Senate debates

Thursday, 14 May 2020


COVID-19: Economy

4:09 pm

Photo of Malarndirri McCarthyMalarndirri McCarthy (NT, Australian Labor Party) Share this | Hansard source

On behalf of Senator Gallagher, I move:

That the Senate—

(a) notes that:

  (i) the Government said that the economy would 'snap back' after the end of the COVID-19 crisis,

  (ii) the Reserve Bank and Deloitte have forecast unemployment to remain at elevated levels for years,

  (iii) members of the Government are calling for the early end of the JobKeeper payment, and

  (iv) Government ministers have confirmed that JobSeeker will revert back to $40 per day in September this year; and

(b) calls on the Government to:

  (i) table Treasury's review into JobKeeper in the Senate as soon as it is finalised,

  (ii) as soon as possible, provide certainty to people on the JobSeeker payment that they won't be "snap-backed" to living on $40 per day; and

  (iii) outline a plan for jobs and for reducing unemployment in the Government's economic update when it is delivered in June.

I stand in support of notice of motion No. 591 brought on by my colleague Senator Gallagher. A mind-boggling budget deficit of $143 billion has been predicted for the 2019-20 financial year. This week Deloitte Access Economic economist Chris Richardson forecast the federal deficit to blow out to $143 billion this financial year, dwarfing the $5 billion surplus the government had forecast in December. Mr Richardson predicted in his report that the economy would be suffering a COVID-19 hangover for many years to come. National income is predicted to fall $35 billion below official projections and have a shortfall of just under $200 billion in 2020-21.

The report also forecasts the unemployment rate will not get back down to five per cent until late 2024. Mr Richardson says that recovery will be slow. He puts the key reasons for this as families and businesses having suffered 'blows to their confidence, their income and their wealth', so they'll be 'more cautious about taking any risks'. As for the Reserve Bank, it has already, in Mr Richardson's words, got 'the pedal to the metal', meaning this is the first recession and recovery where the RBA is 'essentially already out of ammo'. While Australia may well outperform many other global economies, 'that global weakness may undercut the prices we receive for our resource exports'.

It's also worth noting that Mr Richardson says:

Australia's recovery will be strikingly dependent on the extent to which our governments—federal and state—switch their policies away from the virus sprint and towards the recovery marathon.

He identifies our key problem as unemployment, and 'that's the curve we now have to flatten.'

We 'will have to drive unemployment down without any help from the RBA, as the Reserve is already tapped out'. Our fight against the virus must now be a battle against unemployment. Mr Richardson warns against rapid budget repair and a reliance on spending cuts, and he says that, with interest rates so low, the government's extra spending on coronavirus support measures, such as JobKeeper, 'will only cost the average taxpayer around $3 a week'. That's it: $3 a week. Yet this government wants to walk away from JobKeeper and JobSeeker.

Today's April labour force figures released by the Australian Bureau of Statistics shows young Australians are bearing the brunt of the unemployment crisis—13.8 per cent of our young people are now without work, which is more than double the national average of 6.2 per cent. There are now 283,500 unemployed young Australians, many previously employed in casual, insecure and gig work and in hard-hit industries such as hospitality. One-third of accommodation and food services jobs have been lost during this crisis, and those worked by people aged 20 to 29 deceased the most.

Young Australians are carrying an incredibly heavy load through this crisis, and Labor is deeply concerned about the potentially devastating impact on our young population. Overwhelming unemployment, social isolation and missing significant life events are all taking a financial and certainly a mental health toll on our young Australians.

The government must have our young people at the forefront of their thinking and take all necessary steps to support them during and after this crisis. One thing the Treasurer could do right now is better target the JobKeeper program to ensure those young people who were employed casually on a short-term basis are able to access financial support and maintain a connection to their workplace. Labor will continue to work constructively with the government to ensure young Australians are supported.

The Northern Territory has the lowest number able to work from home with only 32 per cent, and that was followed by Tasmania on 35 per cent. Labor is calling on the government to release modelling on the anticipated economic impact of snapping back the coronavirus supplement overnight. Last week the Department of Social Services said that it estimated some 1.7 million Australians will require unemployment support by September, yet the Prime Minister has been insistent that he will snap back the JobSeeker payment to $40 per day for millions of Australians on 24 September. This is the equivalent of ripping almost $1 billion a fortnight from household budgets. This sudden stop will have a significant impact on the Australian economy. It was revealed last week at a hearing of the Senate Select Committee on COVID-19 that the government had not coordinated its jobseeker increase with its wage subsidy rollout, which it introduced following pressure from Labor, business and, in particular, the unions. The Reserve Bank, the Commonwealth Treasury and the International Monetary Fund have all confirmed in recent weeks that an economic snapback is nothing but a myth from the Prime Minister. A snapback of jobseeker risks leaving millions of Australians behind.

The government needs to be clear, it needs to be straight with all Australians, about whether the nation is now edging closer to another economic cliff, in the form of the Prime Minister's promised jobseeker snapback. If the Prime Minister wants to snap back jobseeker, he should be upfront with Australian workers and Australian businesses about its consequences—this is a fairly reasonable ask—and seek advice from the Department of Social Services and the Treasury. The government's jobseeker snapback isn't a plan for the economy; it's a recipe for disaster. The Department of Social Services has admitted it believes another 400,000 Australian will require the jobseeker payment by September, bringing the total number of jobseeker recipients to 1.7 million. With almost two million Australians requiring income support in six months time, it is difficult to comprehend why the Prime Minister is insisting on a snapback to $40 per day.

There have certainly been mixed messages from within the ranks of the government. This week the Minister for Families and Social Services, Anne Ruston, said she wouldn't rule out an increase to the jobseeker payment rate. Yesterday her department said all options were on the table, yet the Prime Minister, the Treasurer and the Minister for Finance have locked in a return to $40 per day for Australians on jobseeker. This is despite the government's own projections that unemployment will still be as high as 1.7 million.

The hundreds of thousands of Australians who have found themselves out of work or had their hours slashed are understandably confused by the mixed messages from this government about jobseeker. They need to know how the government will help them get back into work and they need to know that their jobseeker payment won't be snapped back to $40 a day by the Morrison government. It wasn't enough before the COVID crisis and it certainly won't be enough after the crisis. The old Newstart rate of $40 per day was so low that it presented a barrier to finding work. Australians will need to meet costs such as phone and internet bills to be able to find jobs and participate in interviews. Australians need assurances that this government will not let them fall through the cracks. Australians need to be uplifted and treated with dignity and respect to be able to take their place in our society without feeling that we're looking down on them because they are in need of social services. Australians need that kind of security, going forward.


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