Tuesday, 12 May 2020
Questions without Notice: Take Note of Answers
That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) to questions without notice asked by Senators Wong and Gallagher today relating to COVID-19.
All of us in this chamber would acknowledge that right now Australia and the world face incredible challenges. Coronavirus tragically has led to the deaths of 280,000 people worldwide, including 97 here in Australia, and now, as we appear to be emerging from the worst of the health crisis in Australia, we face a significant economic and unemployment challenge. We've seen hundreds of thousands of Australians lose their jobs, we've seen small businesses destroyed and we've seen particular impacts on certain industries—most of all the hospitality industry, which has seen one in three jobs disappear in such a short period of time. Treasury and the Reserve Bank are predicting that unemployment will remain high for the rest of this year. Deloitte yesterday released a report which said that unemployment won't reach pre-COVID levels until at least 2024, so we're looking at high unemployment, according to Deloitte, for another four years.
This week, as we have returned to parliament, we've heard two very different approaches outlined for how the country should respond to this crisis and how we should approach economic recovery. Yesterday the federal Labor leader, Mr Albanese, gave a speech which outlined Labor's approach to how we should recover. What he was saying was that we shouldn't just go back to the things were; we need to build an economy that works for people, not the other way round. We need to build a stronger, fairer economy with a focus on reducing unemployment and underemployment.
Sadly, we are seeing a very different approach from the government, and we saw that here again today in question time. The approach that this government is taking was described by the Prime Minister and the Treasurer recently as one of snapback. They seem to live in this mythical economic world where everything can just snap back to the way things were. That's assuming, of course, that you think that everything was perfect in the first place. They seem to think that we can snap back overnight to a world in which we still had low productivity, high unemployment, low economic growth, low business investment, wages that were stagnant and high levels of insecure work. That's the kind of world that this government thinks that we can snap back to.
And nowhere is this approach more on display at the moment than with the government's statements around its intentions in relation to the JobKeeper payment. This of course was the wage subsidy which this government had to be dragged kicking and screaming to implement. They were against the calls of Labor, the union movement and businesses. They finally got there, and finally implemented the JobKeeper payment, but the fact that they were opposed to it from day one continues to be on display, with early calls from members of this government to start winding it back. That's what 'snap back' means under this government; it means winding back and cutting off the very payments that this government has finally put in place to try to keep this economy alive and to try to keep people in work.
We've seen over the last few days reports that the government wants to wind back the JobKeeper payment—and that's before unemployment has even peaked. The reports from the Treasury and the Reserve Bank are that we won't hit the maximum rate of unemployment—around 10 per cent—until around June this year. So before we've even seen unemployment peak we've got members of this government who want to start winding back the JobKeeper payment.
In fact, there are many businesses across Australia who are yet to even receive JobKeeper payments to reimburse them for payments they've made to their workers—and before the businesses have even started to receive the JobKeeper payment we've seen members of this government wanting to start winding it back. Today in question time Minister Cormann, the finance minister, was asked whether the government was considering a windback. He told us that the government isn't considering an early end to the JobKeeper payment, but then he went on to confirm that it is actually under review. And it's that second answer which is the most important. This government is already reviewing the JobKeeper payment before it has even been received by some businesses, before unemployment has even peaked. What that shows is that the clock is ticking for the JobKeeper payment and the snapback that this government wants to see in place has begun; a return to low wages, higher than average unemployment and low economic growth has begun. Jason Falinski, the member for Mackellar, today has been reported as saying he thinks we should turn off the JobKeeper payment as soon as possible. He said, 'As soon as schools go back then it should go.' The snapback has begun.
There are many business groups in my home state of Queensland who are saying cutting the JobKeeper payment would be disastrous for the economy. They know that snapback would be disastrous; it's about time the government did too. (Time expired)
In support of the Minister for Finance's statement to the Senate today, and indeed the Treasurer's statement to the House, I will start by outlining the significant challenges this nation is facing at the moment, the very strong way we have responded to those challenges as a nation—this health crisis and this economic crisis—and then point to the way forward. Only a few weeks ago—it seems a lot longer—as the significance of this pandemic became apparent we faced a very significant health and economic crisis. I think as a nation we can be very, very proud of how we have responded to that crisis.
When it comes to dealing with the health crisis, through the leadership of the Prime Minister, the health minister and the cabinet—and, indeed, informing the national cabinet—we have seen a response that I think is the envy of most of the rest of the world. You would not want to be dealing with this significant challenge in virtually any country other than Australia right now. Notwithstanding that, it has had a major impact on Australia even though our performance has much better than most other comparable countries. It has had a health impact. Of course, we mourn those who have been lost and we are with those who have suffered and our frontline health workers who have been dealing with that.
The economic impact has been huge. We have sought to deal with that economic impact on the basis of principles and values. As we seek to come out of this economic and health crisis, we will maintain that approach—and I will get to the contrast in a moment. But we have to go back to the starting point of what we had. What we have just heard from Senator Watt, and what we have from the Labor Party in their criticism generally, is a big lie. They claim that the Australian economy was not doing well, was not strong, going into this crisis. That is not true. That was not the view of the Reserve Bank. That was not the view of the IMF. We just had Senator Watt saying we had higher unemployment. Well, it was 5.1 per cent going into this crisis and we saw economic growth ticking up. We saw expected economic growth in 2020 and 2021 being higher than virtually every other G7 economy. So this big lie that the Labor Party looks to retail to make a political point during this crisis—that our economy was weak—is wrong. We were strengthening our economy based on our policies. We were strengthening our budget. Isn't it a great thing that we went into this crisis with a budgetary position that was vastly better than virtually every other comparable nation. We had a debt to GDP ratio a quarter of what we see in places like the United States and the UK and about a seventh of what we see in places like Japan. That's no thanks to the Labor Party. We inherited a $48 billion deficit and we brought the budget back into balance. We saw unemployment coming down, with 1.5 million jobs being created. So that track record holds us in good stead.
But these are great and challenging times and, as a government, we are working with state and territory governments to deliver for the Australian people. Our absolute focus is on keeping Australian safe during this health crisis and protecting their livelihoods. As we open up our society again, we want to open up our economy as soon as it is safe to do so.
We hear the alternative approaches from the Labor Party. They want to permanently put government at the centre of our national life. We heard it again from the shadow finance minister today when she was critical of policies like cutting taxes. The shadow finance minister is critical of policies like cutting taxes!
Well, as we come out of this I think Australians can take great comfort from the way we have handled this crisis to date. As we continue to work together, we can bring our economy back to where it needs to be. It's not going to happen by government continuing to be at the centre of things. It's going to be small and medium and large enterprises getting on and creating jobs on behalf of all Australians. Those are the policies we're going to continue to pursue as we recover. (Time expired)
First of all, isn't that an extraordinary description of what's happened in the economy, pre-COVID-19! Here's the party and the government that doubled the debt. But also let's look at today. This is normally budget day, but we have no budget. We've also got a government without a plan for what we do moving out of this COVID-19 period. But don't worry! It's probably a little bit unfair to say they don't have a plan; they have a plan to snap back to no plan. That's their strategy. Let's snap back to no plan. In actual fact, in the case of a number of their backbenchers and others on their side, they have a plan to snap back real quickly to no plan.
In the case of underemployment, let's look at what we would be snapping back to. Pre-COVID-19 Australia had 1.23 million workers wanting more hours than they were getting—8.7 per cent of the workforce. Even before COVID-19 lay-offs, the headline unemployment rate in Australia sat at 5.3 per cent. The number of people who either couldn't get a job or couldn't get the hours they wanted spiked under the Morrison government to 13.8 per cent. Snapback.
They want a snapback. I will give you an example: a survey by the Transport Workers Union of Jetstar workers, where 90 per cent of Jetstar workers wanted more hours. Not only is Jetstar refusing to guarantee workers' hours in future arrangements but the agreement also restricts workers from getting another job in aviation. Snapback.
Let's look at other snapback strategies this government's got. Underemployment: snapback. Wage theft: what's the plan? Billions of dollars taken out of our economy. That's their snapback plan. We see people having their money stolen. We see superannuation theft. We see companies that are doing the right thing, abiding by the law, being unfairly competed with. But they want a snapback.
In actual fact, they want to snap back a bit further. In the case of the gig economy, except for probably Senator Bragg, not many people would have picked this up. There was a decision made by the Fair Work Commission rightly looking at the laws, which are going to be challenged in the High Court, about what rights people have in the new economy, in the gig economy. It actually made a decision that many workers in the gig economy, particularly in Uber, would not have any rights, particularly in the case that was taken forward for the Gupta family, Amita and Santosh, who were doing some work to support the disability pension that they were on. They wanted the right of reinstatement after being victimised, as they felt they had been, by the company. What does the gig economy look like? In the case of these workers, they were averaging $7.85 an hour, half the minimum wage. Snapback. That is what this government wants to see: a snap back not just to pre-COVID-19 but, in the case of the gig economy, to the sorts of practices that were happening with piecework in the 1800s. When they snap back, they snap way back. Of course they want a snapback when it comes to Newstart—$40 a day. How could you possibly see that anybody would have the capacity to turn around and survive on that sort of income? Snapback.
Let's look at the consequences of the last major recession that we had, in 1990-91. Treasury Secretary Steven Kennedy made the comment, whilst he was being questioned at a Senate hearing, that in the 1990-91 recession almost 1.2 million Australians had manufacturing jobs. More than 100,000 jobs were lost from that sector in a two-year period, and, despite a larger economy and workforce, the number of manufacturing workers today is 25 per cent below the pre-1991 peak. Snapback.
We have to have a plan. We have to have a plan about how we actually move this economy forward, how we deal with the new economy and how we deal with the consequences of COVID-19 and the economic consequences that we're facing. We have to make some decisions about how we not snap off our economy but actually turn it around and make it work for us. It's critically important, whether you're suffering from wage theft in the gig economy or in the manufacturing sector— (Time expired)
Before I get to the substance of my contribution, taking note of the questions asked by the opposition today, I too would like to commend the government and all governments around Australia—indeed, the entire Australian people—for how they have responded, combined and acted over the past two months. It's perhaps becoming too easy to forget that two months or so ago, when we left this place and basically suspended at least normal operations of the parliament, we had our cases growing at well above 20 per cent a day. It was very much on an exponential growth path. If we had continued on that path, hundreds of thousands of Australians would have been infected and thousands more would have died, unfortunately. It has been a remarkable turnaround. It has been, at least in part, testament to the strong response of the Australian people and the combined and consistent actions of Australian governments—this one here in Canberra but also governments right around the country.
I take some heart today that, in the only way possible for an opposition, those opposite also paid some credit to the government for its actions over the past couple of months. There was very little—indeed, I didn't really pick up any—criticism in question time of what the government has done over the past two months in response to this global pandemic. The substance of the opposition's points today were all about what we might do, or what they fear we might do, in the future. There was very little, if anything, about what is actually being done.
I do take some heart from the fact that I know an opposition can't come into question time and put up Dorothy Dixers and suggest what a great job the government has done. That would perhaps be an incorrect application of the tools here for us as senators. The opposition is here to hold the government to account; so it can't just come in here and provide bouquets to the government—a government that I think has done a pretty good job, which the Australian people expect. So I understand that. But let's be clear: what the opposition has put forward today have only been criticisms of what some hypothetical, in the future, government might do. The contributions we have just heard have been all about how, when, maybe, or if the JobKeeper program is changed or amended and what might happen if or when there are withdrawals and drawdowns on superannuation.
Obviously, critiques of future actions that have not happened don't carry all that much weigh, but they carry even less weight here because they are caricatures of future decisions that a government might take. In the Labor Party's mind, we over here on this side are all cigar-chomping, big business loving, cashed-up senators. That is their caricature of us. You can see in their nightmarish Labor-centred vision of the future that that's where they think things will be going.
It's clearly a caricature and has clearly been demonstrated to be a caricature by the actions of this government in the last couple of months. We have taken action to support workers—enormous action. We were criticised a few months ago for being enslaved to a rock-solid commitment to a budget surplus. Obviously we weren't enslaved to such a commitment, because when action was required, when we had to respond to help and assist thousands of Australians, we ditched what was, yes, a very important commitment of ours and something that we worked very hard to achieve to put the nation back into surplus. But it had to be ditched for the greater good, and we showed that we have the pragmatism to do that. How we've acted in the last couple of months is exactly how we will act in the months ahead. The government will be pragmatic. It will be sensible. It will respond to the needs and concerns of average Australian citizens. And, of course, we will seek to manage the money that ultimately is other people's. It is Australians and it has to be repaid as carefully as possible.
In terms of the future—which today's question time was focused on—the question that will have to be asked is: which side of politics do the Australian people trust to get people back to work and to restart this economy? We cannot continue to subsidise the wages of millions of Australians day in and day out. We cannot continue to double welfare payments on an unending basis. We will have to get Australians back to work. And the question that the Australian people will ask is: who can best be trusted to unlock business, to get people employed and to get our country back onto the strong track it was on before? (Time expired)
We asked questions today about the government's plans to snap back the JobKeeper program, as calls from their backbench grow to snap back and cut back vital support to the Australian people. This is a program that the union movement and the Labor Party advocated for and pushed the government to adopt—a program that the backbench Liberals, the ideologues in the Liberal Party, can't wait to get rid of. They are desperate to snap back the government's support. They are desperate to let the markets rip again, and they are desperate to do this at a time when Australians need their government to back them up the most.
With even the Reserve Bank now projecting unemployment to reach 10 per cent in just a couple of months, it is a good thing—a very good thing—that Labor and the unions advocated for this wage subsidy program. Right now, today, a third of people have lost their jobs in the hospitality sector alone. There is no-one in hospitality, be they hospitality workers or hospitality employers, who think that that sector is going to snap back any time soon. There is no-one in hospitality, be they workers or be they small businesses, who think that we can snap back the JobKeeper program in September or even earlier, as the ideologues on the Liberals' backbench are now arguing for. There is no-one in the hard-hit arts sector either that thinks that that sector can snap back straightaway and that we can snap back the JobKeeper program in sectors that have been hard hit by this coronavirus crisis. It is going to take time and it is going to take a plan for these sectors to recover.
Having sectors like this continue to struggle is not only bad for the workers and for the businesses in those sectors; it is bad for the whole economy—an economy that was already struggling under the plans or lack thereof of this government. This week, Deloitte Access Economics also warned against a snapback strategy. They highlighted how important it is for our recovery that there is ongoing support for workers, for vulnerable Australians and for the broader economy. They warned against the quick withdrawal of support programs like JobKeeper and also the jobseeker program. If these programs were withdrawn overnight, we know that we would see hundreds of thousands of Australians moving on to Newstart, a payment that is so low that it actively impedes people's ability to find employment.
So today we have to ask: is the government's plan to snap back to the old Newstart rate of $40 a day? Is that really the government's plan for workers in Australia today? Is that the plan for our country today? The government have the opportunity and they need to take a new approach. Their old approach, which they are desperate to snap back to, meant that we actually entered this crisis from a position of economic weakness, not one of strength. So let's not snap back to the lowest wage growth on record. Let's not snap back to an explosion of insecure jobs, of casual jobs of gig jobs. Let's not snap back to our manufacturing jobs continually being offshored. Let's not snap back to sluggish and weak economic growth. Let's not snap back to unlivable social security payments.
The Prime Minister told us, when launching the JobKeeper program, that we're all in this together. Well, right now that couldn't be further from the truth. We are not. People are doing it tough. Millions are already going without the support that they need. They need a government that will stay the course with them. They need hope for a better future. This government doesn't have a long-term plan for our recovery from this crisis. It didn't have a plan for growth and good jobs before this crisis. If its only plan now is to snap back then it doesn't have the plan for the future that all Australians need.
Question agreed to.