ABC RADIO CANBERRA
TUESDAY, 7 APRIL 2020
SUBJECTS: The need for Parliament to keep sitting; JobKeeper payments for casuals and migrant workers; charities unable to access JobKeeper payments; coronavirus modelling.
ADAM SHIRLEY, HOST: And it's the federal government's response for weeks now that you've probably been hanging on. What immediate financial relief is available to you? Where can you go? Where can't you? How clear is that advice from the federal government? Dr Andrew Leigh is a former professor of economics at the ANU. He's also the Federal Member for Fenner, a Labor member, and he's with us now on ABC Radio Canberra. Dr Leigh, good morning to you.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Good morning, Adam. Great to be with you and your listeners.
SHIRLEY: How well are the economic measures taken by the Government working, in your view?
LEIGH: I think they'll have a significant effect. The estimate from Westpac is that if we hadn't had the wage subsidy the Parliament will pass tomorrow, unemployment would have hit 17 per cent. Westpac is now forecasting it'll hit 9 per cent. Now 9 per cent is still awful, but it's almost a halving of the unemployment rate as a result of this package. With stimulus 1 and 2, Labor said we welcomed them but they didn't go far enough, and that we needed to do what other countries have done and provide significant wage subsidies. And I'm pleased that Parliament will be passing those tomorrow.
SHIRLEY: How much do you applaud Prime Minister Scott Morrison and Treasurer Josh Frydenberg amongst others for seeing the lay of the land, seeing escalation in cases and the damage economically, and reacting to it?
LEIGH: They’ve acted appropriately. I think the government could have moved more quickly on some of the health measures. The government could have moved more quickly on some of the economic measures. On health, Labor was calling on the Government to accelerate social distancing and also to roll out things like telehealth, and I'm pleased that that got done. On the economic front, the wage subsidy measure was something we called for when Parliament was last sitting. That's now happening, but in the interim we've got businesses closing their doors and people losing their jobs. We'd like to see it expanded too. We don't see why the bright line needs to be casuals who have only been employed for a year or more, and I'm concerned particularly for the impact on charities like UnitingCare that operates a whole lot of early childhood centres here in the ACT. They're telling me they'll be excluded from the JobKeeper package and that'll have an impact on whether they're able to maintain jobs.
SHIRLEY: Is that taking into account though yesterday's announcement from the Government that the baseline of turnover is going to be lower, the process and the support for charities is going to be expanded across the board, and I think now the threshold of income loss is only 15 per cent compared to 30 per cent prior to yesterday's announcement.
LEIGH: Yes, Adam, this is taking that into account. I've welcomed that measure. I thought it was a step in the right direction, but I've had a number of significant charities tell me since that that's not going to work for them. That includes Anglicare, UnitingCare, Oxfam, Samaritans, Fred Hollows. There's a range of big Australian charities that say that the Government hasn't gone far enough to ensure that they're able to do their work in the community. And we need more now than ever before, Adam.
SHIRLEY: So if they're saying that the revised and expanded scheme for charities still isn't going to cut it, what is it they do want?
LEIGH: One of the proposals that they're making is that there be an exclusion of grant income. So one of the odd things about this is when you're looking at revenue, you're including grants that might be received for bushfire relief or indeed for supporting the community during the coronavirus crisis. Charities are saying that should be put to one side and you should focus on the income that they're getting from donations, which has absolutely cratered. Charities also point out that unlike a business, they can't really take those grants and spend them on something that they weren't provided for. So you can't take an aged care grant and use it to support your mental health work. Contracts don't work that way.
SHIRLEY: Andrew Leigh, you also said that those who are working but under various contract situations should get more support. What degree of financial support would temporary workers need in this situation? I'm thinking of temporary migrant skilled workers, those who are on a fixed I suppose period of income for a particular job.
LEIGH: Well, they’re economic participants just like everyone else. So if you're talking about reducing the economic shock, it doesn't seem obvious to me why you'd exclude those people from the JobKeeper package. You've also got a situation where you might have people who are employed in a business which is operated by a temporary migrant. Those businesses aren't eligible, so their employees aren’t eligible and that again exacerbates the damage. Now the ideal thing with this is you have a package that effectively presses pause in the economy, that allows us to ensure that all of the social relationships that hold the economy together are still intact when the economy gets going again when a vaccine is found. Those social relationships include temporary migrants as much as permanent residents and citizens.
SHIRLEY: So if that economic support were forthcoming, should it or how should it mirror what casual workers, full time or part time workers are going to get?
LEIGH: You need to apply an economic lens to this rather than slicing and dicing it, and saying ‘we're just going to draw a line and exclude short term casuals, we're in a draw a line and exclude temporary migrants’. Let's just think about the economy as a whole. Let's think about the society as a whole. What's vital right now is we're working together, rather than excluding people from the application of these packages. They’re good packages. This will be the biggest package that’s ever passed by the Parliament tomorrow. So it's a massive amount of money, but we've got to make sure that it's extending right across the economy so we do the most to avert the long term joblessness. The pain of that falls on the most vulnerable. It will be those with less formal education, people with disabilities, Indigenous Australians who are left most scarred in an economy in which joblessness takes a long time to return to where it was.
SHIRLEY: 18 to 10. Adam Shirley with you on ABC Radio Canberra, as is Dr Andrew Leigh. He's the Federal Member for Fenner. He trained in economics at the Australian National University, and we're talking about will be economic stimulus and other federal government responses to COVID-19. Of course, Parliament sitting tomorrow to pass a variety of these packages into law. Dr Leigh, how important is the release today of scientific COVID-19 modelling by the Government to demonstrate these decisions, to demonstrate the restrictions that have been put in place?
LEIGH: I think it's useful to have more information out there. We've been calling for the release of greater modelling. That provides a greater sense of confidence in the Government when people are able to see that the science that they're relying on is first rate. The Government has broadly done a good job in terms of communicating with the public. You've also had people like Norman Swan, who's really come into his own at the moment. We appear to be on a trajectory which is different from the United States and Italy. That's encouraging, but we've got to maintain these measures. And so I welcome the measures that the Government has taken, and also just I want to honour all of the Canberrans who were making sacrifices in their daily lives in order to keep them and their neighbours safe. This is a really hard time for people. People should know that what they're doing is the most altruistic act, to make sure that you're keeping that 1.5 metres from people, that you're washing your hands, that you're staying out of those crowded public places, that you're not going and joining a bunch of mates for a drink. All of that is hard work, but it's vital work to ensure that we come through this unscathed.
SHIRLEY: And on parliamentary business, what is your understanding of when Parliament will or won't sit through the autumn winter period? And should Parliament run approaching normal, albeit with reduced representatives present?
LEIGH: It should absolutely run as normal. I mean, that's what we did during the wars. That's what we did during the Spanish flu. It just doesn't make sense for Parliament to be upping sticks. We said last time when Parliament rose with the Government saying we wouldn't be back until August that the Parliament would have to resume before August. I think a normal setting schedule is appropriate to ensuring that there's oversight over this unprecedented amount of money that's being spent. It's not going to be perfect. There will be mistakes made. We need to find them and fix them as quickly as possible. That's in the national interest.
SHIRLEY: I've seen a variety of reports about what actually will occur with sitting through autumn and winter. What's your understanding of the schedule at this point?
LEIGH: The schedule right now doesn't have us coming back until August, apart from the-
SHIRLEY: After tomorrow?
LEIGH: After the one day sitting tomorrow. I don’t think that's appropriate in terms of the oversight that the Government needs. You've had Government ministers saying that they've got better things to do than be in Parliament, and frankly I think that's an arrogant approach. If you're a minister of the crown, you have an obligation to be there answering questions. You saw the Question Time last time around, Adam. It's very careful, respectful, but just going through the critical questions that Australians were asking about how the Government is managing a unique crisis and an unprecedented fiscal response.
SHIRLEY: One other key question is when and how the ongoing economic stimulus would be lifted, some of the support scaled back. Do you have a perspective on how long these various payments to people should last?
LEIGH: They should be in place for as long as it is necessary to sustain jobs. So if cafes are required to stay closed, then they need this ongoing support. One of the estimates has been that about 80 per cent of businesses in retail and hospitality would be taking advantage of these payments. The same in the arts and recreation, which has been absolutely hit. One subtlety in this, Adam, is that we need to be careful about the moment in which we lift the payments. If we do that simultaneously right across the economy, it could have quite a grinding shock. The argument that Melbourne University's Jeff Borland has made recently is that a phased lifting of the assistance could be appropriate just to ensure that that it doesn't throw the economy back into reverse gear.
SHIRLEY: So are you saying there should be maybe a variable timeline. rather than a fixed six-month, eight-month deadline if you will on a variety of these measures?
LEIGH: Yes, I think it makes sense. You just want to be careful as you remove the assistance that the economy is able to sustain itself. This virus is a massive hit to the economy. We need to be very careful about the fiscal impact, but we also need to make sure that we're not just applying blunt rules that might look good in a piece of legislation but actually on the ground have a pretty brutal effect on the labour market.
SHIRLEY: An ongoing shifting situation. We’ll look to that sitting of Parliament tomorrow on the clearance into law of many of these measures. Dr Leigh, thank you for your time.
LEIGH: Thank you, Adam.
SHIRLEY: Andrew Leigh is ALP member, Federal Member for Fenner and a former professor of economics at the Australian National University.
Authorised by Paul Erickson, ALP, Canberra.