New research from economics experts at The Australian National University (ANU) has found the JobKeeper wage subsidy cost about $112,819 per annual job saved during the period of the $89 billion program.
Authors of the research paper, Timothy Watson and Tristram Sainsbury, from the ANU Crawford School of Public Policy, and Juha Tervala, from the University of Helsinki, found about 812,000 jobs were saved out of 3.6 million workers who qualified for the wage subsidy.
Analysis of the largest of the Federal Government's economic measures during the COVID-19 pandemic also found that wage increases due to JobKeeper were equivalent to around 60 per cent of total spending during the program period.
“Program effects are persistent, suggesting cumulative benefits will be larger over time,” the authors note in their report.
By the time of the 2021-22 Budget in early-May 2021, $291 billion in economic support had been provided by the Commonwealth Government alone, while state and territory governments introduced a range of business support payments, tax rebates, subsidies, payroll tax and other tax and regulatory holidays.
“JobKeeper represented an incredible administrative achievement, with a very large and entirely novel policy in the Australian context established in a matter of days, and then implemented almost immediately with surprisingly few administrative and compliance issues,” the authors say.
Although they argue that direct transfers may have provided better value for money, and the program could have been made more equitable for casual and migrant workers.
The availability of high quality administrative data allowed policymakers to monitor and evaluate program performance almost real time, and fine tune policy as economic conditions changed.
“The commitment to make this data available to the research community to independently evaluate the efficacy of fiscal policy within a relatively short time-period following its conclusion should be applauded,” the authors say.
Read their report, The JobKeeper Payment: How good are wage subsidies? in full here.