JobKeeper is the centerpiece of the Australian government’s response to the COVID-19 pandemic. Its purpose is to protect workers by paying a substantial part of the wage of workers employed by businesses that have experienced a downturn in their circumstances due to the impact of the pandemic. By introducing JobKeeper, the government has effectively become the labour market insurer and delivered as the pandemic did its worst. JobKeeper still has a lot of rough edges and many people are not covered including short-tenure casual workers, temporary visa workers (other than New Zealanders), and people in non-standard employment arrangements—those in the arts and entertainment, for example.

JobKeeper makes payments to more people than those who may have needed it. The present paper attempts to address that somewhat. Most important though, the government has indicated that JobKeeper will end in September 2020 and nothing has been announced that might replace JobKeeper. The present proposal would allow JobKeeper to be retained while clawing back spending if the payments are no longer needed, as in the event of a return to low unemployment rates. In other words, the present proposal involves a gradual reduction in net outlays under JobKeeper as the economy improves. But it remains vital that JobKeeper or something similar is retained.