Andrew Leigh

HOUSE OF REPRESENTATIVES, 13 MAY 2020

Recently I heard from a woman in my electorate who changed employers in November last year. Her new employer told her she'd start off as a casual and then transition to permanency. Today, she can't access JobKeeper and says: 'This will have a long and lasting financial impact on our family'. In another family, they told me that their two children, aged 18 and 21, had each been in casual jobs for 11 months. They're ineligible too. A local Turkish restaurant tells me that half their staff were international students who are ineligible for JobKeeper. They're worried they'll have to close and have pleaded to me, '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, the Prime Minister said it wouldn't work in Australia. It was only under pressure from business, unions and the Labor Party that he changed his mind, recalled parliament and enacted the JobKeeper package. It's the most important thing the government has done.

The Reserve Bank expects a 20 per cent fall in hours worked, and for the unemployment rate to be 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, we'd be looking at unemployment rates at Great Depression levels.

I'm a strong supporter of wage subsidies. One of my PhD thesis papers was on wage subsidies, and my research suggests they work in Britain and in Australia as well. But there are too many gaps in JobKeeper. It excludes a million casuals, temporary migrants, many charity workers, and virtually the entire arts sector. The 4,500 airport workers at dnata are left out. Like the Peanuts cartoon where Lucy keeps pulling the football away from Charlie Brown, this 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, Melissa Fisher told 10 daily that under the old system she couldn't afford to eat every day. The recent increase in JobSeeker payments means she could eat fresh vegetables for the first time in years. We need to ensure that disadvantaged Australians are the focus of the national recovery. We can't allow this crisis to create a caste of economic castaways.

We've come a long way since 25 February when the Prime Minister 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.

Yesterday it should have been budget day. The Liberal Party isn't selling those ‘Back in Black’ mugs; we're now staring down a budget bottom line as red as the budget tree. Yesterday, the Treasurer gave us a coughing fit instead of a budget update, so we have to turn to Deloitte Access Economics, who anticipate record-setting deficits of seven per cent of GDP this year and next, and budget deficits until 2024. Having promised in 2013 to run budget surpluses every year, the coalition has delivered only deficits, doubling government debt before COVID and now on track to triple it since 2013.

Already the Prime Minister is denying he ever said the economy would snap back. But there's a bigger issue: snap back to what? Australia entered the crisis with too many signs of stagnation—real wages going backwards, weak growth, record-high household debt, falling business investment, falling productivity, unemployment stuck above five per cent, inequality too high and social mobility too low.

As the Labor leader said on Monday, we've got an opportunity to emerge from this crisis a better nation, one that's more productive, more egalitarian and more connected. 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 assist charities. 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 Work Choices and the 2014 budget. We need to spring forward to a more productive, egalitarian and connected Australia.

ENDS

Authorised by Paul Erickson, ALP, Canberra.