The Federal Government’s JobKeeper scheme may need to be extended beyond its initial six-month period, the head of the Reserve Bank of Australia has said.
RBA governor Phillip Lowe fronted the inquiry into the government’s response to COVID-19 this morning and said while it’s too early to tell, an extension may need to be considered.
“Well, it’s clearly going to be a critical point when that scheme comes to an end and also when the deferral for six months of mortgage payments and other payments that the banks are offering … so that’s a critical point for the economy,” Mr Lowe said.
“I note the JobKeeper program, it’s six months, but a three-month review was built into that program and I think that was very sensible of the government to do that.
“It will be important to review the parameters of that scheme. It may be in six months’ time we bounce back well, and the economy is doing reasonably well and these schemes, which were temporary in nature, can be withdrawn without problems.
“But if the economy is not recovered reasonably well by then, as part of that review we should be looking at, perhaps, the extension of that scheme or the modification in some way.
“But I think at this point I think it’s too hard to say because the outlook remains very uncertain but it’s going to be a very critical point in the economy.”