Taxpayers to fund $1.3b entitlements ‘tidal wave’ for failed business

Tuesday 27 October 2020

The Fair Entitlements Guarantee (FEG) covers the payment of workers’ entitlements if their employer collapses without sufficient money to cover them.

Modelling conducted by the Attorney-General’s department predicts the FEG will have to cover around $500 million in payments in 2021-22 and that the scheme will cost around $1.3 billion in total over the next three years:

Officials from the Attorney-General’s Department detailed a big rise in the amount of money expected to be paid out under the government’s Fair Entitlements Guarantee Scheme, with the amount jumping from $162.3m in 2019-20 to a forecast $468m this financial year.

According to projections provided to a Senate estimates hearing on Monday, the amount to be paid out will rise to $500m next financial year, while the amount budgeted for 2022-23 is $374m.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.