Time to bring back JobKeeper

The federal government is going to have to step up with some urgent financial support for workers who have lost their jobs or who have lost income.

It’s pretty clear that Victoria’s lockdown is not going to end on Thursday.

It should also be pretty clear that the Federal Government is going to have to step up with some – urgent – financial support for workers who have lost their jobs or who have lost income.

This is before we even get to murky and - right now – really rather pointless arguments over who’s responsible, or the degree of shared responsibility between Victoria, SA and the Feds.

The virus literally flew out of quarantine in SA. It swamped Victoria’s non-lockdown response. There are now cases in a still significantly unvaccinated aged care sector – with both the sector and the degree of vaccination Canberra’s responsibility.

I suggest it’s unproductive to spend time squabbling: the reality to be dealt with is an – hopefully brief - extended lockdown and the damage and cost imposed on Victorian businesses and workers and indirectly on the rest of Australia as well.

The central points that have to be kept front of mind is that the virus is always Australia’s problem, even when individual states go their own way, successfully, or not; and the same goes for the economic and financial costs.

Quite clearly Canberra can’t give the individual states a blank cheque to do what they want and with Canberra picking up the tab.

That would reward bad behaviour by and within a single state, with the whole country footing the bill.

The federal government is going to have to step up with some urgent financial support for workers who have lost their jobs or who have lost income.

The issue is where you draw the line. Up to a point it’s the state’s responsibility – plus normal welfare payments; beyond that point Canberra has to at least contribute.

No-one seems to appreciate that the question was actually posed last year when Victoria went into its solitary three-month lockdown in the September quarter.

The reason nobody noticed was because JobKeeper was locked in from the start at the end of March for six-months, at its high and for casuals too-high levels.

So Victoria didn’t have to ask for the help, it was already being given.

It was also being given to the other states as well, which arguably didn’t need it, certainly not at quite the same level.

This over-generosity with JobKeeper had two broad consequences.

It meant the economic springback from the June quarter plunge was much quicker and stronger than most – and especially both Treasury and the Reserve Bank – expected.

Indeed, but for Victoria shooting itself in the foot – and ‘winging’ – the rest of Australia indirectly, the continuation of full JobKeeper across the entire country would have sparked a mini-boom in the September quarter.

The second consequence was the clear rorting. Some billions of dollars were clearly paid to businesses and workers who didn’t need it.

The rorting was not at the big end of town. As Ownership Matters revealed, only $2.5bn of the $90bn plus paid in JobKeeper went to the biggest 300 companies – and one-third of that went to Qantas.

The feds would be understandably wary of an open-ended repeat for Victoria.

If the lockdown went only the one week, I would argue it’s the state’s responsibility to foot the bill for businesses – starting with the weekend’s $250m package. Workers would get normal federal welfare such as JobSeeker.

But it’s going longer, so the two treasurers, Victoria’s Tim Pallas and Josh Frydenberg should – must – agree the split and the process.

The Feds must make it much easier than ‘normal’ for those workers impacted to get the payments, and get them immediately.

JobSeeker now pays a minimum of $620 a fortnight for a single person. The final ‘casual’ JobKeeper rate was $650. The final full-time rate was $1000.

Right now I I would broadly suggest continuation of those rates for either two or four weeks. It would directly benefit Victorians it would indirectly benefit the whole of Australia.