Wales and road, rail and iron ore projects in Western Australia.
“Early examples of this approach are already paying dividends and are very encouraging,” Morrison said.
He said the Snowy 2.0 project was one example of how projects can be fast-tracked, noting that the NSW government is on track to approve it within two years. That project is forecast to support 2,000 regional jobs.
On a smaller level, Morrison said streamlining documentation and simplifying business registers will also help businesses employ people.
The Deregulation Taskforce will move into the Department of Prime Minister of Cabinet, with Morrison describing this move as allowing for a “whole of government approach” to the way regulatory policy is delivered.
"All levels of government, business and the community must rethink how these systems can better contribute to our recovery from the pandemic," he said.
"We need to bring the same common sense and cooperation we showed fighting Covid-19 to unlocking infrastructure investment in the recovery."