Australia will spend A$16.8 billion ($11.8 billion) to extend its wage subsidies for businesses hit by the coronavirus pandemic, as a surge in new infections in the country’s southeast threatens to keep the economy in recession.
The six-month extension of the programme allays fears a hard end to the current A$70 billion scheme, originally scheduled for Sept. 30, that would prolong Australia’s first recession in three decades.
However, subsidies will be reduced under the new programme, which runs through to March 28, 2021 and is expected to cover about 1 million workers, as Prime Minister Scott Morrison’s conservative government seeks to wean the economy of fiscal support.
“It has to scale down and work ourselves off these supports because they’re not enduring, they cannot be permanent, they were never designed to be permanent,” Morrison told reporters in Canberra on Tuesday.
Australia launched its support programme in March with fortnightly payments for workers from affected businesses of A$1,500 ($1,049). The scheme covered all workers, including those who only worked casual shifts.