Questions over JobKeeper
SCOTT Morrison and Josh Frydenberg are spending billions of dollars of your money giving casual and parttime workers a pay increase via JobKeeper. Why?
Do the banks really deserve all this praise for joining Team Australia?
And how exactly do we emerge from “hibernation” unless the whole world gets vaccinated against coronavirus?
JobKeeper is, in many respects, good. Importantly, it should reduce the unemployment peak. Just how much is guesswork.
Westpac chief economist Bill Evans has cut his forecast from 17 per cent to 9 per cent. AMP’s top boffin Shane Oliver says 10 per cent now looks more likely than 15 per cent. That’s what $130 billion buys you.
What I don’t get is why everyone has to get the same amount — $1500 a fortnight. So casual workers earning less than $750 a week should get a pay rise because of our egalitarianism?
I think there are two explanations that make more sense.
The first is the government had painted itself into a corner by repeatedly saying it wouldn’t follow Britain’s lead and pay a percentage subsidy.
Consequently, if it changed tack and decided on a subsidy, the amount would have to be flat.
Second, the government had created a problem by earlier in the month doubling the JobSeeker unemployment payment to $1100 a fortnight. That, too, is more than many casuals and part-timers earn.
Which meant the JobKeeper rate had to be set well above that level, otherwise JobSeeker would have become a “go-to”, as one source put it.
Now let’s do some rough numbers. The government says JobKeeper will go to as many as six million employees. About a third of Australia’s workforce isn’t full-time. Their median weekly earnings are about $500.
If $500 is the middle point, half of that third of workers is at or beneath that amount. This suggests about one million of the six million people who’ll get JobKeeper are in line for a pay bump of at least $250 a week, or $500 a fortnight. The total bill for providing that increase is $6.5 billion.
Before last month, that was a lot of money in Australia. It is more than three times the funding the PM in January said would be provided to the Bushfire Recovery Agency.
Some might think I’m being heartless with my questioning of some of the JobKeeper spending. Not so.
It’s just that I reckon it’s enough to replace 100 per cent of the wage of casuals and part-timers.
If it were up to me, I’d cover those who hadn’t been with their employer for a year as well. They miss out, as things stand.
Nor am I arguing that ScoMo should have done a percentage subsidy. What I’m saying is that it’s bunkum to suggest that everyone has fallen on the “same hard time”.
If a student working at a cafe loses their two shifts a week, and earnings of $400, how is that the “same hard time” as a full-time employee who is the main breadwinner for their family being laid off, creating a $1500-a-week income hole?
Yet they both receive $750 a week from the taxpayer. The other phrase being used by the government that I can’t get my head around is “Team Australia”.
The big banks have joined Team Australia. Is that so? How many of the Four Pillars passed on the Reserve Bank of Australia’s emergency quarter-point cut to standard variable home loans two weeks ago? One. ANZ lowered by 0.15 per cent. The others trousered it entirely. What they did reduce was repayments — to the minimum — without asking customers if that’s what they wanted.
They said it would improve customers’ cashflow. Customers now have to tell their bank to put repayments back to where they were.
Customers who don’t will end up paying more interest over the term of their mortgage, which is great for the bank.
And a final thought. If we can’t trust what other countries are saying about their infection and death rates, how will the world economy return to normal?
Unless nations report the true picture, it will be difficult for Australian authorities to know when our borders can be reopened without there being a risk that it will expose us to arrivals carrying COVID-19.
John Rolfe is News Corp’s Federal Political Editor.
SOME MIGHT THINK I’M BEING HEARTLESS WITH MY QUESTIONING OF SOME OF THE JOBKEEPER SPENDING. NOT SO.