From Morrison Stagnation to Morrison Recession - Transcript, 2SM Sydney





SUBJECTS: Cuts to JobKeeper and JobSeeker; Morrison Stagnation turns into Morrison Recession; the need to invest in education; firms treating JobKeeper like BonusKeeper.

MARCUS PAUL, HOST: Let's speak to Andrew Leigh, the Shadow Assistant Minister for Treasury now on this issue, at 12 and a half minutes after seven. Andrew, good morning to you, mate.


PAUL: Yeah. Nice to speak to you again. I spoke to Katy Gallagher yesterday and like Katy, you and I go back to Canberra days. How are things?

LEIGH: Canberra’s going well. We’re heading into the ACT election on October 17, and the place is starting to warm up. Spring has sprung. I was out running at 5.30 this morning with the light up and the kookaburras going and the beautiful bush. It's a great place. 

PAUL: Yeah, it is. Always, you know, fond of Canberra and I'll sell it whenever I can. It's a gorgeous place. No Floriade as per normal this year, but those million odd bulbs being planted around the city, it'd be very pretty this time of the year.

LEIGH: It certainly is. It's a great place to live, and I hope that as restrictions lift many Australians will pay a visit. Come down, see the War Memorial, spend some time at the National Portrait Gallery, check out Questacon and the National Library. So many great things to do here once domestic tourism opens up again. 

PAUL: Alright, now you heard my conversation with the listener just a moment or two ago. A lot of people have fallen through the cracks. Now we know Labor, the federal opposition, are calling for an extension if you like to JobKeeper and JobSeeker. What's your point of view on all of this Andrew? 

LEIGH: I thought Petros' story really summed it up there, that this is the wrong time to be withdrawing support from the economy. We know that for every available job, there's 13 people looking to fill it. So people aren’t out of work for lack of trying, they're out of work because there's just a lack of demand. What I worry about with the government at the moment is that last year we had the Morrison Stagnation, with productivity going backwards, growth lacklustre and a lack of business investment. Now we've moved into the Morrison Recession, but there's no sense that the government has a real long term plan as to where the jobs of the future come from. They seem to be dipping into the compost bin of rotting Liberal Party ideas rather than really looking at fresh notions as to how to get the get the place going again. 

PAUL: All right, well come on. Name me, name me something that's not from the - as you put it - the rotting Liberal Party bin of ideas. What is something that Labor could do in all honesty to help reinvigorate the economy and, you know, rather than the slogans of jobs, jobs and more jobs, what would you do Andrew?

LEIGH: Well, the smart play now has got to be about education, Marcus. We know it'll take a little while for demand to come back, so the right thing to do is to skill up the workforce. The Grattan Institute's got a proposal for an intensive tutoring program that would cost a billion dollars and would bring disadvantaged kids back to where they would have been if they hadn't missed so much school this year. There's a whole lot of people suggesting that we should expand university places, so that every kid with the smarts to go to uni has a place waiting there for him or her. In the early 90s recession, we saw a big increase in the share of kids finishing year 12, and a generation on the corresponding move has to be a big increase in the share of kids attending university. Because we’ve got to remember that kids leaving uni now will be in the workforce until 2060, 2070, 2080. And so we've got to be skilling them up for a much more technologically advanced world. 

PAUL: Yep. All right. JobKeeper, JobSeeker. I mean, these - Greens, I think, take it to an extreme. I mean, they're talking about having the current figure, if you like the tiered off figure that it sits at now, for JobSeeker to remain at this level indefinitely. I don't know whether economically that's viable. We need to find some kind of maybe compromise somewhere in the middle. I mean, some politicians like Pauline Hanson suggest $75 a day, rather than you know the old 40 bucks a day. I mean, that's not sustainable obviously, for anybody to live on 40 bucks a day. What's Labor's stance on JobSeeker, for instance?

LEIGH: We haven't picked a precise figure, Marcus. But we’ve certainly said that at the moment, it isn't the time to be cutting right back. You look at many other countries and they tailor the generosity of unemployment payments to the state of the economy, recognising that when there aren't the jobs around you can't just beat people with a stick and expect them to go out and find non-existent jobs. And of course, you've got to remember that money paid out as JobSeeker is money that goes straight back into the economy. People on unemployment benefits are spending everything they've got, and so that's effectively flowing out into retail, into cafes, it’s allowing people to pay the rent. It's keeping the economy going. Whereas to give high end tax cuts, a big chunk of that money gets saved and so it has much less of an impact on simulating the economy than raising JobSeeker.

PAUL: Just on the issue of tax cuts, there's been a lot of criticism of the Morrison Governments - I mean, they haven't even been brought forward yet. They're just discussions at this point in time. But is it true? I mean, do we believe - are we right to believe that the forecast job cuts will be better for those high income earners rather than average ordinary wage earners in Australia?

LEIGH: The forecast tax cuts, you mean? Yeah, I think that they’re certainly going to be going disproportionately to the most affluent. And that's again standard Liberal Party playbook, along with the idea that we need more irresponsible lending, along with the idea that we should be encouraging people to take money out of superannuation rather than putting money into superannuation. These were all Liberal Party nostrums last year, and they've just continued rolling with them this year. And they haven't been willing to crack down on some of the rorts that we've seen in JobKeeper. JobKeeper’s been a fabulous program for keeping people in work, as you know, but a few firms have been using it to pay executive bonuses, to pay out excessive dividends, in some cases into the pockets of billionaires.

PAUL:  Yeah, I don't understand. Solomon Lew. There was a story, and I'm not just picking on Solomon, but you know a story over the weekend and it's something that I think has been happening. It should be reported far more, to be perfectly honest. But, you know, it's just not the Murdoch press and otherwise. But you know, Solomon Lew and others have been propping up executive bonuses and paying dividends at the same time as receiving millions upon millions of dollars of taxpayers money for JobKeeper. I mean, that's not what the money was for, Andrew. 

LEIGH: Now you're quite right. Solomon Lew was one of those who lobbied Josh Frydenberg pretty hard to get JobKeeper in place, and his company received something in the order of $40 million of taxpayer assistance through JobKeeper. But it's enjoyed a profits growth which has been as good as last year. Profits are just where they were last year, they’ve paid out the same dividend as last year, and some $20 million of that will go into his pocket directly-

PAUL: Hang on. Sorry to interrupt you. Sorry, if their profits have been as good as what they were, you know, in the previous financial year, then how on earth are they eligible for JobKeeper? I mean, aren’t you supposed to show a reduction in productivity and a reduction in profits of, you know, a certain percentage? It was 30 to begin with. 

LEIGH: Great question, Marcus. So what happened was they had to close a range of stores in March. And so in March, they saw an immediate downturn. But then the bounce back is big enough that if you look at them over the course of the half year, they do as well as they did last year. So some firms would say in those circumstances they weren't going to take the money, or they'd say that they would certainly not be paying it out in the form of dividends. But it's this old sort of discredited Milton Friedman idea, that companies are only there for the shareholders. I think that's too narrow. Firms are there to look after the interest of the community, of their customers, of their workers. And if you take a ‘leaders eat last’ philosophy, then you don't immediately start grabbing all you can get from the taxpayer and putting it in your own pocket. 

PAUL: Andrew, good to have you on the program. We'll chat again soon, okay? Thank you.

LEIGH: Thanks, Marcus. Good to chat.


Authorised by Paul Erickson, ALP, Canberra.

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Cnr Gungahlin Pl and Efkarpidis Street, Gungahlin ACT 2912 | 02 6247 4396 | [email protected] | Authorised by A. Leigh MP, Australian Labor Party (ACT Branch), Canberra.