Government support for business, March quarter 2021

Released

2/06/2021

Source

Australian National Accounts: National Income, Expenditure and Product, March 2021

Released

02/06/2021 11:30am AEST

The Government’s economic response to the COVID-19 pandemic continued into March quarter 2021. This response included the continuation of JobKeeper and Boosting cash flow for employers subsidies. JobKeeper and Boosting cash flow for employers are the two largest subsidies recorded in the history of national accounts. For further information on the classification of these policies, see Economic measurement during COVID-19: Selected issues in the Economic Accounts (cat. no. 5261.0).

JobKeeper payments accounted for $6.4 billion in March quarter, down from $12.0 billion in December quarter. Boosting cash flow for employers contributed $692 million, down from $6.7 billion in December quarter. Other COVID-19 related subsidies, including those made by state governments, added an additional $1.7 billion in the March quarter.

Figure 1: Government support for business in response to COVID-19
	Non COVID-19 (bn)	Other COVID-19 related (bn)	Boosting cashflow for employers (bn)	JobKeeper (bn)
Jun-19	1.5
Sep-19	1.6
Dec-19	1.6
Mar-20	1.5
Jun-20	1.4	3.6	14.6	35.1
Sep-20	1.5	3.4	13.5	35.8
Dec-20	1.5	3.4	6.7	12.0
Mar-21	1.5	1.7	0.7	6.4

Figure 1: Government support for business in response to COVID-19

["","Non COVID-19","Other COVID-19 related","Boosting cashflow for employers","JobKeeper"]

[["Jun-19","Sep-19","Dec-19","Mar-20","Jun-20","Sep-20","Dec-20","Mar-21"],[[1.454],[1.623],[1.622],[1.54],[1.39],[1.47],[1.53],[1.506]],[[null],[null],[null],[null],[3.626],[3.395],[3.393],[1.698]],[[null],[null],[null],[null],[14.607],[13.455],[6.687],[0.692]],[[null],[null],[null],[null],[35.142],[35.83],[12.002],[6.402]]]

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Changes to JobKeeper

The JobKeeper policy was extended from 28 September 2020, with new employer eligibility tests and a two-tiered payment system. The second part of the extension commenced 4 January 2021 and the policy ceased on 28 March 2021.

Eligibility for the JobKeeper extension was based on the change in turnover from December 2019 to December 2020. This eligibility criterion for the second part of the JobKeeper extension remained the same as the first extension’s employer eligibility test.

The extension of the two-tiered payment system reduced payments of $1200 per fortnight for eligible employees working 80 hours or more to $1000 (tier 1) whilst all other eligible employees received $650 per fortnight (tier 2), down from $750.

Both the eligibility retest and the lower rate of Jobkeeper payments contributed to the overall fall in total payments.

JobKeeper payments by industry

In the March quarter, the largest portion of JobKeeper payments remained distributed to large employing industries such as Construction, Professional, Scientific and Technical Services, and Accommodation and Food Services.

JobKeeper payments relative to compensation of employees (COE) fell across all industries and reflects both the decline in JobKeeper payment rates and continued rise in economic activity. The easing of COVID-19 containment measures led to increased economic activity, growth in employment and hours worked.

Figure 2: JobKeeper payments by industry
	JobKeeper relative to COE (RHS) (%)	JobKeeper level (LHS) (bn)
Construction	5.0	0.9
Professional, Scientific and Technical Services	3.0	0.8
Accommodation and Food Services	8.1	0.6
Administrative and Support Services	4.1	0.6
Transport, Postal and Warehousing	4.7	0.5
Other Services	7.8	0.5
Manufacturing	2.1	0.4
Retail Trade	2.6	0.3
Arts and Recreation Services	13.2	0.3
Health Care and Social Assistance	0.8	0.3
Education and Training	1.1	0.2
Rental, Hiring and Real Estate Services	4.7	0.2
Wholesale Trade	1.5	0.2
Financial and Insurance Services	1.1	0.1
Agriculture, Forestry and Fishing	5.2	0.1
Information Media and Telecommunications	2.7	0.1
Public Administration and Safety	0.1	0.0
Mining	0.3	0.0
Electricity, Gas, Water and Waste Services	0.4	0.0

Figure 2: JobKeeper payments by industry

["","JobKeeper relative to COE (RHS)","JobKeeper level (LHS)"]

[["Construction","Professional,\u00a0Scientific\u00a0and\u00a0Technical\u00a0Services","Accommodation\u00a0and\u00a0Food\u00a0Services","Administrative\u00a0and\u00a0Support\u00a0Services","Transport,\u00a0Postal\u00a0and\u00a0Warehousing","Other\u00a0Services","Manufacturing","Retail\u00a0Trade","Arts\u00a0and\u00a0Recreation\u00a0Services","Health\u00a0Care\u00a0and\u00a0Social\u00a0Assistance","Education\u00a0and\u00a0Training","Rental,\u00a0Hiring\u00a0and\u00a0Real\u00a0Estate\u00a0Services","Wholesale\u00a0Trade","Financial\u00a0and\u00a0Insurance\u00a0Services","Agriculture,\u00a0Forestry\u00a0and\u00a0Fishing","Information\u00a0Media\u00a0and\u00a0Telecommunications","Public\u00a0Administration\u00a0and\u00a0Safety","Mining","Electricity,\u00a0Gas,\u00a0Water\u00a0and\u00a0Waste\u00a0Services"],[[5],[3],[8.1],[4.1],[4.7],[7.8],[2.1],[2.6],[13.2],[0.8],[1.1],[4.7],[1.5],[1.1],[5.2],[2.7],[0.1],[0.3],[0.4]],[[0.932],[0.819],[0.622],[0.593],[0.528],[0.479],[0.374],[0.346],[0.303],[0.266],[0.248],[0.24],[0.192],[0.148],[0.125],[0.121],[0.027],[0.021],[0.017]]]

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Of total JobKeeper, 84.6% were tier 1 and 15.4% were tier 2 payments. Industries with the highest composition of casual and part-time workers received the lowest proportion of tier 1 payments. These industries included Arts and Recreation, Education and Training, Accommodation and Food Services, and Retail Trade.

Figure 3: JobKeeper tiers relative to total payment by industry
	Tier 1 Proportion (%)	Tier 2 Proportion (%)
Agriculture, Forestry and Fishing	92.1	7.9
Mining	95.3	4.7
Manufacturing	93.5	6.5
Electricity, Gas, Water and Waste Services	94.6	5.4
Construction	93.3	6.7
Wholesale Trade	92.5	7.5
Retail Trade	84.6	15.4
Accommodation and Food Services	82.7	17.3
Transport, Postal and Warehousing	92.9	7.1
Information Media and Telecommunications	78.8	21.2
Financial and Insurance Services	91.2	8.8
Rental, Hiring and Real Estate Services	90.0	10.0
Professional, Scientific and Technical Services	88.3	11.7
Administrative and Support Services	87.9	12.1
Public Administration and Safety	89.1	10.9
Education and Training	76.1	23.9
Health Care and Social Assistance	79.4	20.6
Arts and Recreation Services	74.6	25.4
Other Services	83.4	16.6

Figure 3: JobKeeper tiers relative to total payment by industry

["","Tier 1 Proportion","Tier 2 Proportion"]

[["Agriculture,\u00a0Forestry\u00a0and\u00a0Fishing","Mining","Manufacturing","Electricity,\u00a0Gas,\u00a0Water\u00a0and\u00a0Waste\u00a0Services","Construction","Wholesale\u00a0Trade","Retail\u00a0Trade","Accommodation\u00a0and\u00a0Food\u00a0Services","Transport,\u00a0Postal\u00a0and\u00a0Warehousing","Information\u00a0Media\u00a0and\u00a0Telecommunications","Financial\u00a0and\u00a0Insurance\u00a0Services","Rental,\u00a0Hiring\u00a0and\u00a0Real\u00a0Estate\u00a0Services","Professional,\u00a0Scientific\u00a0and\u00a0Technical\u00a0Services","Administrative\u00a0and\u00a0Support\u00a0Services","Public\u00a0Administration\u00a0and\u00a0Safety","Education\u00a0and\u00a0Training","Health\u00a0Care\u00a0and\u00a0Social\u00a0Assistance","Arts\u00a0and\u00a0Recreation\u00a0Services","Other\u00a0Services",""],[[92.1],[95.3],[93.5],[94.6],[93.3],[92.5],[84.6],[82.7],[92.9],[78.8],[91.2],[90],[88.3],[87.9],[89.1],[76.1],[79.4],[74.6],[83.4],[null]],[[7.9],[4.7],[6.5],[5.4],[6.7],[7.5],[15.4],[17.3],[7.1],[21.2],[8.8],[10],[11.7],[12.1],[10.9],[23.9],[20.6],[25.4],[16.6],[null]]]

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Boosting cash flow for employers by industry

In addition to JobKeeper, the Government continued to support small and medium-sized businesses and not-for-profit employers with the Boosting cash flow for employers policy.

Figure 4: Boosting cash flow for employers
	Boosting cash flow for employers relative to operating surplus (RHS) (%)	Boosting cash flow for employers (LHS) (bn)
Construction	0.9	0.2
Professional, Scientific and Technical Services	1.0	0.1
Health Care and Social Assistance	1.1	0.1
Retail Trade	0.8	0.1
Accommodation and Food Services	1.7	0.1
Other Services	3.7	0.0
Manufacturing	0.3	0.0
Transport, Postal and Warehousing	0.3	0.0
Administrative and Support Services	1.6	0.0
Wholesale Trade	0.3	0.0
Rental, Hiring and Real Estate Services	0.3	0.0
Agriculture, Forestry and Fishing	0.3	0.0
Financial and Insurance Services	0.1	0.0
Education and Training	0.4	0.0
Arts and Recreation Services	0.6	0.0
Information Media and Telecommunications	0.1	0.0
Electricity, Gas, Water and Waste Services	0.0	0.0
Public Administration and Safety	0.1	0.0
Mining	0.0	0.0

Figure 4: Boosting cash flow for employers

["","Boosting cash flow for employers relative to operating surplus (RHS)","Boosting cash flow for employers (LHS)"]

[["Construction","Professional,\u00a0Scientific\u00a0and\u00a0Technical\u00a0Services","Health\u00a0Care\u00a0and\u00a0Social Assistance","Retail\u00a0Trade","Accommodation\u00a0and\u00a0Food\u00a0Services","Other\u00a0Services","Manufacturing","Transport,\u00a0Postal\u00a0and\u00a0Warehousing","Administrative\u00a0and\u00a0Support\u00a0Services","Wholesale\u00a0Trade","Rental,\u00a0Hiring\u00a0and\u00a0Real\u00a0Estate\u00a0Services","Agriculture,\u00a0Forestry\u00a0and\u00a0Fishing","Financial\u00a0and\u00a0Insurance\u00a0Services","Education\u00a0and\u00a0Training","Arts\u00a0and\u00a0Recreation\u00a0Services","Information\u00a0Media\u00a0and\u00a0Telecommunications","Electricity,\u00a0Gas,\u00a0Water\u00a0and\u00a0Waste\u00a0Services","Public\u00a0Administration\u00a0and\u00a0Safety","Mining"],[[0.9],[1],[1.1],[0.8],[1.7],[3.7],[0.3],[0.3],[1.6],[0.3],[0.3],[0.3],[0.1],[0.4],[0.6],[0.1],[0],[0.1],[0]],[[0.15],[0.105],[0.056],[0.054],[0.05],[0.044],[0.033],[0.032],[0.031],[0.028],[0.028],[0.026],[0.023],[0.012],[0.009],[0.007],[0.003],[0.003],[0.002]]]

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Industries with high shares of small and medium-sized businesses received the largest portion of Boosting cash flow for employers payments. These included Construction, Professional, Scientific and Technical Services and Health Care and Social Assistance.

Boosting cash flow for employers relative to operating surplus were highest in the Administrative and Support Services (1.6%), Accommodation and Food Services (1.7%), and Other Services (3.7%) industries.

Boosting cash flow for employers relative to operating surplus in the Construction industry was 0.9%, down from 6.5% in the December quarter. This reflects continued recovery in this industry with easing of COVID-19 related restrictions and increased demand with the introduction of Government stimulus, such as HomeBuilder.

Taxes less subsidies on production and imports

Taxes less subsidies on production and imports rose 62.3%, following a record rise in December quarter 2020. Taxes on production and imports rose 8.2%, driven by payroll tax (20.3%), tax on financial and capital transactions (20.8%), taxes on international trade (14.5%) and goods and services tax (3.1%). Subsidies on production and imports continued to fall from record high levels, driven by falls in both JobKeeper and Boosting cash flow for employers.

Figure 5: Taxes less subsidies on production and imports
	Taxes less subsidies on production (bn)	Taxes on production and imports (bn)	Less subsidies on production (bn)
Mar-11	34.3	38.6	-4.3
Jun-11	33.8	38.5	-4.7
Sep-11	33.9	38.7	-4.7
Dec-11	34.3	38.9	-4.6
Mar-12	35.0	39.7	-4.8
Jun-12	35.1	39.8	-4.8
Sep-12	36.4	42.0	-5.5
Dec-12	36.9	42.5	-5.7
Mar-13	36.9	42.6	-5.7
Jun-13	38.1	43.9	-5.7
Sep-13	38.9	45.1	-6.1
Dec-13	39.2	45.3	-6.1
Mar-14	39.9	45.8	-6.0
Jun-14	40.1	46.4	-6.2
Sep-14	39.3	44.9	-5.5
Dec-14	39.9	45.2	-5.3
Mar-15	40.8	46.3	-5.6
Jun-15	40.7	46.4	-5.6
Sep-15	42.5	48.2	-5.5
Dec-15	42.6	48.3	-5.5
Mar-16	42.8	48.4	-5.7
Jun-16	43.3	49.1	-5.7
Sep-16	43.0	48.7	-5.7
Dec-16	44.0	49.6	-5.7
Mar-17	45.4	51.0	-5.6
Jun-17	45.6	51.6	-5.8
Sep-17	46.1	51.9	-5.8
Dec-17	47.0	52.6	-5.8
Mar-18	47.4	53.0	-5.6
Jun-18	47.9	53.9	-5.8
Sep-18	48.3	54.2	-5.8
Dec-18	48.3	54.0	-5.9
Mar-19	48.3	54.2	-5.9
Jun-19	49.6	55.4	-5.6
Sep-19	49.9	55.9	-5.8
Dec-19	49.9	55.5	-5.8
Mar-20	50.3	56.0	-5.7
Jun-20	-9.3	49.4	-58.7
Sep-20	-4.7	53.3	-57.8
Dec-20	28.1	55.4	-27.5
Mar-21	45.7	60.0	-14.3

Figure 5: Taxes less subsidies on production and imports

["","Taxes less subsidies on production","Taxes on production and imports","Less subsidies on production"]

[["Mar-11","Jun-11","Sep-11","Dec-11","Mar-12","Jun-12","Sep-12","Dec-12","Mar-13","Jun-13","Sep-13","Dec-13","Mar-14","Jun-14","Sep-14","Dec-14","Mar-15","Jun-15","Sep-15","Dec-15","Mar-16","Jun-16","Sep-16","Dec-16","Mar-17","Jun-17","Sep-17","Dec-17","Mar-18","Jun-18","Sep-18","Dec-18","Mar-19","Jun-19","Sep-19","Dec-19","Mar-20","Jun-20","Sep-20","Dec-20","Mar-21"],[[34.3],[33.8],[33.9],[34.3],[35],[35.1],[36.4],[36.9],[36.9],[38.1],[38.9],[39.2],[39.9],[40.1],[39.3],[39.9],[40.8],[40.7],[42.5],[42.6],[42.8],[43.3],[43],[44],[45.4],[45.6],[46.1],[47],[47.4],[47.9],[48.3],[48.3],[48.3],[49.6],[49.9],[49.9],[50.3],[-9.3],[-4.7],[28.1],[45.7]],[[38.6],[38.5],[38.7],[38.9],[39.7],[39.8],[42],[42.5],[42.6],[43.9],[45.1],[45.3],[45.8],[46.4],[44.9],[45.2],[46.3],[46.4],[48.2],[48.3],[48.4],[49.1],[48.7],[49.6],[51],[51.6],[51.9],[52.6],[53],[53.9],[54.2],[54],[54.2],[55.4],[55.9],[55.5],[56],[49.4],[53.3],[55.4],[60]],[[-4.3],[-4.7],[-4.7],[-4.6],[-4.8],[-4.8],[-5.5],[-5.7],[-5.7],[-5.7],[-6.1],[-6.1],[-6],[-6.2],[-5.5],[-5.3],[-5.6],[-5.6],[-5.5],[-5.5],[-5.7],[-5.7],[-5.7],[-5.7],[-5.6],[-5.8],[-5.8],[-5.8],[-5.6],[-5.8],[-5.8],[-5.9],[-5.9],[-5.6],[-5.8],[-5.8],[-5.7],[-58.7],[-57.8],[-27.5],[-14.3]]]

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