Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020

26 August 2020

Thanks very much, Deputy Speaker, for the opportunity to make a contribution on this really important legislation, the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020, which extends the JobKeeper program beyond the original finish date, which was the end of September. I will be moving a second reading amendment in my name, which I will get to a bit later on.

Thanks very much, Deputy Speaker, for the opportunity to make a contribution on this really important legislation, the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020, which extends the JobKeeper program beyond the original finish date, which was the end of September. I will be moving a second reading amendment in my name, which I will get to a bit later on.

We have supported for some time the extension of JobKeeper beyond that hard September snapback. The last weekend in September was the original date that the Prime Minister and the Treasurer had nominated for the withdrawal of the JobKeeper payments. At the time, they said that they expected the economy would come roaring back, that everything would be fine all of a sudden and there would be no need for these JobKeeper payments. A number of times they gave interviews where they made it very clear that their working assumption was that this recession, this jobs crisis, would be a short, sharp episode and by the next month there would not be a need for this kind of support in the economy. Clearly, that's turned out not to be right, and, having recognised that, those opposite have had a change of heart, which we welcome. The Prime Minister's and Treasurer's original plan to pull this support—this JobKeeper support, these wage subsidies—out of the economy at the end of September would have been absolutely devastating. It would've been absolutely catastrophic. That would have had horrible consequences for workers, businesses and communities right around Australia and especially now, of course, in Victoria.

The thing that we need to understand as we debate this legislation is that, in terms of the JobKeeper payments themselves—I'll leave the industrial relations component for my colleague the member for Watson—all this legislation does is that it pushes the expiry date back a few months, from the end of December to the end of March. As I said, that's a welcome development, something that we have been calling for. But what it means is that it's still entirely the responsibility of the Treasurer now to set the rate of the JobKeeper payments but also to determine who is eligible and who is not eligible for the payments. It was the case before, and it continues to be the case, that there is one person who is solely responsible for the rates and for who gets the JobKeeper payments.

Having recognised that, we think that this bill doesn't address really the two major concerns that we have about the JobKeeper program. The first one is that this is now the third crack that those opposite have had at JobKeeper, and yet we still have a million casuals and hundreds of thousands of other workers deliberately excluded from the scheme—workers in universities, aviation workers and a whole heap of casual workers in the economy, concentrated in industries like tourism, who have been left out and left behind again with what the government is intending to do with the JobKeeper program. That means that the unemployment queues are longer than they need to be. It means that, because of a deliberate decision of those opposite about who they want to exclude from JobKeeper—despite the obvious need, despite the obvious benefits not just to particular workers but to the economy more broadly—the unemployment queues, which are already unacceptably long, are even longer. I hope that the Treasurer reflects on that when he sets the rules and regulations and rates for JobKeeper going forward. We're told that will happen in the coming weeks, and we would urge him to take into account that the fact that all of those workers are excluded means that the unemployment queues are longer than they need to be.

The second major concern is around the rates themselves. Again, this is entirely a responsibility of the Treasurer. A little over a month ago, the Treasurer announced the new arrangements for JobKeeper, including the winding-back of some of the support. He made that announcement before the economy—especially the Victorian economy but the economy more broadly as well, and the labour market especially—deteriorated further. Our concern is that there is a rush from those opposite to pull support out of the economy, without a proper plan for jobs to replace that support. That is probably our primary concern right now—that those opposite have a plan to pull this support out of the economy but they don't have a plan for jobs to replace that support. In case those opposite think that this is somehow a partisan thing or a political thing, I'd encourage them to reflect on the views that have been put forward by the Reserve Bank about pulling support out too quickly. I'd encourage them to reflect on the pretty remarkable consensus amongst the independent private sector economists in this country, who say that one of the real risks in pulling too much support out too soon is that that could cruel the recovery before it even gathers pace, create a new fiscal cliff and have consequences that nobody in this House would welcome.

Those are our two concerns: pulling support out without a plan to replace it and the fact that too many people are still excluded from the scheme. What is the reason we have those concerns? There was an overarching objective for the wage subsidies, which is the reason why we supported them in the first place. It's the reason why we welcomed the government's change of heart after they had initially said that they were a bad idea. We thought that it was good that they had a change of heart and came to our view that wage subsidies would be an important way to get through this recession. We welcomed that when it happened.

The reason those wage subsidies are needed is that we want to make sure that the extraordinary support which is provided to the economy during the depths of this recession is tailored to the economic conditions. That should be the navigating light here. That should be the guiding principle, whatever we are doing. Every dollar of this money is borrowed, and we need to get maximum bang for buck. We need to measure the effectiveness of our spending by what it means for jobs in particular and make sure that that spending is guided by and tailored to the economic conditions. And those conditions have gotten worse, not better, since the changes to JobKeeper were announced. We need to recognise that, acknowledge it and be upfront about it. Things have gotten worse, particularly in the labour market but also in the economy more broadly, and not just in Victoria but around Australia, and we need to respond to that. I think that means reconsidering the wind-back of JobKeeper payments while the labour market is as weak as it is now.

Our saying that the economy is weaker than when the JobKeeper payments were announced is one thing. We need to recognise that the government itself has said—the Treasurer has said a number of times now—that the half-budget update which was provided on 23 July is already out of date. Back then, I think just over 200,000 workers were expected to lose their jobs between then and Christmas. Now both the government and the Reserve Bank expect that to be more like 400,000 workers, in addition to the million already unemployed. The last unemployment numbers we got said that, for the first time in our history, we had more than one million unemployed Australians. That doesn't count all the Australians who have given up looking; they're not captured in that official data. But the government, the Reserve Bank and others have said that, even in the last four weeks, conditions have deteriorated substantially, and I think it's the responsibility of those of us in this place and especially the Treasurer, who sets the rates and eligibility for JobKeeper, to respond to that deterioration.

The reason why we need to get this right is that getting this wrong would have such enormous consequences for our people. The stakes really couldn't be higher, in lots of ways. There's the health part of the crisis; and, in economic terms, the stakes are remarkably high. This is the deepest downturn in at least 90 years, possibly longer. Next week we'll get the numbers for the June quarter. GDP growth will have probably the biggest contraction we've seen.

So, for all of those reasons, we need to understand that the stakes are really high here. We need to get this bang on, because, if we don't, it means more and more Australians will join the unemployment queues and it means more and more businesses will hit the wall, and nobody here wants to see that happen. So we have to get it absolutely right. I don't think any objective observer of the support that's been rolled out into the economy would say that it's been bang on so far. It's one thing to extend JobKeeper, which is a good thing, but that is not a comprehensive plan for jobs.

We should be trying to leverage our superannuation savings pool, rather than cutting the super guarantee and raiding people's retirement incomes. We should be getting the support flowing to bushfire victims, who have been hurting since January, not leaving most of the bushfire recovery fund unspent. We need genuine support for small business, not just a rebadging of the grossly undersubscribed SME loan scheme. We need a plan for social housing to create jobs and support vulnerable people, not rely on a HomeBuilder program which is inaccessible to too many people. We need energy policy certainty, we need cleaner and cheaper energy and we need jobs that are associated with that, not the energy policy chaos that's already costing thousands of jobs. We need a plan to make child care more accessible and affordable, not just kick childcare workers off JobKeeper while our second-largest city is in lockdown. We need a plan to support our university sector, which is critical to young people and our future, not make it more inaccessible and let uni jobs go. We need a plan to grow jobs and give a voice to the regions, not make cuts to regional services like the ABC and other cuts as well. We need to value older people, not freeze their pensions or hide from an aged-care crisis that's taken the lives of too many older Australians.

These are the kinds of missteps and mistakes which will make a really difficult situation and a really deep downturn, a really deep recession, even more difficult and even deeper, with devastating consequences for our people. We see in question time over and over again that those opposite are desperate to pretend that the only mistakes made here have been made by state governments. It's time for them to stand up and acknowledge that all the mistakes I just ran through have costs for the economy, and that means they also have costs for people and their jobs.

We need to get the response to this recession right, we need to get the recovery right and we need to reimagine what the place will look like after the recession has come and gone. Instead of those opposite taking a sensible three-part approach to this, we've got from them are these three parts. First, they were too slow and too narrow in their response. Second, they're in a rush to pull support out of the economy without a jobs plan to replace it. We desperately need a jobs plan; we can't wait until the October budget to hear what those opposite want to do about jobs. They're good at saying how bad things are now, but they're yet to tell people what they're actually going to do about it. The third defining feature of how the government is responding to this recession is really damaging. They're now using it as an excuse to pursue some of their old ideological obsessions, whether it be industrial relations, superannuation or pensions, right across the board. We know this because the Treasurer said he would take his inspiration in this recovery from Margaret Thatcher, and that will send a shiver down the spine of every Australian worker. We need to make sure that we are responding intelligently and decisively based on developments in the economy, not based on the same tired old ideological obsessions of those opposite.

When we talk about the consequences of getting this wrong—we've talked about the stakes being really high and about the depth of this recession—the thing we're desperately trying to avoid is what the economists call labour market scarring. That is really just a fancy way of saying that what we need to avoid is this big spike in unemployment becoming a permanent state of affairs. We need to make sure that this unemployment doesn't concentrate and cascade through the generations, particularly for communities like the one that I represent—and I see the member for Forde on the other side of the chamber. We can't have long-term unemployment in our communities. It's damaging for social cohesion. It's dislocating. It creates all kinds of intergenerational carnage. We need to avoid that at all costs. If you look at all the recessions here and overseas through time, one of the things we fear most is the long-term unemployment that follows, the long tail of disadvantage, which has such damaging consequence for our community. We need to avoid that at all costs. That means getting important programs like JobKeeper right. The ball is now in the Treasurer's court to set the rates and eligibility. We need him to get that right. If he continues to get that wrong, the unemployment queues will be longer than they need to be, and that will make it harder for people to put food on the table, to put school shoes on their kids and to pay their rent or mortgage. I move the amendment in my name:

That all words after “That” be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1)notes that this legislation gives the Treasurer extraordinary powers to set the rates and eligibility arrangements for the Jobkeeper Payment;

(2)notes that millions of workers and struggling businesses continue to be excluded from the Jobkeeper Payment; and

(3)calls on the Treasurer to use his power under this legislation to ensure the Jobkeeper rate is tailored to conditions in the economy, including rising unemployment".