Australian budgetAustralian Economy

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

Leith van Onselen
Tuesday, 27 October 2020
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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.