Labor pulling a 'stunt' on JobKeeper: PM

Colin Brinsden
Treasurer Josh Frydenberg is under pressure over the JobKeeper reporting error

Prime Minister Scott Morrison has described Labor's demand for Treasurer Josh Frydenberg to front a Senate inquiry to explain the embarrassing $60 billion JobKeeper reporting error a "stunt".

The government admitted on Friday its JobKeeper wage subsidy scheme to assist business and workers through the COVID-19 pandemic will now be $70 billion rather than $130 billion and will now only cover 3.5 million people rather than 6.5 million that had been forecast.

Chair of the Senate committee into the COVID-19 response, Labor's Katy Gallagher, has called on the treasurer to front the inquiry to explain the $60 billion bungle.

"I think if he chooses not to appear, he needs to explain why," she told reporters in Canberra on Sunday.

But a spokesman for the government told AAP that is not how the committee was set up.

"As the Labor Party know, the process for the COVID Committee is that House of Representatives ministers, if required, would appear through their representative ministers in the Senate and be supported by relevant departmental officials like takes place during Senate estimates hearings," he said.

In this case it would be Finance Minister and senator Mathias Cormann.

But Mr Morrison went further.

"To now try and change the rules exposes that as just a bit of a political stunt," he told reporters in Murrumbateman, in the seat of Eden-Monaro, where he was introducing Liberal candidate for the vacant seat Fiona Kotvojs.

Opposition frontbencher Penny Wong says it's a "$60 billion black hole in the economic credibility" of the government.

"We can't trust anything Scott Morrison or Josh Frydenberg say about the economy or the budget," Senator Wong told ABC television's Insiders program.

The prime minister explained when the program was put together it was at a time of "incredible uncertainty".

"No one could say for sure what the months ahead were going to bring," he said.

Treasury put forward an estimate of what they thought demand for the scheme would be, putting it at six million people.

"Now it is proved that has not been the case and the demand is not a s high as Treasury estimated," he said.

As a result, the program will not cost what was estimated and that means for the taxpayer, debt levels and the interest bill will be lower and the government will be able to ensure that it can continue to provide many other essential services, he said.

The government is under pressure to extend the the scheme to casuals and other worker groups that don't get the $1500 per fortnight payment and extend it beyond the six-month period.

Asked if he intends to broaden or lengthen the JobKeeper program, Mr Morrison said: "This is not free money."

Cabinet minister Angus Taylor said a review into the program would go ahead in June and all of those issues would be looked at.

"The Labor party are out campaigning saying we should spend more money. They have never seen a dollar they don't want to spend," Mr Taylor said.

But it is not just Labor that see this forecasting and accounting mistake as an opportunity to amend the scheme, such as business groups, economists and Liberal Premier Tasmanian Premier Peter Gutwein.

Mr Gutwein says the program should run for a longer period and target additional support at those industries such as tourism and hospitality that will take longer to recover.