2GB MONEY NEWS
WEDNESDAY, 13 JANUARY 2020
SUBJECT: Companies using JobKeeper to pay out executive bonuses.
BROOKE CORTE, HOST: What do you reckon, should Premier return the millions received in JobKeeper payments to the taxpayer?
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Absolutely, they should. Premier was perfectly within their rights to apply for the money. But given that they had a more profitable year in 2020 than in 2019, it beggars belief that they think that they can have their hand out for taxpayer cash. Now we've got a million people out of work, we've got another nearly million who would like to get more hours. People's unemployment benefits are being cut and the unemployment rate isn't expected to return to pre-pandemic levels for a number of years. So we just don't have the spare government cash to be subsidising big dividends to billionaires and bonuses to multi-million dollar CEOs.
CORTE: Yeah. Problem is though, as you said, they were eligible. They took it, did nothing wrong. It's just really a moral question at this point about whether they feel bad about it.
LEIGH: Yeah, that's absolutely right, Brooke. But your point about Toyota is the key one there. When Toyota’s CEO Matthew Callachor said that he was returning the money, he said they'd done that on the basis that it was the right thing to do as a responsible corporate citizen. What Toyota has recognised but Premier hasn't is that companies aren't just there for the shareholders. They're also there for their workers, for their customers and for the broader public. That's why we give them a licence to operate as companies. And the notion that companies can do as they wish and simply focus on shareholders and executives is an old fashioned one, and I think will come back to bite Premier if it doesn't do the right thing.
CORTE: You think it's a breach of its social licence to operate?
LEIGH: Absolutely, it is. You know, the way in which Premier qualified for JobKeeper was they shut down stores for a month. But then sales came roaring back, they've had a profit bonanza. And the fact is that JobKeeper was a program designed to help keep battlers in work, not keep billionaires in champagne. And yet billionaires like Solomon Lew, Harvey Norman, James Packer have directly benefited through their companies becoming eligible for JobKeeper. It's just frankly a misuse of the scheme.
CORTE: Yeah, I think the Treasurer has now effectively ruled out extending JobKeeper beyond the March expiry date, as of this week. Do you think JobKeeper has run its course?
LEIGH: JobKeeper should be extended while the economy is still fragile. We've had these continued border shutdowns. Australia is slow to get the vaccine as a result of the federal government not having lined up enough vaccine deals. And so we have a whole lot of people who are really at their wit's end - people in the university sector, short term casuals who were structurally shut out of JobKeeper, people in the arts sector for whom JobKeeper just didn't work. There are many ways in which JobKeeper could be extended to help people who are struggling, and one of the ways of supporting that is that people who don't need JobKeeper pay the money back. Firms are doing this in New Zealand, but very few in Australia.
CORTE: How do you think JobKeeper gets extended? Because as we've just talked about, in essence, it was clunky and some businesses got it that probably shouldn't have. You know, jobs have been supported that probably wouldn't have existed otherwise. There's a lot of problems, I guess, in general in extending the program as it is.
LEIGH: Brooke, you’re right that JobKeeper can't continue forever, although other countries have wage subsidy schemes that do endure. But the fact is that the Australian economy is in a fragile state. It wasn't particularly strong before we went into the pandemic, we had serious problems around productivity, around sluggish wage growth. The business start-up rate had fallen. But even now, we have an economy which is really just limping along. If you look at the number of actual hours worked, that's well below where it was in pre pandemic levels, as Greg Jericho has recently pointed out. The share of prime-age men working full time is still well down. So there's a number of key economic indicators that I've been watching carefully which suggest that the economy needs significantly more support.
CORTE: What about the 250,000 new workers needed in the jobs vacancy numbers today, hitting pre pandemic levels? We have bounced back.
LEIGH: There are certainly areas in which we've got skill shortages, and you'll find that even in the depths of the worst recessions. But the fact is that you've got two million Australians who are out of work or want more hours. So overall, this is a real buyers’ market for workers. There are a lot of people who would like the chance to work, and there's a lot of fragility in the economy right now. The Reserve Bank's cut interest rates down to zero and so really, that puts the onus right back on the Treasurer. Fiscal policy needs to do more.
CORTE: Andrew Leigh, Shadow Assistant Minister for Treasury, thank you very much for your time on Money News.
LEIGH: Always a pleasure, Brooke.
Authorised by Paul Erickson, ALP, Canberra.