TUESDAY, 1 SEPTEMBER 2020
SUBJECTS: JobKeeper payments; unemployment; Scott Morrison playing ‘whack a premier’.
LEON BYNER, HOST: This is a story that really needed to be out there because, as you know, the recession - and we've got one – has hit a lot of people hard. But a scheme that was designed to reduce inequality and help people out, according to my next guest, has been misused by a small number of firms who are channelling executive bonuses. Now, I would have thought that this ought to be illegal, but they've named - I'll give you some examples. Star casino. They got $64 million in JobKeeper and gave their CEO an equity bonus of $800,000. SeaLink received $8 million in JobKeeper, and gave the CEO a $500,000 bonus. Now look, there's a whole raft of companies that have done this. So let's talk to a bloke who is an expert in economics, but he speaks plain English, which is always a good thing. The Shadow Assistant Minister for Treasury and Charities, Dr Andrew Leigh. Andrew, good morning. How can this happen?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: G’day, Leon. Great to be with you. Saying that I think economics and talk English is the kindest compliment!
This is one of those instances in which firms have done the wrong thing. Not most firms, but a few firms. The fact is, if you're putting your hand out for taxpayer support, which is absolutely the right the right thing to do in order to keep people in work, then you can’t then turn around and use that money to subsidise people in the executive suites. People already on seven figure salaries shouldn't have their salaries topped up using taxpayer handouts. It's as simple as that.
BYNER: As a number of these companies have been outed, what happens now? They just get embarrassed, or they give the JobKeeper money back? What happens?
LEIGH: The reason I raised it in Parliament was because I felt these firms were not doing the right thing. They weren't living up to the social contract that we expect of them. If firms are receiving taxpayer support, that taxpayer support is there for a purpose. The reason that Labor campaigned so strongly for a wage subsidy scheme, like many other countries have put in place, is because it's essential to keep unemployment down. Without the wage subsidy scheme, we would have already seen unemployment skyrocketing even worse than it has. So right now, we really need to be taking a Team Australia mentality - working together, recognising that we're a country that really prizes egalitarianism. We shouldn't have a few people on very high salaries snaffling this money for themselves.
BYNER: Well, I suspect now that this is out there and a number of these companies have been named, that will be embarrassing in and of itself. However, I think it's fair to say that if you're getting a taxpayer subsidy, the CEO shouldn't be getting a bonus because you'll have dropped 30 per cent. Whilst it might be because of COVID, I don't know that you'd still be giving the bonuses. But the other question I've got is that we've got a change at the end of September, and this is where the JobKeeper goes from 15 to 1200. Now, will this get through the Senate this week, do you think?
LEIGH: I expect so. Certainly Labor has supported JobKeeper - in fact, we called for it at the outset, and we think that JobKeeper needs to be sustained. I’m a little concerned that the government is looking at tapering it down so fast. Tomorrow we'll learn that Australia has tumbled into recession for the first time in three decades, and the government's projecting 400,000 people to lose their jobs by the end of the year. So we really do need to have that assistance targeted where it's best needed. But going back to where we started, there's a guy called Dean Paastch of Ownership Matters who has been following this very closely. As he puts it, ‘I don’t think it was ever the intention of the government to subsidise executive salaries’.
BYNER: Now, given that a lot of unemployment is coming out of Victoria - in fact, they're going to be most dependent on the subsidies - what's your observation about what's happened in that state? Of course, it's causing everybody a situation around Australia, because Victoria is still a very significant business hub. Are you hopeful that some of these restrictions that have existed there for a while will be lightened?
LEIGH: I certainly am, but that's going to be based on the health situations on the ground. We have pretty good evidence from the flu pandemic in 1918 that cities which put in place firm restrictions on movement also saw greater economic growth afterwards. So it's not a trade off between public health and economics. The fact is, if you want economic growth, then you need to get the virus under control. And, you know, I really wish Scott Morrison would use the national cabinet rather than playing whack-a-premier.
BYNER: But the thing is this, how does he get states to cooperate if they meet with him, say ‘yes yes yes’, nod in approval, and then go away and do something different?
LEIGH: I'm old enough to remember a Liberal party that talked a lot about states’ rights. The fact is the states have a pretty good track record of this. Back when the federal government was calling on Annastacia Palaszczuk to open the Queensland borders to Victoria, she was right and they were wrong. When they backed Clive Palmer in his case against Mark McGowan to open the Western Australian borders, Mark McGowan was right, Scott Morrison was wrong. And Labor’s also backed Liberal premiers like Stephen Marshall and Peter Gutwein, who put border closures in place. Labor’s taken the approach of saying that the border closures are a matter for premiers, in consultation with health experts, to manage. If the national cabinet meant anything, it would mean some sense of solidarity, a sense that we're all in this together. Scott Morrison was singing from that hymn sheet back in March, but he's very much changed his tune since.
BYNER: Well, the thing is, he wants borders open as soon as possible. And of course, the aviation industry, of whom there are so many people working or on job subsidies or they've been made redundant - they may not get their jobs back.
LEIGH: That’s absolutely right, and one of the things that I've been concerned about, Leon, is the way in which the economy is steadily shifting the longer this shutdown goes on. That isn't the fault of premiers. It's just a natural result of what we're seeing. We’re seeing a move back from urbanisation, seeing increased automation in workplaces. We’re increasingly seeing people moving away from office work, and all of that is going to have ripple effects on how people live their lives and on the structure of the economy. Right now, we know all hands to the wheel to make sure that we ensure that we don't have a significant rise in unemployment. Unemployment takes twice as long to get back down as it did to go up. So if you lose jobs, it endures. It takes a lot more time to build an employment relationship than it does to break one.
BYNER: Andrew Leigh, thanks for joining us. That’s the Shadow Assistant Minister for Treasury and Charities, making the point that if somebody in the company is getting significant amounts of JobKeeper, they shouldn't be paying their bosses very substantial bonuses.
Authorised by Paul Erickson, ALP, Canberra.