Katy Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

by leave—We sit today, the second Tuesday in May, a day which, in a pre-COVID world, would be budget day—but it seems nothing is as it was anymore. Labor recognises that, first and foremost, COVID-19 is a health crisis, a worldwide pandemic, which has caused the death of more than 280,000 people, including 97 here in Australia. This health crisis has resulted in the imposition of significant social restrictions on our community, which have in turn had massive economic implications. For hundreds of thousands of Australian workers that has meant losing their jobs; for others, it has meant less work being available. For others, home has morphed into office and schoolroom. For our essential workers, work has never been busier or more dangerous. Despite this enormous upheaval, Australians have done what was asked of them, by cooperating with the advice that social distancing would save lives and that staying home was the best way to keep everyone safe, particularly those who may be more vulnerable to the effects of the COVID-19 virus. As a community, we stood together, albeit socially isolated, and flattened the infection curve. However, in the space of just a few months, and despite the restrictions put in place, thousands of Australians were infected, hundreds of people became critically ill and, tragically, 97 people have died. But, as a country, we have fortunately avoided the heartbreaking scenes of other countries, such as the United Kingdom, the USA and parts of Europe.

From the beginning of the crisis, Labor has taken a constructive approach to the health and economic responses to COVID-19. This includes the positions we've taken in this chamber and the other place, during the two urgent sittings of parliament, to facilitate and expedite the extra support needed by the Australian community and the economy during this time. We've not played politics. When we've disagreed with elements of the government's response we have raised our concerns in a constructive manner. When we've thought that the response could have been improved we've made suggestions. Where we've thought improvements could be made, we've suggested changes, some of which the government ultimately took up, including our call for a wage subsidy, better income testing for families, support for students and telehealth measures, just to name a few.

When the Prime Minister and his ministers spoke of an 'economic snapback', we were surprised at the approach, considering the severity of the economic shock playing out in front of our eyes. But when the final vote came on the COVID-19 related legislation we voted in the national interest for the millions of families and millions of people, workers, vulnerable Australians and businesses, large and small, who needed us to make that call.

But our job as the opposition also requires us to hold this government to account. The statement just given by the finance minister outlines just a fraction of the information that we would have expected to have been delivered today, had it been budget day, and most of this information isn't new. Nonetheless, the numbers paint a confronting picture and really paint the importance of getting the recovery right: in the June quarter, household consumption down 16 per cent; business investment concentrated in the non-mining sector down 18 per cent; dwelling investment down 18 per cent; new motor vehicle sales down 40 per cent this year—the largest fall ever; house sales down 40 per cent; and air travel down 97 per cent.

Whilst today's statement is welcome, it doesn't replace the need for a full set of numbers to be released as soon as possible. It's not enough to drop a few select numbers, as this government has been doing. Unemployment is to rise to 10 per cent, we are told, but it could have been 15 if it weren't for JobKeeper, we are told. But there's no Treasury modelling to back this in. Last weekend, the government dropped to the paper the costs of the economy not reopening—again, apparently Treasury figures but no detail released. It's essential that Treasury's detailed forecasts are made available for security. If the IMF, the RBA and private economists can undertake and publish detailed forecasts, with appropriate caveats in place, there is no reason why the Treasury isn't in a position to do so also. Now, more than ever, Australians deserve to be given up-to-date information to understand what is happening in the economy in real time, what is happening in the labour market and whether the economic response packages are doing what they were intended to do. After all, it's the Australian taxpayers who are funding these massive economic response packages, and it is the Australian taxpayers who are going to have to pay off the substantial debt bill that follows.

Whilst Labor accepts that the impact on the economy from COVID-19 is severe, it is also important to acknowledge that the last set of economic figures we got from the government in mid-December last year through the MYEFO already pointed to significant weaknesses across the economy. Seven years in, three treasurers down and the government's complacent approach to managing the economy was there for all to see. Economic growth was below trend, underemployment was rising, business investment had fallen to its lowest level since the 1990s, wages were stagnant, productivity was in decline and government debt had more than doubled on this government's watch. Australian households were already struggling to make ends meet, with declining household incomes making it more difficult to get by week to week. Monetary policy had been doing the heavy lifting for some time as the government, wearing its ideological blinkers, had refused to respond to the weaknesses with any serious fiscal or policy response. Despite the government's spin, the economy entered the COVID-19 crisis in a weaker shape than needed to be the case. We saw this as the COVID-19 virus started to wreak havoc across the world from December last year.

It wasn't until mid-February, some six weeks after the alarm bells went off around a global pandemic with serious health and economic consequences, that the government finally accepted the need for economic stimulus. Treasury told the Senate Select Committee on COVID-19 that work on the first package started at the beginning of March. When the first package was announced, Labor was positive, despite our concern that it was unlikely that these measures would be big enough or implemented quickly enough to prevent job losses, business failures or a more serious downturn. We said at the time that the government must be prepared to take additional steps if it became clear that the response was insufficient. In just 10 days, that insufficiency test Labor had warned about was met, with the government announcing the second package, more than tripling the value of the first. Just eight days after that, following massive job losses in that middle week in March, the government finally tapped the mat on a wage subsidy and announced the JobKeeper payment.

Three economic packages announced in the space of three weeks, on 12, 22 and 30 March, does beg the question as to whether Treasury would have designed the package differently with the knowledge of where they ended up by the end of March. Treasury officials have described the cash flow boost as a wage subsidy scheme. Why then design two different wage subsidy schemes, particularly one which doesn't require employers to keep staff on, and announce them a week apart?

Did the government act fast enough and go big enough and with enough urgency from the beginning to stabilise the economy and keep as many people in jobs as possible?

From the outset of this crisis, we have raised concerns about urgency and about getting money out the door fast. The government hasn't really been able to explain why it's taken almost two months, since the restrictions were put in place, for some of these job-saving payments to get out the door and into businesses. Seven weeks since the shutdown started, why is it that private savings of Australians—some $10 billion of people's superannuation savings—are the single-biggest injection of funds into the economy? And yet even that program, implemented with no-strings attached and without a verification process, had to be suspended last Friday, with a police investigation underway into allegations of fraud for at least 150 account holders that the government was warned about.

There are also other issues about the design, timing and implementation of the economic response. Why did the government announce a program that incentivised sacking people on 22 March, only to announce a program that targeted keeping people in jobs on 30 March, just eight days later? If JobKeeper had begun earlier, covered more workers and been announced prior to the boost to the jobseeker payment, would that have saved more jobs? Would it have prevented the confronting scenes of Australians lining up outside Centrelink, thousands of Australians who overnight had their lives turned upside down? Why did the government value some workers over others when they designed JobKeeper? Why are some workers on JobKeeper getting a windfall gain, sometimes up to three times what they would normally earn, and yet others, by fluke of service time, miss out entirely on having their job saved and their income protected?

We know that 1.1 million casuals have missed out on JobKeeper because the government refuses to provide support to casuals employed for less than 12 months, forcing them onto the jobseeker payment instead. There are the 5½ thousand workers who worked for dnata that have been excluded from JobKeeper—Australian workers working in Australia, with families to feed and jobs they want to get back to, excluded. Hundreds of workers at hotel chains are under a similar exclusion and are being notified they are now not eligible, after originally being accepted by the ATO for the JobKeeper payment. What about the pub staff in Cairns who can't work but, because their workplace is linked to a bottle shop which has continued to operate, don't qualify for JobKeeper either?

Last week the ABS data showed that, in five weeks to 18 April, total jobs decreased by 7½ per cent, with one-third of accommodation and food services jobs and one-quarter of all arts and recreation services jobs being lost. Yet it's these industries, hardest hit by COVID-19 restrictions, that are the ones with large short-term casual workforces, who are missing out on the support from JobKeeper. Hospitality, arts, entertainment, tourism, construction—these are all industries which rely on short-term casuals to keep their sectors ticking over. Last week the government was claiming the undersubscribed JobKeeper program as some sort of success, but we know from the letters to our offices that eligibility criteria, communication issues and rule changes are making the program confusing and at times hard to access. The government tells us that Treasury has forecast an unemployment rate of 10 per cent, even with JobKeeper in place. That's 10 per cent unemployment—a doubling of the unemployment rate from pre-COVID times! This apparent acceptance by the government of 700,000 additional unemployed people as the price of restrictions is deeply concerning. Did Treasury advise the government on what would be required to bring that rate down and protect more jobs?

Looking forward, there are big decisions to be made—choices that will come before this government. After seven years without an economic plan, it's probably time to get one in place. We need a plan for jobs. We're going to need more than a hope to get the hundreds of thousands of extra people off the unemployment lines. A massive efforts also needs to be made on the issue of underemployment, particularly for the new generation of workers, the young people who've just entered the labour market, or were about to, and who will bear a disproportionate share of the impact of the economic slowdown for years to come.

The government talks of hibernation, snapback and getting out from under the doona. Rather than glib marketing slogans, Labor looks to a future where we don't aspire to snap back to an economy that clearly only worked for some of us. We don't support a snap back to insecure work. We don't support a snap back to poverty and living on $40 a day, and we don't want to snap back to families who are just scraping by, week to week. As the Labor leader, Mr Albanese, said yesterday, we are not just an economy; we are a society. We need an economy that works for people, not the other way around, and we need to recover stronger together. We don't believe that a snap back to higher unemployment, insecure work and poverty for those who are unemployed is what we should settle for.

There will clearly be significant and severe impacts on the Commonwealth budget from responding to COVID-19. As I've said today, Labor has supported the fiscal response to date, even though we would have designed and implemented some of the measures differently, had we been in government. Perhaps now more than ever Australians can see that the budget is more than just a set of numbers which gets trotted out a few times a year, where a surplus is considered good and a deficit bad. This is the simplistic lens that the government likes to have the budget viewed through. But, as demonstrated by this government in its response to COVID-19—and as Labor did when responding to the GFC, despite attacks from the then opposition—the budget is an important stabiliser for when a crisis hits the economy.

Labor believes that a responsible fiscal strategy which ensures a strong and stable budget position is essential for any government, but a budget can and should also be used to quickly inject investment into the economy in times of economic shock or when private investment is withdrawn. It's to help support people, support jobs and support business, as we have seen so clearly from witnessing the queues outside Centrelink in that third week of March and from reading the letters and emails receives into our offices about lives lost, jobs lost and businesses wound up over the past two months. The budget doesn't just exist for its own, intangible purpose; it exists for all of us, for the society we create and for the society we want to be.

The government has had to borrow extra money to help pay for the economic response and to keep the wheels of government turning. The Treasurer has said previously that this debt burden would be shouldered by generations to come. With the government having more than doubled the debt over the past seven years, that debt burden existed well before the COVID-19 virus hit the budget. We will wait for the delivery of the economic statement next month to see exactly how the government will approach the plan to deal with this debt and with the large deficits that will be a feature of the budget for some time.

The government will have to make choices about how they approach the recovery task. We already see the ideologues on the back bench pushing the PM's snapback agenda, already briefing out about how JobKeeper needs to be wound back even before some of the businesses have even got their first instalment. Talk about getting ahead of the curve! No doubt the October budget will give us a glimpse of these choices, including whether the government will snap back to its natural predisposition to 'classic conservative' with cuts to essential services or whether we will see the harsh measures included in the infamous 2014 budget and attempted many times since.

Labor wants the government to put aside their internals and make recovery decisions in the national interest. That means everyone's interests, not just the interests of a select few. Labor urges the government to think carefully about the choices ahead about when and how they withdraw support from the economy. Consult widely across the country, in the regions and the cities, across industries and sectors. Look at the needs of different demographics—young people, women, people on income support—and approach these decisions with compassion and with an eye on the long term rather than an electoral term.

Over the past two months, there has been a noticeable appreciation of the value of public services and public institutions. Obviously, our universal public health system, with Medicare at its core, has been at the centre of that appreciation, but it's broader than that. Across the country, public servants have been on the frontline right from the beginning—from officials being sent into Wuhan, the Chinese epicentre, back in January to assist Australian citizens' return to Australia to those delivering the health response, those delivering the support measures in Services Australia and the ATO, those protecting the borders, the first responders, the scientists and the researchers working on a cure at the CSIRO. I'm sure the irony of the government's injection of $230 million to allow CSIRO to continue to undertake important research and upgrade CSIRO's facility in Geelong isn't lost on those CSIRO workers who've been campaigning against this government's cuts to exactly the same organisation. The redeployment of nearly 6,000 public servants shows the flexibility of the APS and public servants' commitment to our country at its finest. The Australian people's success at flattening the health curve has been supported every step of the way by Australian public servants across every jurisdiction.

The challenges that come from COVID-19 are real, and they will be with us for some time. Getting the economic recovery as good as it can be has to have the urgent focus of this government, while the health experts continue to lead the health response. Earlier this month, the Prime Minister said that success will be measured by reducing unemployment, getting businesses open and getting Australians back to work. Labor would say to the government: 'Yes, you need to do all that. But you must do much more. You need a plan for jobs. You need to deal with underemployment, with insecure work, with the dire poverty of people relying on social security and with the needs of young workers and women workers. You need to get the private sector investing again. You need to get wages moving. You need to get household incomes increasing, and you need to be much more than a marketing operation. You are responsible for making sure that the economy that emerges from this pandemic is one that works for all of us, not just some of us. The immediate future of millions of Australians relies heavily on you as the government of the day getting these decisions right.'