Prime Minister Scott Morrison has announced the extension of the JobKeeper scheme until March 2021, which will introduce a two-tier payment system after September.

There are an estimated 3.5 million Australians on JobKeeper.

Mr Morrison said he has been told the scheme has saved businesses and saved livelihoods.

He said while the wage subsidies can’t “go on forever” there were businesses and employers facing incredible financial hardship.

“It has been a game changer for them,” he said.

The payment will be reduced to $1200 per fortnight after September, and there will be a lower payment for those working less than 20 hours a week, down to $750.

He also announced changes to the JobSeeker.

The JobSeeker unemployment benefit will be reduced from $1115 a fortnight to $815 from the end of September.

The six-month extension of JobKeeper will cost $16 billion, Treasurer Josh Frydenberg said.

Australian Small Business and Family Enterprise Ombudsman Kate Carnell told Deborah Knight it is welcome news.

“The dilemma of part-time people being paid more than they used to be paid to work was really causing some problems in lots of businesses.”

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EARLIER

Finance Minister Mathias Cormann told Ben Fordham the scaled-back rate will start “weaning” businesses off the support program.

“There will be a reapplication of the turnover test at the beginning of October and also at the beginning of January.”

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Australian Council of Social Service CEO Cassandra Goldie told Ben “this is a critical decision”.

“We’ve got about 1.6 million people waking up this morning, very anxious about what the government is going to do.

“It’s gotta be enough, and it will be a huge mistake if it was another temporary arrangement.

“We’ve got to give people and business confidence here, this is our lifeline payment for the country.”

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