BILLS - Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 - Second Reading

By Matt Keogh MP

26 August 2020

Watch Matt's speech here

I rise to speak on the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020.

There's no doubt that the JobKeeper payment has been an absolute lifesaver for employees and, in actual fact, businesses all over the country. That's why, when this government was resisting such an idea, Labor was out early calling for such a wage subsidy. For many, it's the only reason businesses and Australian families have kept their heads above water. The job crisis is getting worse, though, not better, with 520,000 payroll jobs lost since the virus outbreak began, and the government is predicting a further 400,000 jobs to be lost before Christmas.

With job losses continuing to mount and rising unemployment, this government sees it appropriate to remove substantial JobKeeper support from the economy without any coherent jobs plan to make up for it. Indeed, one might call the government's planned changes to JobSeeker and JobKeeper a no-jobs plan, as under it they predict more, not less, unemployment. Some of the hardest-hit industries are those that have been, and remain, deliberately excluded from JobKeeper—people who work in child care, many in hospitality, essentially all of the arts and cultural sectors, and those working for local government. We on this side of the House have been calling for a solid plan for jobs to be implemented before any sorts of supports are removed, so we need to ensure that financial supports are continued.

In my community, the supports put in place at the higher rate of JobSeeker and the security that JobKeeper has brought with it have largely been very positive. In my community, people have been doing well on the more significant payment—fewer mental health concerns, less crime, general improved health. Local small businesses are going well. In speaking with local law enforcement, there has been a marked decrease in petty crime for the simple reason that people aren't feeling the need to steal as they can afford what they need. Similarly, there is anecdotal evidence from local mental health charities that they are seeing fewer people struggling with depression and anxiety. While being supported by these payments, people aren't having the money worries they usually do. Who would have thought that basic poverty alleviation could be as simple as giving people in need more money?

So we do support the extension of these supports. However, as is the cliche, the devil is in the detail, and devilish detail it must be, because the government hasn't actually shown it to us. The legislation itself that we address today only extends the date that the government can pay JobKeeper through to the end of March 2021. The new lower rates—timing, tiers and eligibility—as before, will only be set out in Treasurer's rules, which we are yet to see, and can be changed at the stroke of the Treasurer's pen.

We are told by the government, however, that the plan is for the JobKeeper payment rate to be lowered from the $1,500 a fortnight in two phases. First, from late September to early January we will see the JobKeeper payment drop to $1,200 a fortnight for eligible employees that worked more than 20 hours a week before the crisis. For those who worked less than an average 20 hours per week the rate will be dropped to $750 a fortnight. But then there is a further drop at the end of the year, a merry Christmas indeed from the Morrison government. From early January through to late March the rates will decrease again to $1,000 a fortnight for those working more than 20 hours a week and to $650 for those who had been working less. JobKeeper will now end just as we go into Easter, hardly the driver of an economic resurrection then.

These reductions have provoked some significant concern in my community, with individuals and in the charity sector. In particular, they are concerned that people won't cope with the dramatic cut in pay that is to come. Before they suffer too much of a rude shock, they would like to see financial counsellors made more readily available to people so that they can prepare appropriately. After all, for some people in our community their income will be reduced by half. That's nothing to take lightly. And that's only if businesses are actually eligible under the tightened JobKeeper restrictions. You see, many businesses weren't doing well before the COVID-19 crisis hit. It's a rough market out there. It's because of this that our community are steeling themselves against what may, sadly, be a mass closure of shops that can't otherwise afford to keep their doors open with these changes, and that's on top of those that had already permanently closed.

When people are earning less money there's also less spending, which, of course, will flow into our small businesses, or rather it won't flow into our small businesses, many of whom I've been chatting with and who are quite willing to tell me that they are enjoying a relative bumper winter after the lifting of restrictions now in Western Australia because there's more cash in our community to support those businesses. To give an example, one of my local coffee shops has said to me that their major concern about the reductions in JobKeeper is not so much about their own employees—though that is part of it—their major concern is the reduction in JobKeeper that will be flowing through everyone else in the community, which will see fewer people able to go to their coffee shop, fewer people able to afford to get that extra side with their coffee, or coffee at all. That is the major thing that they are concerned will be affecting their small business. It is simple demand-side economics, something the Treasurer seems to have an aversion too.

In speaking with local councils, community groups, social support groups as well as the community at large, I can tell you people are concerned about when this tap gets turned off, not just about the money in their bank accounts but also the conditions that workers may be subjected to.

The fair work amendments contained in this legislation introduce a new legacy employers tier, being those previously eligible for JobKeeper but now with a downturn in revenue of between 10 per cent and 29 per cent who will no longer receive JobKeeper but will retain access to the JobKeeper workplace flexibility provisions. This is at least a concession, I guess, to the arguments that Labor has been making with respect to not extending the flexibility arrangements to businesses that have not completely recovered. However, the government must explain why companies which the government has determined no longer need financial support are going to be given these additional rights.

The provisions relating to the commitment to a minimum of only 60 per cent of ordinary working hours would result in many low-paid workers previously receiving JobKeeper experiencing a substantial pay cut. What we are concerned about are the work arrangements permitted by the JobKeeper flexibility provisions, the kind of flexibility that employer groups have wanted for a long time regardless of the pandemic. This really looks like the government is using the pandemic as a cover to introduce broader flexibility measures that would otherwise have been subjected to lengthy legislative scrutiny and negotiation. Ultimately, it will not just undermine workers' rights but will place them at financial risk and at greater vulnerability.

The risk in allowing the JobKeeper flexibility provisions to be extended beyond companies that are eligible to receive JobKeeper is that they'll be used as a Trojan horse for permanent changes that permit employers, with minimal consultation, to alter their employees' conditions of employment. Employer groups will claim that these provisions have worked so well during the pandemic that they should be retained indefinitely. However, to date, employees of businesses with access to these provisions have also all received JobKeeper. That is the bit that's fundamentally changing here. But this should not be an opportunity for the government to soften workplace laws. Businesses have ebbs and flows. We need to make sure that the new eligibility criteria for JobKeeper are appropriate. We need to extend support for longer. We can't just have a cliff where one day financial support is there and the next day it isn't.

Then there are the people who have been missing out since the beginning and still need help. I'm talking about our hospitality workers and other casual workers, who were working for 10 months, not 12, before COVID-19 hit. Only a few weeks ago I spoke to a worker in the tourism sector in Western Australia who had been working one week shy of 12 months before the entire operation she worked for had to be closed down. Situations like that have been writ large across our nation. I'm talking about the performers who are paid show-to-show, not year-to-year. I'm talking about airport staff at council owned airports or at council owned fitness facilities, and, of course, dnata workers. I'm talking about local government workers who have had hours significantly reduced across the board.

Victoria is still in lockdown and many states are on the edge. So the question must be asked: why is action being taken now to reduce payments? Why not extend just a little bit longer until we know for sure that our nation is actually coming out of this crisis? And why not extend support to industries and to the workers who need it but have been missing out?

JobKeeper was initially costed at $130 billion, just through to September. Now, after recalculation of the actual costs, plus this extension of JobKeeper at a lower rate, it will incur a cost of only $101 billion. The government has room in its own estimates from the beginning of this crisis. We know there is money set aside to support more people, so why not support them? I was having a conversation with some young people last night about good debt and bad debt. I think keeping people in work and spending money, keeping the economy ticking over instead of having it fall into a heap, is a pretty good example of the concept of good debt. That being said, there's only one person we need to convince to put their hands back into the proverbial national piggy bank. It's the Treasurer. Surely he can see that these industries and Aussie workers need support. Why withhold it now? We can afford it. Come on, Treasurer, have a heart!

We support these measures today, but it must be known as well that we think the government can and should be doing better. The most important test for the Morrison government's management of this recession and its aftermath is what happens to jobs and the businesses that create them. We can't afford to see more Australians left out and left behind because the Prime Minister and the Treasurer are not prepared to respond to the labour market or come up with a proper plan for jobs. Throughout this crisis, Labor has worked responsibly and constructively with the government. But being constructive doesn't mean being silent when there are very serious failures in the implementation of what the government is doing. These failures are covered across the board and they've seen long unemployment queues.

We saw the failures that resulted from their blunders managing myGov and the Centrelink system. We saw that the supports were too slow to be rolled out and information was not provided quickly enough. We saw that three million vulnerable Australians were forced to raid $33 billion from their super accounts. We've seen JobKeeper completely withdrawn from childcare centres across the country and fees reintroduced, when we need to do the opposite so that we can help people to get back into work, not to mention to support the people working in the childcare centres, not to mention to support the businesses that are running those childhood, early learning and childcare centres themselves.

The Australian economy is in recession for the first time in 29 years. The unemployment rate is at 7.5 per cent and expected to climb to 10 per cent. The government's announced changes to JobKeeper are not a comprehensive plan to create jobs. As I said before, the government's own plans expect an additional 400,000 people to become unemployed. Not only is that not a plan for jobs, that's a plan for no jobs. Labor's priority is to protect jobs, help Australian workers, businesses, families and communities through this difficult time and ensure that vulnerable Australians are supported. That's what responsible governments and parliaments should do. Australians have worked together to combat this virus, but more work must be done by the Morrison government to ensure that our hardest hit Australians are not left out and not left behind in the recovery.