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Government overstates JobKeeper uptake

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parliament house ta
Reporter 2 minute read

A “reporting error” identified by Treasury and the ATO has revealed that the federal government has overestimated the cost of the JobKeeper program by approximately $60 billion.

After reviewing the forms of approximately 910,055 businesses applying for the federal government’s JobKeeper subsidy, the Treasury and the Australian Taxation Office (ATO) have identified a “reporting error”, which has grossly overstated uptake of the program.

The government initially reported that approximately 6.5 million Australians would be granted income support from the program, totalling approximately $130 billion.

However, the review has found that just 3.5 million Australians would be covered under the JobKeeper program, totalling approximately $70 billion.

According to Treasury, the ATO’s review found that around 1,000 businesses applying for the program made “significant errors” when recording the estimate of eligible employees on their enrolment form.

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“The most common error was that instead of reporting the number of employees they expected to be eligible, they reported the amount of assistance they expected to receive,” Treasury revealed.

“For example, over 500 businesses with ‘one’ eligible employee reported a figure of ‘1,500’, which is the amount of JobKeeper payment they would expect to receive for each fortnight for that employee.”

Treasury claimed that the error was not picked up by the ATO earlier because, initially, their primary focus was to ensure that JobKeeper payments were paid promptly to eligible applicants and not paid to those who were ineligible.

In light of underutilisation of the program, the scheme remains open to new applicants.

According to Treasury, as at 20 May 2020, 910,055 businesses had enrolled in the JobKeeper program, of which 759,654 had made claims in relation to their eligible employees and had their applications processed — equating to approximately $8.7 billion in approved payments.

[Related: ATO and ASBFEO reveal how JobKeeper affects businesses]

Government overstates JobKeeper uptake
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