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A Tale of Two Wage Subsidies: The American and Australian Fiscal Responses to COVID-19

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  • Steven Hamilton

Abstract

In July 2020, COVID-19 had been suppressed in Australia but continued to spread across the United States. Both countries instituted lock-downs and fiscal support, but Australia experienced a milder recession, highlighting the role of public health measures in protecting the economy. Cash stimulus is less useful than in a normal recession, justifying wage subsidies encouraging businesses to retain workers. The Australian wage subsidy, delivered via the tax authority, was better targeted, more generous, more accessible, but slower than the American wage subsidy delivered via banks. The experience highlights the need for investments in IRS infrastructure to better prepare for future crises.

Suggested Citation

  • Steven Hamilton, 2020. "A Tale of Two Wage Subsidies: The American and Australian Fiscal Responses to COVID-19," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 829-846, September.
    • Handle: RePEc:ntj:journl:v:73:y:2020:i:3:p:829-846
    DOI: 10.17310/ntj.2020.3.09
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    Cited by:

    1. Halima Jibril & Stephen Roper & Mark Hart, 2021. "COVID-19, business support and SME productivity in the UK," Working Papers 005, The Productivity Institute.
    2. Daigo Nakata, 2023. "Emergency Economic Response and Evaluation in the COVID-19 Crisis," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 19(4), pages 1-25, November.
    3. Smart, Michael & Kronberg, Matthew & Lesica, Josip & Liu, Huju, 2025. "The employment effects of a pandemic wage subsidy," Journal of Public Economics, Elsevier, vol. 246(C).
    4. James Bishop & Iris Day, 2020. "How Many Jobs Did JobKeeper Keep?," RBA Research Discussion Papers rdp2020-07, Reserve Bank of Australia.
    5. Lee, Jun Seop & Chung, Byung Do, 2022. "Effects of government subsidy programs on job creation for sustainable supply chain management," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).

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