Political consultant Jim Middleton has warned that the cost of extending the JobSeeker and JobKeeper payments could exceed the government’s projections in the case of further economic downturn.

The Morrison government on Tuesday unveiled a plan to extend the JobKeeper program to March next year as well as the JobSeeker payments until the end of 2020 at lower rates from the end of September.

“Now, the opportunity is there for better targeting and possibly for reduction,” Mr Middleton told Sky News.

“My word of caution though is this it assumes on the part of Treasury that the economy, the improvement in growth we saw recently, will continue through the final quarter of the year.

“If it does not then, of course, the number of people who will be on JobSeeker, if not JobKeeper, will increase and go above and beyond the government’s estimates on what it’s going to cost which is around an additional $20 billion.”

He said many businesses across the country had become reliant on rent and loan repayment deferrals over the last three or four months under government support schemes.

“If they’re not able to return to regular levels of business then I suspect that the amount of money that is being outlaid on JobKeeper and JobSeeker will be significantly higher than is currently being estimated,” Mr Middleton said.

Image: Getty

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