Andrew Leigh

AS AUSTRALIA BOUNCES BACK, LET’S MAKE SURE WE’RE NOT LEAVING PEOPLE BEHIND

The Canberra Times, 18 May 2020

Recently I heard from a Canberra woman who had changed employers last November. Her new employer told her she’d start off as a casual and then transition to permanency. When coronavirus hit, and the government announced its JobKeeper wage subsidy program, she hoped that it would apply to her. But as a casual who had been with her employer for less than year, she was excluded. As she wrote to me ‘This will have a long and lasting financial impact on our family’.

In another family, I heard the story of two children, aged 18 and 21, who had each been in casual jobs for 11 months. They’re ineligible too. A local Turkish restaurant told me that half their staff were international students. Because those workers are on temporary visas, they are ineligible for JobKeeper. The restaurant owners are worried they’ll have to close permanently. They pleaded ‘Save us from folding up.’

Labor supports the JobKeeper wage subsidy scheme. More than that, we called for it. Early in the crisis when other countries had announced wage subsidy schemes, Prime Minister Scott Morrison said it wouldn’t work in Australia. It was only under pressure from business, unions and the Labor Party that Mr Morrison changed his mind, recalled parliament and enacted the JobKeeper package. It’s the most important thing the government has done.

One way to get a sense of the benefits of JobKeeper is to look at figures put out by the Reserve Bank. The bank expects a 20 per cent fall in hours worked, and for the unemployment rate to peak at around 10 per cent. Why does a 20 per cent fall in hours only lead to a 10 per cent jobless rate? The answer is JobKeeper. Without it, the nation could be looking at unemployment rates at Great Depression levels.

Wage subsidies have a strong history – as an anti-poverty measure, and a crisis response tool. But there are too many gaps in JobKeeper. It excludes a million casuals, temporary migrants, many charity workers, and virtually the entire arts sector. Like the Peanuts cartoon where Lucy keeps pulling the football away from Charlie Brown, the federal government has changed the rules three times to prevent universities from accessing JobKeeper. Universities are now shedding staff at the very time when we’re relying on university researchers to find a cure.

As often happens in recessions, the economic pain has been worst for young people and people with less education. Women have been disproportionately hurt by job losses. A quarter of arts jobs have gone. A third of hospitality jobs. As a reminder of how tough it is to live on unemployment benefits, one job seeker, Melissa Fisher, was reported as saying that under the old system, she sometimes only ate one meal a day. The recent increase in JobSeeker payments, Ms Fisher said, means she could eat fresh vegetables for the first time in years. Australia can’t allow this crisis to create a caste of economic castaways. We need to ensure that disadvantaged Australians are the focus of the national recovery.

The Coalition has come a long way since 25 February, when Mr Morrison said: ‘We’re not a government that engages in extreme fiscal responses.’ Since then, the government has announced $320 billion of measures to support business and workers—the largest fiscal package in Australian history. Having promised in 2013 to run budget surpluses every year, the coalition has delivered six deficits. Last year, they were selling ‘Back in the Black’ coffee mugs on the Liberal Party website. Now, they are on track to deliver their seventh, eighth and ninth deficit budgets. Over time, it adds up. From 2013 to 2019, the Abbott-Turnbull-Morrison Government doubled government debt. Before long, debt could be three times its level in 2013.

A deeper issue is what happens to the economy after coronavirus. Prior to the crisis, we were enduring what Crikey commentator Bernard Keane dubs ‘The Great Morrison Stagnation’: real wages going backwards, weak growth, record-high household debt, falling business investment, falling productivity, inequality too high, and social mobility too low. To set these sorry statistics as our national goal would demonstrate a timid lack of ambition.

Australia has an opportunity to emerge from this crisis a better nation. To get there, we need to open up university places, encourage firms to do more research, build more housing and encourage more start-ups. We need to improve competitiveness, raise teacher quality and ensure multinationals pay their fair share. We need to reduce carbon emissions, rebuild the relationship with China and better prepare for future risks. Australia doesn’t need the discredited throwback policies of WorkChoices and the 2014 budget. We need to spring forward to a more productive, egalitarian and connected Australia.

Andrew Leigh is the Shadow Assistant Minister for Treasury, and his website is www.andrewleigh.com.

ENDS

Authorised by Paul Erickson, ALP, Canberra.