You are here

Australia to spend further A$1.5b on wage subsidies amid coronavirus

AB_aus_160720.jpg
The Reserve Bank of Australia has urged the government to extend its fiscal support, cautioning that the economy will need "considerable" support for some time.

[SYDNEY] The Australian government plans to spend A$1.50 billion (S$1.46 billion) to substantially extend a programme to subsidise the wages of apprentices, its latest support measure for the work force amid the coronavirus pandemic.

The plan unveiled by Prime Minister Scott Morrison's office on Thursday is the first indication of how his government plans to prop up Australia's ailing economy beyond September when a broader A$60 billion wage subsidy package expires.

The government will extend a current programme that pays 50 per cent of the wages of apprentices employed by small businesses from 80,000 workers to cover 180,000 workers across all industries. The timeframe for the subsidies will also be extended from the current September expiry to March next year.

Separately, the government will spend a further A$500 million to help re-train Australians as unemployment soars because of the coronavirus pandemic. The official unemployment rate is 7 per cent, but if people on the wage subsidy scheme are counted, it blows out to around 13 per cent.

Mr Morrison has said previously the broader wage subsidy scheme would not be extended, but replaced with industry specific support. Full details are expected to be announced on July 23 when the government gives an economic and fiscal update.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

The Reserve Bank of Australia has urged the government to extend its fiscal support, cautioning that the economy will need "considerable" support for some time.

Australia is headed into its first recession in almost three decades because of lockdown measures imposed for months to combat the coronavirus pandemic. Its tourism and education sectors have been particularly hard hit.

Australia has recorded nearly 11,000 cases of Covid-19, including 113 deaths. That remains well below many other countries, but a spike in the number of cases in recent days has worried officials.

REUTERS

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes