• JobKeeper is set to cost an additional $15 billion, blowing the program out to around $102 billion in total.
• The extra funding can be attributed directly to the Victorian lockdown, Treasurer Josh Frydenberg confirmed on Friday.
• It comes as a result of more businesses relying on the subsidy, and the government’s decision to loosen eligibility requirements in order for more to qualify.
• Visit Business Insider Australia’s homepage for more stories.

If the federal government’s JobKeeper wage subsidy is the barometer of how well things are going in the Australian economy, it’d be flashing red right about now.

On Friday, Treasurer Josh Frydenberg confirmed the cost of the wage subsidy program is set to blow out above $100 billion as a new economic reality sets in.

In total, an additional $15 billion is expected to support businesses and workers in need as the country faces an economic crunch. Combined with the program’s extension to March next year, the grand total now sits at around $102 billion. Still pretty far off Treasury’s original $130 billion miscalculation, but rising nonetheless.

It comes as Victoria’s six weeks of tough, stage four lockdown is projected to drag down Australia’s recovery and cost as much as $12 billion.

As a result of the severe economic crunch in the southern state, there will be yet another crop of businesses dependent on the subsidy to survive beyond the end of the year. An extra half a million Victorians will receive the subsidy as a result.

Accounting for the remainder of the blowout is the fact that many more businesses will now meet JobKeeper’s watered-down eligibility criteria from September. To qualify, businesses will only be required to demonstrate a fall in quarterly turnover compared to the same period the year before.

Previously, they would have needed to show a fall in turnover on the previous quarter. As a result, even more businesses will join the eligibility pool as the economy groans.

It is no doubt a shock to the Morrison government’s bottom line. While it had wanted to taper back its cornerstone programs as the national economy looked to be back on track, it’s now had to expand support even further as the outlook darkens.

While the federal government may have been dragged somewhat reluctantly into this position by the flow-on effects of a Victoria that has been unable to contain its virus outbreaks, the additional support will be welcome relief for workers themselves.

It’s expected more than 500,000 extra workers will now be spared from unemployment, as the subsidy keeps more businesses afloat.

Failing to do so would have only exacerbated Australia’s woes at a time it really doesn’t need it.

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