It’s been stimulating, but what comes next?
The Australian Government’s financial response to COVID-19 was swift and significant, but the support had to end sometime.
Back in March 2020, the estimated cost of the combined economic response packages announced by the Australian Government to support individuals and businesses exceeded $320 billion across the forward estimates. More than $80 billion has been paid out through the much-lauded JobKeeper Payment, designed to provide a temporary measure to keep cash flowing into businesses and the pockets of their employees.
The Australian Government moved swiftly to implement JobKeeper and other stimulus initiatives. Rightly, the focus was on getting money out quickly. Government departments and agencies did this effectively, shifting priorities and mobilising teams to urgently deliver for so many Australians. The result has been better than anticipated with unemployment figures lower than expected and emerging consumer and business confidence. It appears (at this point) that both a financial crisis and more importantly a health crisis, have been averted.
The Treasurer and Prime Minister both indicated recently that JobKeeper would end, as planned, on 31 March 2021. There will now be a sustained focus from Government to investigate and recover monies from those businesses that claimed JobKeeper either fraudulently or erroneously.
The ATO’s website states that it has “identified concerning and fraudulent behaviour and claims by a small number of organisations and employees”. These behaviours include businesses not paying employees the correct JobKeeper payments, claiming for employees that do not exist, and manipulating reported turnover to meet eligibility tests.
The ATO is promising to actively pursue “concerning and fraudulent behaviour and claims”, but offering discretion not to pursue repayment in certain circumstances, such as genuine errors. It is timely that businesses who benefitted from JobKeeper assess the accuracy of their applications and whether they followed not just the tax law but the spirit of the law. Some businesses may need to consider following the lead of major companies who recently voluntarily returned amounts received through JobKeeper.