Tuesday, July 21, 2020

Today by Paddy Manning

JobKeeper 2.0
Too many workers missed out before, and now support is shrinking

Prime Minister Scott Morrison and Treasurer Josh Frydenberg.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg. Via Sky News

Prime Minister Scott Morrison and Treasurer Josh Frydenberg continue to thread the needle between providing necessary income support for recession-struck Australians and returning to austerity to repair a record blowout in the federal budget. In the face of near-universal support for an extension of wage subsidies, the PM announced a $16.6 billion package dubbed “JobKeeper 2.0”, which will extend support until the end of March, but with a new headline rate of $1200 per fortnight (dropping to $1000 from January), and a rate of $750 for anyone working less than 20 hours a week ($650 from January). More than two million people are expected to go off JobKeeper in that six-month period, which seems exceedingly optimistic. Anyone receiving JobSeeker is left with even less certainty after September, with the temporary coronavirus supplement cut from $550 to $250 per fortnight and only extended for three months – at a low cost to the budget of $3.8 billion – while mutual obligation requirements will return in August. That means hundreds of thousands of unemployed Australians will be forced back below the poverty line at Christmas, although the PM said he is “leaning heavily into the notion that we would anticipate … that there obviously would need to be some continuation of the COVID supplement post-December”.

Treasury’s June review of JobKeeper, released yesterday, found that the scheme had wide take-up of more than 920,000 organisations and was well targeted to those in trouble, with the average turnover decline among recipients at 37 per cent. Businesses have been kept afloat, with no evidence of widespread closures, and the scheme has supported the incomes of some 3.5 million individuals. But Treasury found there were a number of adverse incentives that could become more pronounced over time – hence the well-flagged introduction of the lower-tier rate for those roughly 875,000 people whose income went up under JobKeeper, compared with their pre-COVID pay. Labor leader Anthony Albanese told RN Breakfast this morning that the government had wasted billions of dollars under JobKeeper, saying, “It shouldn’t have been beyond the wit of government, given that they do run the ATO, to not pay people more than they were being paid before.” Asked about this criticism, the PM said the only alternative was that those workers would not have received a wage subsidy at all: “The only option to us … at that time is they would not have received JobKeeper and they would have gone into the JobSeeker queues, and that would have crashed the JobSeeker system.” 

Greens leader Adam Bandt said it was disappointing that the government had listened to Labor’s call to cut JobKeeper support for low-income earners. “The ACTU, the Victorian Trades Hall Council and the United Workers Union have all rejected cuts to JobKeeper, and the Greens do too,” said Bandt. “The extended scheme is still $44 billion under budget and there is no excuse for this targeted attack. We should be expanding the payment to all workers who need it, not cutting it.”

The government justifies the cuts to the coronavirus supplement by lifting the “income-free area” – the amount JobSeeker recipients can earn without having their payment reduced – to $300 a fortnight. Shadow minister for social services Linda Burney welcomed the extension of the coronavirus supplement as a “step in the right direction”, but called for a permanent increase to the base rate of JobSeeker, which is still stuck at under $40 a day – although Labor refuses to say how much it would like the benefit to be increased by. The PM flatly refused to countenance a permanent increase to JobSeeker today. The Australia Institute economist Alison Pennington tweeted that the drop in the coronavirus supplement and increase to the income-free area was “a blatant admission that unemployment benefits will be used by govt to subsidise & expand low-wage precarious wrk. Disastrous on economic, health & social grounds. We must build back better!”

The big picture is that everyone currently excluded from JobKeeper or JobSeeker will remain excluded, and millions more will be added to the pile of people either living on reduced incomes or left in the cold completely. The support – running at what the PM cited as roughly $11 billion per month for the first six months – will crash to a six-month average of just over $3 billion from October. On JobKeeper alone, Treasury’s forecast is that the number of recipients will drop from 3.5 million to 1.4 million in the December quarter, and then to about 1 million in the March quarter.

Beginning such a new level of austerity in two months’ time seems hard to justify as the second COVID-19 wave worsens, with Victoria recording 374 cases and three deaths overnight, and NSW facing a critical juncture. Today’s announcements pre-empt the treasurer’s economic statement on Thursday, ostensibly so the government could extract some good news in the form of an extra $20.4 billion in income support, from what will be a “sea of red” later this week, in terms of the state of the budget (ANZ estimates the deficit will hit $250 billion in 2020–21) and the national economy. Frydenberg said the coronavirus had “hit the Australian economy harder than any other event in the last 100 years”. That includes the Great Depression, whose effects dragged on until World War Two. That’s debatable, but if the treasurer is right, this is no time to be drastically withdrawing support. 

The PM feigned indignation at a question from Sky News political editor Andrew Clennell today, about whether the extension of JobKeeper for a full year gave a clue as to the timing of the next election, possibly late next year. “Andrew, politics is nowhere near my mind,” Morrison said. “I mean, I don’t think Australians could care less when the next election was and, frankly, right now it’s got nothing factoring into my thinking not at all.” It sounds like he’s protesting a little too much. 

“We believe this proposal will bring severe negative national consequences for future university training. It is likely to have the unintentional effect of amplifying inequities in higher education, and will work against the very economic goals it is trying to achieve.”

An open letter to federal education minister Dan Tehan, signed by 73 professors, slams the government’s recent proposed changes to higher education funding.

“Our (now not so) new government appointed me Australia’s Human Rights Commissioner. It’s an interesting role, especially because I now get to prosecute libertarian values within government. Needless to say the appointment attracted a lot of controversy.”

Former human rights commissioner Tim Wilson, now the member for Goldstein, in an email dated October 2014 inviting a mystery international speaker to appear at an Institute of Public Affairs function. Wilson denies any impropriety.

The moment Australia almost beat coronavirus
In the middle of last month, Australia had its last chance to contain the coronavirus pandemic. One strain of the virus was all but defeated in the community. But then a second strain broke out.


The number of Australian magazine titles that will be shut down, as owner Bauer Media struggles with the ongoing impact of the COVID-19 pandemic.

“A dedicated agency will be established by the Australian government for the management of Australia’s radioactive waste that brings together responsibility and expertise in this important and specialised field.”

Resources Minister Keith Pitt establishes the Australian Radioactive Waste Agency, which will develop and operate the medical and research waste facility at the Napandee site near Kimba, South Australia. In the long-term, the agency will work to establish a separate, permanent location for the disposal of intermediate-level radioactive waste.

The list

“Is Robbie Arnott the Tasmanian Wordsworth? For some artists, landscape is both inspiration and filter, and the Tasmanian wilderness is to Arnott what the Lakes District was to Wordsworth. The Rain Heron (Text) has an intriguing human cast: a woman who lives in a mountain cave, a man and a boy foraging on the edge of a village, a small band of soldiers led by an impassive woman who moves with the grace of a dancer. But the landscape dominates: hills, trees, mosses, gullies, places reminiscent of the Jurassic period, perhaps, some time before the reach of humans.”

“A couple of reporters from Guardian Australia ventured into a flood-ruined street in Townsville, where locals were still clearing the debris, and asked a man named Mark the question that was on many people’s minds that summer: Is climate change making floods more extreme? ‘If anyone mentions that, I’ll punch ’em,’ Mark replied. Who could blame him? For a nation of coast-dwellers, climate change is much more than an inconvenient truth; it is upending.”

“We are told to remain impartial, to be unbiased; essentially, to be white. When we are watching our own people die at the hands of the system though, that is impossible. Time and time again, I see the stories of my community told the wrong way by white journalists, who butcher them for their white audiences under the guise of ‘fair and balanced journalism’, only adding more trauma to my already traumatised community. This is why Aboriginal perspectives are important.”

Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Inside the Greens and the unauthorised biography of Malcolm Turnbull, Born To Rule?


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