Terry McCrann: JobKeeper is right, JobSeeker too harsh
The government has made changes to both the JobKeeper and JobSeeker payments. It got one just right, but missed the mark on the other, writes Terry McCrann.
Terry McCrann
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The government’s extension of both JobKeeper and JobSeeker is exactly appropriate, proportionate, properly structured and necessary – and, above all, it was absolutely obligatory.
As I wrote on Sunday, you cannot as a government order the economy into recession – indeed, the worst in nearly 100 years – destroying or crippling tens of thousands of businesses, hundreds of thousands of jobs, with very real human costs, and not accept the responsibility on behalf of taxpayers to try to offset at least some of that.
As I also wrote, this was not a criticism in itself of the national lockdown as the mechanism for fighting the virus, simply a statement of fact about the reality of the consequences.
Those consequences were never going to all just completely and conveniently end on a date, plucked out of the air for no other reason than it was exactly six months from the original announcement at the end of March.
A date, soberingly, that was the Sunday after the Saturday on which 100,000 would have gathered at the MCG to watch the Grand Final in that ‘pre-March’ world that now seems so, far, far away.
Indeed, further soberingly, the disaster that is now the (usual) home of the Grand Final sealed the necessity of and the obligation to extend these payments.
The government has done three things with JobKeeper 2.0.
It has extended the payment for a further six months to end-March.
It has cut the main payment from $1500 to $1200 a fortnight for the three months to end-December; and then to $1000 for the next three months.
It has introduced a second – lower payment – tier for people working fewer than 20 hours a week. They will continue to get the $1500 a fortnight until the end of September; after that it will be $750 a fortnight for three months and then $650 for the last three months.
This finally gets right what the government should have done from the get-go. As I’ve been explaining from right at the start, the government belatedly tried to copy the (much superior) NZ scheme and stuffed it up.
NZ had two tiers from the start. Its scheme was also only initially for 12 weeks as against ours for 26 weeks. This allowed NZ to better analyse the support needs in tandem with progress in fighting the virus; so last month its scheme was extend for another, limited period, of 8 weeks.
Our combination of Treasurer Josh Frydenberg and Treasury secretary Stephen Kennedy made another big blunder. They insisted the full $1500 be paid to all employees – even part-time workers.
Apart from having two tiers from the get-go, the NZ scheme was structured around an on-payment to employees of at least 80 per cent of the pre-virus salary/wage.
As Frydenberg admitted on Monday, the blunder meant that around 900,000 of the 3.5 million people getting their wages/salaries subsidised were getting paid on average $550 per fortnight more than they had previously been earning.
That would not have happened if a Coalition government here had merely followed the two-tier payments of the NZ Labour government’s scheme.
Now, those were actually my words – ‘blunder’ and ‘admitted’ – not Frydenberg’s. There never are from a politician.
He ‘admitted’ nothing, there was no ‘blunder’ – just, to quote Treasury’s review, an “income transfer”.
Now yes, it was a blunder: they just had to take dictation from our friends across the Tasman. But I am personally not fussed over the consequence of the blunder.
It directed a few billion dollars to people who both deserved to get a bit of a present and could put it to good use for themselves and also for the broader economy.
JobSeeker 2.0 – the dole – is both good and bad.
The government has done two thing with the extra payment over the Centrelink payment: extend it, but only for three months to end-December and cut it from $550 a fortnight to $250.
The cut was too much, especially in the context of the Victorian disaster. It should also have been extended for the same six months as JobKeeper.
It is absurd to think that the jobless will be able to find jobs anytime well into 2021.
Indeed, there must be a permanent increase in JobSeeker/Centrelink. And that $250 figure seems reasonable.
BANKS SECURE THE UNSECURED
Just when you think that the – mostly, gender-specific – guys in Canberra can do something right, like with the extended JobKeeper, there’s always a reminder that it is likely to be the exception which proves the ‘Bureaucratic Ivory Tower Blunder’ rule.
Further to my comments yesterday about how the SME Loan Guarantee Scheme was so perfectly structured to not work, that only $1.5 billion of the $40 billion on offer actually got out to the battered businesses, it gets worse.
This Scheme 1.0 made it mandatory that a loan had to be unsecured. Except, as one business has drawn to my attention, it had a loophole.
Banks could demand the SME provide a personal/director guarantee – and demand they apparently did, up to the full 100 per cent of the loan.
So a loan which could not be guaranteed against the business’s assets could be guaranteed against the personal assets of directors or owners.
This made absolutely no sense. It also added to the total divorce from reality.
Originally published as Terry McCrann: JobKeeper is right, JobSeeker too harsh