Monday, June 29, 2020

Today by Paddy Manning


Cash burn
The cost of stimulus remains top of mind for the PM

Image of Prime Minister Scott Morrison in Sydney on June 29, 2020

Prime Minister Scott Morrison in Sydney on June 29, 2020. Image © Mark Kolbe / Getty Images

Speculation about the future of JobKeeper and JobSeeker beyond the September cut-off date is running hot ahead of next month’s economic statement, with the prime minister only today receiving Treasury’s review of the wage subsidy program at the June halfway mark. Scott Morrison said that JobKeeper is unsustainable, with a “cash burn” running at almost $11 billion per month, but at a press conference this afternoon the PM acknowledged that industries impacted by ongoing social-distancing restrictions would need targeted support beyond September, listing aviation, tourism (“particularly in rural and regional areas which have been most affected by the international travel bans”), entertainment, and the conferences and events sector as examples. On the issue of JobSeeker, Social Services Minister Anne Ruston yesterday described as “factually incorrect” a Herald Sun report that the unemployment benefit would be increased permanently by $150 a fortnight, from $565 to $715 (which is still much lower than the current temporary level of $1100 a fortnight but would at least take the payment from below $40 per day to more than $50). “I know of no such proposal and you can read into that what you’d like,” said Ruston. This morning Morrison was again complaining about the cost, telling 2GB’s Ray Hadley that the high JobSeeker payment was a disincentive to work.

“What we have to be worried about now is that we can’t allow the JobSeeker payment to become an impediment to people going out and doing work, getting extra shifts,” said Morrison, adding that the government is “getting a lot of anecdotal feedback from small businesses, even large businesses, where some of them are finding it hard to get people to come and take the shifts because they’re on these higher levels of payment”. Shadow social services minister Linda Burney said the government had to end its “cruel games” with people on JobSeeker before the Eden-Monaro byelection on Saturday, saying in a statement that yesterday “senior levels of the Morrison Government briefed media on a permanent increase to the JobSeeker payment. Yet, in a matter of hours, the Morrison Government issued a stunning about-face, pouring cold water on its reported plans for a permanent increase.” 

In a new report on the COVID-19 recovery phase, the Grattan Institute recommends that the federal government should wind down its fiscal stimulus programs more gradually to avoid a severe economic crunch in September, and spend an additional $30 billion in 2020–21. To aid a return to full employment (below 5 per cent) by 2021–22 would cost an additional $40–60 billion, Grattan estimated, including permanent increases to JobSeeker, rent assistance and childcare, and new spending on social housing, services and infrastructure. Focusing on the decisions the government will need to make over the next six months – in particular, those made ahead of the October budget – the report does not go along with calls from the likes of the Reserve Bank, the OECD and The Economist magazine to “build back green” and tackle climate change by investing in renewables. Grattan’s outgoing chief executive John Daley tells The Monthly Today, “The reason why we haven’t is that if you’re trying to build back green you’re not going to get there fast enough. If we’re halfway right about this major economic crunch coming in late September/early October, unless there’s significant policy shift, it doesn’t matter how fast you move, you’re not going to be building lots of nice green things by September … They’re nothing like shovel-ready and, remember, what happened the last time we did this is pink batts, and didn’t that turn out well?” 

From the opposite direction, think tank Beyond Zero Emissions has released its Million Jobs Plan, with project advisers including former PM Malcolm Turnbull and economist Ross Garnaut. The plan advocates for hundreds of billions of dollars of public and private investment in decarbonisation, from renewables and clean transport to energy-efficient social housing and manufacturing opportunities, such as green steel and hydrogen. The report was launched by Atlassian co-founder Mike Cannon-Brookes, the former UN climate chief Christiana Figueres and First State Super chief executive Deanne Stewart. “No one thought 2020 would turn out the way it has,” Eytan Lenko, interim chief of Beyond Zero Emissions, told Guardian Australia. “We now have a unique opportunity to seize this moment, to retool, reskill, and rebuild our battered economy to set us up for future generations.”   

Today’s AFR [$], meanwhile, carries an op-ed by former Treasury secretary Ken Henry to mark 20 years since the introduction of the GST, arguing that major taxation change requires a “burning platform” to motivate fundamental reform. The paper also carries a survey of market economists calling for a more targeted approach to fiscal stimulus and an end to the expensive JobKeeper program. As Grattan’s report observes, the government is now getting urgent advice from all directions on how to shape the pandemic recovery, and Daley says for the most part the advice is to “do whatever people wanted to do 12 months ago … Our point is, the world has changed, the priorities of government have changed, and therefore what governments do over the next 6–12 months needs to be very responsive to those changes.”

The spirit of being “all in it together” continues to break down. 


“Anne Ruston and I are not kidding. We expect people to sign up. And if you don’t want to sign up, then I won’t be signing any cheques.”

2GB

Prime Minister Scott Morrison says that he and the social services minister are serious about their threat to withdraw funding from more than 25 institutions that have failed to sign up to the voluntary National Redress Scheme for victims of child sexual abuse.

“Australia is intensifying espionage activities against China – setting up an intelligence station in its embassy in Beijing to spy and recruit assets, instigating defection among Chinese nationals and spying on students and organisations in Australia.”

In the latest sign of a deteriorating relationship, Chinese tabloid The Global Times reports, without evidence, that a Chinese law enforcement agency uncovered an Australian spy ring in 2018 and arrested agents who were trained in Canberra before returning to mainland China to gather intelligence.

Donald Trump didn’t drop from the sky
As Donald Trump comes to the end of his first term, it is clear he has benefitted hugely from America’s divisions – in fact, he is the perfect expression of them. Whatever happens next, those divisions will remain.

Of the OECD’s 10 principles for government transparency and integrity in lobbying, Australia’s system meets only one, and partly meets five, according to a departmental analysis.

“The Consumer Data Right provides consumers with greater access to their personal information, giving them the power to instruct businesses to provide safe and secure access of their data to trusted third parties … Applying the Consumer Data Right to the energy sector will allow consumers and businesses to more easily compare and switch between electricity plans and providers, encouraging more competition, lower prices and more innovative products and services.”

Treasurer Josh Frydenberg and Energy Minister Angus Taylor announce the extension of the Consumer Data Right from banking to energy.

The list
 

“I was so disturbed by the new model results that I found it impossible to get back to my work. How can we not understand that life as we know it is unravelling before our eyes? That we have unleashed intergenerational warming that will be with us for millennia? If this really is the end of days, how can a climate scientist like me make best use of the time I have left?”

“The most obvious motive from the hardliners is simple vindictiveness. They regard universities – indeed, most forms of education – as something vaguely subversive, yet another conspiracy hatched by the progressives to enhance their dominance. But the stated rationale is, as always, jobs. Encouraging more STEM graduates will produce, conservatives say, a productivity surge to turn around the horrible employment figures emerging as the country struggles back to what Scott Morrison and his cohort desperately hope will be business as usual.”

“The tender asks consultants to examine ‘the role of publicly-funded (non-commercial) media organisations in the production and dissemination of news and media content in the comparable jurisdictions, and the impacts and interactions of publicly-funded entities with commercial operators’. This is the argument News Corp makes against the ABC: that it is cutting into the audiences of commercial enterprises such as Rupert Murdoch’s newspapers, websites and pay television business.”

Paddy Manning

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.

 

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