After an inexplicable wait that has allowed worries about a “fiscal cliff” to undermine business and consumer confidence, the government has belatedly unveiled its plans for JobKeeper and JobSeeker as the Victorian outbreak continues and the employment market struggles to regain even a fraction of the massive losses of March and April.
The government will, as expected, continue JobKeeper until March — subject to an updated revenue test and tapered payments — in a move that is crucial to keeping what is passing for the economic recovery going.
Fewer businesses will qualify for assistance given that those outside Victoria are emerging from lockdown, but it will still be invaluable in keeping hundreds of thousands of people in jobs and keeping businesses that will be viable in a post-lockdown world going.
And the revenue-based assessment mechanism is far better than sector-specific or region-specific handouts.
The main flaw is that it should have been announced earlier to ward off uncertainty, but in the end the government got there.
The amended scheme will reduce assistance for workers who had a windfall from JobKeeper — the government says one-quarter of recipients gets an average of $550 above their pre-COVID income.
The tapered payments will involve a tiered system of $1200 a fortnight for full-time workers and $750 for part-time workers from October to December, then $1000 for full-time workers and $650 for part-time workers in the March 2021 quarter.
Prime Minister Scott Morrison went to great lengths to justify the windfall this morning as the product of a necessary single payment system while the government developed the capacity to provide a tiered payment system that will commence from October.
Treasurer Josh Frydenberg also argued that many workers who received a windfall lost other jobs.
It’s worth making the point that if a Labor government was responsible for a design flaw that handed such a windfall to 25% of all program recipients, the Coalition would have spent the past four months screaming blue murder and its media allies would have conducted an extensive campaign of demonisation of the recipients.
But it’s a world turned upside down with Morrison in charge.
The tapering of JobKeeper will send many firms to the wall. Some are the much-vaunted “zombie companies” that strike such fear into the hearts of economists (although your zombie company is bad, my Business Council member that devotes large amounts of money to gaming the political system to secure regulatory and financial assistance crucial to its existence is fine).
Others are firms that could be viable once normal economic conditions return but will fall victim to the wait and uncertainty.
All the government can do is taper the process so that hundreds of thousands of firms don’t shut all at once. There are no good policy options on this, only more or less bad ones, and the government is going for the least worst.
On JobSeeker, however, the government has been guided by neo-liberal ideology that a class of undeserving poor — dole bludgers in traditional parlance — need to be forced into work by cutting payments.
Worried that part-timers on the reduced JobKeeper rate will abandon their “zombie” jobs and switch to JobSeeker, the coronavirus JobSeeker supplement — $550 a fortnight for singles on top of the base JobSeeker payment of $565 a fortnight — will be cut back to $250, down $300 a fortnight, until the end of December.
That will send a large number of people back into poverty, although the number will be significantly smaller than 500,000, based on the Australia Institute’s recent work that showed a drop in the supplement to $150 a fortnight would push about half a million people back into poverty.
The rationale is based on anecdotes from employers about the difficulty of securing workers — when on most recent figures, there were 130,000 vacancies in the country for more than 900,000 job seekers, and growing. Rarely has the cliché that the best form of welfare is a job rung hollower.
The $300 a fortnight fall in JobSeeker, driven by some business anecdotes and a punitive mindset, will force many families into poverty at a time when there’s barely work for one in seven job seekers.
It will also cut household demand by billions of dollars, making life even more difficult for small businesses that rely on consumer spending.
Jobseeker returning to being “not enough to live on” shows Australia has a roadmap to be back in line with community expectations. I’m surprised how much left wing activists go on about how it’s not with to live on when that is the point. Those anecdotal accounts of job snobs is taken as proof the system is failing, regardless of whether there would be enough work for everyone who wanted it.
‘ . . . anecdotes from employers about the difficulty of securing workers’
These usually turn out to be BS. In 1976, as a uni drop-out, I was turned down for a semi-skilled job for which I had good experience. A few days later, the large company that turned me down was in the paper complaining about having ‘difficulty securing workers’. Because they wanted stable, married workers. They were being fussy.
In subsequent years, after similar media claims from companies about ‘difficulty of securing workers’, it is not uncommon for reports to come out from people who unsuccessfully applied for those positions, but were rejected.
Note that the bastards never say they ‘didn’t get any applications’.
Truth is, it’s the employers who are the job snobs, not the unemployed – but never let the facts get in the way of a good story.
The Paxton kids who were royally screwed by A Currant Bun last century have probably some grandchildren by now who could be vilified to keep up the taloid TV tradition of kiss-up, kick-down.
Not sure it’s so much a left wing activist thing KelS as much as a not being a heartless bastard thing.
We’re a rich country, we shouldn’t be encouraging people not to work, but nor should we be sending them out to live on the streets if they can’t find work. I shudder every time I see a homeless person, my view is that nobody in Australia should be homeless, and no child should be going without a meal, ever.
That doesn’t make me a left wing activist, it just means I don’t like to see my fellow humans suffer when political will could solve the problem.
And I’m not so sure you’re ‘community expectations’ aren’t just more drivel you’ve been fed by News Corp.
I totally agree that it’s a “not a heartless bastard” thing. My point about the activists was that what they are saying *is* also what enough people expect of a welfare system – that it’s not enough to live on. Going on about how it’s grossly inadequate isn’t going to be a successful strategy for that reason.
Personally I’m surprised that anyone would gleefully impose poverty on others – it’s state-sanctioned violence and the root of many social ills. Yet that’s the debate lines on welfare for as long as I’ve been alive, and I’m sure it will continue because it casts poverty as self-inflicted and thus a moral failing, without ever needing to address the supply side issue that there’s simply not enough jobs for everyone. So we keep a portion of the population in poverty.
Time to reconsider the Universal Basic Income?
It seems to make more and more sense. It would be good to see the maths of how it works, I presume some taxes would have to go up, eg company tax, super would have to be looked at. In all this crisis, I haven’t seen any commentary saying the wealthy, like me, are going to have to pay a bit more.
I’m a big fan of UBI, partly on the basis of releasing people from the need to work. As a social experiment, the naysayers think we would all just sit on our bums and smoke weed. The likelihood is that the vast majority would continue to work, would want to work, and workplaces might have to stop being malevolent MBA fed streams of bullshit and attract people to their workplace by the quality of the experience and the sense of achievement.
Yes Mark, the maths would be interesting but much of it could be covered by capturing the free riders in the economy, a Tobin tax for pointless international currency speculation, actually taxing major mining companies, hitting up Facebook and google based on their revenue in this country.
Then look at superannuation anomalies, tax write offs for business which seem to cover what PAYE earners call living expenses, write offs for legal expenses of big companies going after small ones, tax loopholes for the wealthy, family trusts, negative gearing, franking credit rebates. There is much low hanging fruit in this putrid garden.
His Royal Lieness will go to great lengths to justify any of his “beliefs”.
The sad fact is that we are only now beginning to see the extent of the economic agony to come. And continuing to deploy discredited neoliberal ideology will not fix any of that. I just hope enough voters will be able to afford to get to polling stations at the next election to get rid of this visionless cancer.
And it must surely be time for labor to start outlining a vision for a new Australia that guarantees a future for the young. Have they got the spine for that after the last disappointment?
I’m wondering* if the poll numbers plummet down (as surely they must) if an about face will occur. ScoMo is such a populist, I think it is likely we will see revised / increased payment amounts based on a suitable excuse to ensure re-election.
*hoping
And if they’re successful in being re-elected, watch them really pull the rug from under workers (but not big business/political donors) then on the basis of having to tighten belts to pay down the debt.
Jobseeker. Will be way too low. Poor bastards
I know someone currently on JobKeeper but will likely not be after September, but won’t qualify for the means tested jobSeeker so will have to live off their savings/sell assets to make ends meet – until they’re either fortunate enough to get a job (in their 50s, good luck) or are poor enough to go onto JobSeeker.