Dave Sharma (Wentworth, Liberal Party) Share this | Hansard source

It gives me great pleasure to be able to talk about our economic recovery from the COVID pandemic, including how the economy is travelling and how JobKeeper has supported that economic recovery. Just last week, the Australian National Accounts figures came out. They showed that the Australian economy grew 3.1 per cent in the December quarter. That's on top of 3.4 per cent growth in the September quarter. It's the first time in several decades that the economy has grown quicker than three per cent in two consecutive quarters. If you look at the overall figures for 2020, the Australian economy is 1.1 per cent smaller than it was at the start of this pandemic. That is the best performance in the OECD. Look at other OECD countries: Japan's economy contracted by 1.2 per cent; the Korean economy contracted by 1.3 per cent; the US economy contracted by 2.5 per cent; the Canadian economy contracted by 5.2 per cent; and the UK economy contracted by 7.8 per cent. To go through what we've been through—a once-in-a-century pandemic with all the disruptions to international travel, global supply chains and any number of other things—and emerge at the other side with unemployment at 6.4 per cent and the overall economy 1.1 per cent smaller is not a bad effort. I think we should give credit where it's due.

We've seen the economy continue to recover. In the last four months we've seen 350,000 jobs created, 90,000 in the month of January alone. Of the 1.3 million Australians who either lost their jobs or had their hours reduced to zero at the start of the pandemic, 94 per cent are back at work. Just last week we saw that job advertisements are at pre-pandemic levels. The same is true for consumer confidence and business confidence. Just recently we had our AAA credit rating reaffirmed. So the story is very much a positive one. We've still got further to go on this road of economic recovery. We've got more work to do to support some industries that still need assistance, and we've still got some work to do to get some of our more vulnerable populations, particularly our younger Australians, back to work. But we are very much heading in the right direction.

What role has JobKeeper played in all this? Well, phase 1 of JobKeeper, from March to September last year, was very much an emergency phase. During that six-month period, $70 billion went out the door in JobKeeper, making it the single biggest program of federal government expenditure in the history of the Commonwealth. At that time, half of all Australian businesses were being supported by JobKeeper and one-third of all Australian workers were being supported by JobKeeper. But, if you look at where we are today, the story is considerably different. At the end of September, when JobKeeper kicked over into phase 2 and we extended it by six months, we had 2.1 million workers and half a million Australian businesses graduate off JobKeeper. Today, there are 2.7 million Australians and 650,000 businesses that have come off JobKeeper. In my own electorate, Wentworth, it's a similar story to the one being played out nationally. In Wentworth 5,800 businesses and almost 20,000 individuals have graduated from JobKeeper.

Contrary to what those opposite may be saying, JobKeeper was never intended to be a permanent program. It was an economy-wide, emergency measure. We're not in the business of providing permanent wage subsidies to Australian businesses, and nor should we be. This would be a massive distortion in the economy. Instead, what we are doing is moving towards more targeted support, which is exactly what you'd expect. As the Reserve Bank governor, Philip Lowe, said recently:

When the JobKeeper program finishes at the end of March we expect some additional job losses, but over time these are expected to be offset by the jobs created by the ongoing recovery of the economy.

In Treasury's review of the JobKeeper program, which it conducted last year, it found:

JobKeeper has a number of features that create adverse incentives which may become more pronounced over time as the economy recovers … it dampens incentives to work, it hampers labour mobility and the reallocation of workers to more productive roles, and it keeps businesses afloat that would not be viable without ongoing support.

That's the truth. The economy is ready to transition to its next phase of recovery. In that recovery, we need to be supporting the areas that still need targeted assistance. We need to be supporting the broader economy. But it is time for JobKeeper to end. That's why we've got programs in place like the JobMaker Hiring Credit—to encourage businesses to hire new workers. That's why we've got the apprenticeship scheme in place, which has already seen 100,000 apprentices hired over five months. That's why we've got the COVID-19 Consumer Travel Support Program in place—to support travel agents. That's why we've got the domestic aviation travel announcements that we came up with last week—to support that sector of the economy. That's why we're bringing forward tax incentives for workers—to bring forward consumption. That's why we're creating tax incentives for businesses—to engage in investment—and why we're bringing forward infrastructure investment. We've moved beyond the crisis and the response. We're now moving to the next stage of recovery, and the ending of JobKeeper is part of that.

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