A $60 billion ‘error’ proves the wage subsidy has been weaponised
The good news ushered in by the federal government’s $60 billion JobKeeper blunder is that the Commonwealth’s fiscal position in 2021 and beyond may turn out to be better than predicted. The bad news is we have fresh confirmation for those millions of Australians who were excluded from the JobKeeper program that the Morrison government really does hate you, and it wants you to have to rely on the dole (if you can get it), which will be cut in half again from September. This includes millions of short-term casuals, migrant workers, and anyone from the arts and entertainment industries or from our universities. How else to explain the fact that a JobKeeper program worth $130 billion was deemed economically responsible until last week, but is apparently irresponsible this week, now that the forecast cost has shrunk back to $70 billion? In the electorate of Eden-Monaro yesterday, the prime minister took responsibility for the error but then schooled us all, saying the missing $60 billion was “not free money”. “If the suggestion is that we should be increasing borrowings more than would be needed to deliver the program that we’ve designed and [are] delivering,” said Morrison, “well, the answer is no.”
Treasurer Josh Frydenberg is flagging that, in the wake of the massive $60 billion underspend on JobKeeper, further assistance may be granted to sectors like tourism that have been hit hard by the pandemic – which may be good news for some businesses – but that only rubs salt in the wounds of those other heavily affected industries like arts, entertainment and education. Finance Minister Mathias Cormann suggested that perhaps artists and entertainers were not eligible for JobKeeper because they could not demonstrate that their revenue had fallen by the requisite 30 per cent. Shadow arts minister Tony Burke responded with a statement: “Earth to the minister: the arts and entertainment industry has been shut down. These workers watched their incomes evaporate and job opportunities disappear as gigs were cancelled, shows were scrapped, galleries were closed down and productions were halted in the early days of this crisis. They’re not missing out because they can’t demonstrate a drop in revenue. They’re missing out because the government designed JobKeeper in a way that deliberately excludes them.”
It’s a similar story with the universities, which have not only been deliberately excluded from JobKeeper, but have also watched the program be redesigned three times to ensure they cannot qualify. The National Tertiary Education Union is warning that some 21,000 full-time equivalent jobs are at risk – that’s 30,000 people. Yet today we learn that four private universities – Notre Dame, Bond, Torrens and the University of Divinity – will be allowed to access the JobKeeper subsidy. The chief executive of the Group of Eight Universities, Vicki Thomson, was at a complete loss to explain why private universities might qualify and public universities would be excluded. Shadow education minister Tanya Plibersek said it is “extraordinary … [that] the government has now changed the rules three times to exclude public universities from JobKeeper and changed the rules one time to make sure private universities have access. It’s just not fair. We need to fund all universities on an equal basis.”
So far, the government’s excuses and explanations for the error don’t add up. Around a thousand businesses filling out a form incorrectly doesn’t account for a $60 billion miscalculation, and the JobKeeper payments were meant to go for six months regardless of the duration of lockdown, so it is not clear why Australia’s success in battling the pandemic to date should affect the cost of the program – especially given that whole industries were and remain closed. There will be more questions for the PM and the treasurer, as well as for Treasury and the ATO, including by the Senate select committee on COVID-19.
JobKeeper is up for review by Treasury next month, and reports indicate that the government has listened to criticisms, including from Labor, that an estimated 1.7 million people have been given a pay rise under the scheme and this should be wound back. But the government’s failure to consider extending JobKeeper to those workers who have been excluded – even in the face of a $60 billion underspend – proves that JobKeeper has been turned into a political weapon.
“We believe that a reconfigured AAP, owned by an independent entity, can be sustainable in the longer term. It will require changes to commercial models, just as News and Nine are adapting their own models.”
“Australia’s potential $100bn mining investment pipeline can’t be taken for granted. Lower taxes, faster project approvals, modern skills and flexible workplaces will help the minerals industry play an even bigger role in supporting all Australians by funding vital services and infrastructure.”
Minerals Council of Australia chief executive Tania Constable speaks ahead of tomorrow’s post-COVID recovery speech by the prime minister.
“In my new home, I am loved.”
After five years on Manus Island, Imran Mohammad was resettled in Chicago. He says arriving in America was one of the happiest days of his life. But the coronavirus shutdown has brought back memories of detention and isolation.
“The east-coast bullet train advocated by the federal ALP would be an expensive folly: Australia’s small population and vast distances make it unviable; it would add to greenhouse gas emissions for decades; and governments could help many more commuters by improving public transport in the booming outer suburbs of the capital cities.”
“Taylor’s hand-picked team in the draft room has developed yet another version of what he misleadingly calls an emissions reduction strategy, but is actually a formula – or at least a cloud of thought bubbles – aimed at shutting up the activists while not seriously affecting the economy, by which he means there will be no new taxes. Instead he will rely on technology, which he apparently believes comes at absolutely no cost. Our innovative minister has just invented the free lunch.”
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As part of The Monthly’s 15th birthday celebrations, throughout May we present a dedicated selection of great essays from the archives for your reading pleasure.
“With both pride and resentment, university leaders interviewed for this article note the sector now earns much of its own money. A little more than half – $18 billion – of $34 billion in university revenue now comes from the Commonwealth, a departure from 30 years ago, when a small minority of people went to university and government picked up almost all of the bill. The government quotes the same figures with different emphasis: $18 billion from the taxpayer, and yet universities still want more.”
Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.
The good news ushered in by the federal government’s $60 billion JobKeeper blunder is that the Commonwealth’s fiscal position in 2021 and beyond may turn out to be better than predicted. The bad news is we have fresh confirmation for those millions of Australians who were excluded from the JobKeeper program that the Morrison government really does hate you, and it wants you to have to rely on the dole (if you can get it), which will be cut in half again from September. This includes millions of short-term casuals, migrant workers, and anyone from the arts and entertainment industries or from our universities. How else to explain the fact that a JobKeeper program worth $130 billion was deemed economically responsible until last week, but is apparently irresponsible this week, now that the forecast cost has shrunk back to $70 billion? In the electorate of Eden-Monaro yesterday, the...
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