The 250,00 to 400,000 Victorian workers expected to be thrown out of work as a result of the imposition of the hardest lockdown seen in Australia to date will be breathing a collective sigh of relief as a result of the Federal government's decision to amend the criteria for JobKeeper.
This comes on top of the recent decision to extend the scheme, which has played a pivotal role in helping millions of Australians to keep a roof over their heads and food on the table since March, for a further six months beyond its original legislated termination date.
With up to one-and-a-half million Victorians expected to be relying on the payment by early next month, it would have been a catastrophe for that state - and for two-and-a-half million other people around the country - if the program had been allowed to wind down.
One of the most significant changes was to shift the employee reference date (the relevant date of employment for an eligible employee) from March 1, 2020, to July 1, 2020. This means that many workers who had found employment since the economy started to open back up again since June will now also be eligible for JobKeeper. That tweak is potentially crucial to the economic welfare of tens of thousands of people.
The other big shift was the decision to modify the criteria for a business's eligibility for the scheme by changing the "turnover reference period". Companies now only have to demonstrate that their income has dropped by the mandated percentage (which varies according to the size of the business) over a single quarter.
This means that businesses which may have moved back towards the black during the period the pandemic was effectively under control and restrictions were being eased won't be penalised for that brief period of fiscal spring.
The combined effect of these two changes will be to increase the cost of JobKeeper by around $15.6 billion during 2020-2021. The final cost may prove to be far higher given, as the Prime Minister has stressed repeatedly, economic forecasting is extremely problematic given the speed at which the situation can change.
The really good news is that because JobKeeper is a national program, the changes announced on Friday will take effect nationwide. That is important given it is, as yet, unknown what impact the Victorian lockdown is going to have on other states. When you shut down one quarter of the national economy, albeit for the very best of reasons, it is going to have a massive flow-on effect. Jobs will be lost in every state and territory, including in the ACT, as a result of the interruption to supply lines sourcing goods and services out of Melbourne and the surrounding area.
This is a national crisis. It's not just a case of Victoria catching a bad cold and going back to bed for a bit.
The most important takeout from the changes is the timely reminder that this government, once lambasted over it's ideological commitment to economic rationalism, is willing and able to "flex" when the situation demands it.
That said, in view of the fact that many Australians are going to be on JobKeeper - and JobSeeker - for far longer than was originally expected, consideration should be given to holding off on the reductions in the level of payments due to take effect later this year.
While it is important to wean businesses off taxpayer-funded support payments once the situation eases, the reality is that we are not at that point yet.
The Treasurer's work is far from done.