Thursday, 14 May 2020
In the face of a global pandemic, with its devastating financial effects and the health of our very nation being of crucial importance, Labor wants us to repeat our plan for the future of our economy—the plan to get Australians back to work and to fight the inevitable effects of the global pandemic on unemployment rates. My response to them is: haven't you been listening at all?
Today there was hard evidence to demonstrate that the Morrison government's plan has put a solid foundation under our economy, evidenced by the fact that unemployment figures rose just one per cent in April to 6.2 per cent. As our Prime Minister said, though, it's still a tough day for Australians. That result, though, in an environment where predictions were that unemployment would run as high as eight to 10 per cent, demonstrates that the strategy to get Australians back to work and to combat massive unemployment is already working.
We're supporting Australians through this difficult time. We're facing hard times, but we have a solid plan and we will recover. In this unprecedented environment, where we face a global pandemic of devastating proportions, we are getting it right. The unemployment rate is proof of the fact that the JobKeeper program is doing its work. We've worked to retain connections between businesses and employees and to ensure a pathway for millions of workers to return to their jobs. The Prime Minister and the Treasurer have been talking about plans to reignite the economy in deliberate stages. As the states ease restrictions, we will see more people return to work.
It might be timely to note that Labor's record on economic management is far from glowing. Even today, a party that's proved itself incapable of managing a tuckshop, a party that's been bankrupting Queensland, is now suggesting that the solution to unemployment is for their leaders to become international airline moguls. That plan will inevitably result in failure and long-term unemployment for airline workers. We welcome other bids for Virgin Airlines so that it can enjoy a long and profitable future, with secure jobs for its Australian workers.
In stark contrast, the Morrison-led government has, with care and the same steady, responsible economic management, developed solid solutions to a range of tough economic problems. At the centre of our economic strategy, we've been sure to care for all Australians while they've been off work. The jobseeker and JobKeeper programs have provided the pillars of support for our economy. There are six million Australians benefiting from the jobseeker, Youth Allowance and JobKeeper programs. The jobseeker and youth allowance payments provide a safety net for people while they search for a job.
When we talk about the unemployed in Australia, we should note that we have one of the most targeted and effective social welfare systems in the world. Almost every Australian who receives the jobseeker or youth allowance payments also receives supplementary payments on top of the base payment—so there are extra supports in place. The jobseeker payment is a temporary transitional support, with close to two-thirds of recipients expected to exit the payment system within a year.
What else do we do to combat unemployment and support Australians who are out of work? The JobKeeper provisions announced on 30 March, to the value of $130 billion, provide employers with $1,500 per fortnight per eligible employee. That's around 70 per cent of the median wage. For workers in the hospitality, accommodation and retail sectors, it will equate to a full median replacement wage. Payments will be made for 13 fortnights from 30 March, ending on 27 September 2020. With this stimulation for the economy we've ensured that many of those businesses forced to close during the shutdown will be able to reopen. There will be jobs for Australian workers to return to.
We're also seeing success on the health front. By putting in place appropriate social-distancing measures, we've slowed the spread of coronavirus. Our economic strategy is as carefully thought out as the health response to the coronavirus. That response has seen other affected countries look to Australia with envy. Australia is confronting the health and economic challenges from a position of strength.
We don't shy away from the fact that the effects of the coronavirus pandemic across the economy have been severe. Businesses and households are facing uncertainty and, as expected, economic activity has slowed. But our measured plan has put a floor under that economic uncertainty. The government's focus right now is not only on the health and wellbeing of Australians, it's on maintaining our strong economy so people can resume work. As the coronavirus is controlled, the Morrison led government is focusing on businesses reopening. That plan has been designed to ensure that consumers gradually regain their confidence and also return to normal. The government's economic support package has provided timely support to affected workers, businesses and the broader community and has kept Australians in work and businesses in business. In fact, without the JobKeeper program, Treasury forecast that unemployment figures could rise as high as 15 per cent for the June quarter, instead of the current forecast of 10 per cent.
Our economy is resilient and well placed to navigate challenges, but we know that the outbreak, social-distancing measures, economic confidence and travel restrictions are having a significant economic impact. GDP is expected to fall by 10 per cent in the June quarter, the equivalent of $50 billion. Every week that the restrictions remain in place, there is a further $4 billion reduction in economic activity due to the combination of reduced workforce participation, productivity and consumption. Going into this outbreak, however, economic activity in Australia was strengthening at the end of 2019, with the economy growing by a healthy 2.2 per cent. Our strength today lies in the fact that the economy was resilient and well placed to navigate the unprecedented challenges of this new coronavirus environment. Bringing national cabinet together to ensure that we can reopen our economies has also been integral to the response plan.
Our economic response to the coronavirus, totalling $320 billion—which is 16.4 per cent of annual GDP over the forward estimates—will help stop the economy stagnating and provide jobs. That fiscal package, which includes the JobKeeper payment, is front-loaded in order to instil confidence in businesses and households. The accommodative monetary policy with its flexible exchange rate will also help to mitigate the effect of negative economic shocks. It should also be remembered that Australia has a sound and well-capitalised banking sector to withstand financial market turmoil. To reiterate, on 8 May the national cabinet met to finalise the three-step plan to gradually remove baseline restrictions and make Australia COVID-safe. Implementing all three stages may see as many as 850,000 people back at work, increasing GDP by around $9.4 billion a month, and controlling the unemployment rate. Our plan to keep businesses open and Australians in jobs is well underway. Our economic response totals over $320 billion over the next four years to 2023-24. It will protect the economy by maintaining confidence and keeping people in jobs, and our approach will remain that we invest in our economy in ways that provide more jobs. We intend to support Australians during the most difficult of times. I'll quote our Prime Minister, who said today: 'that's what Australians can take hope in today … that we will see those better days'.