Topics: Economic recovery; Victoria lockdown; JobKeeper; JobSeeker;
15/02/2021
05:38AM
Jim Wilson: Two point one three million Australians who relied on JobKeeper at the height of the pandemic have now come off the payment. It’s a great sign our economy is recovering and moving in the right direction. But there are still one and a half million Aussies relying on JobKeeper to put food on the table and keep a roof over their head. So how will the government make sure they’re not left behind when the payment ends on the line is Finance Minister Simon Birmingham. Minister, welcome back to Drive.
Simon Birmingham: G’day, Jim. Great to be with you again.
Jim Wilson: Thank you. Thank you for your time. Let’s start with the good news. It looks like our economy is recovering?
Simon Birmingham: It is. This is just another data point, another set of statistics that prove that things are heading in the right direction. We know that around 90 per cent of those who had their jobs lost or hours reduced to zero at the height of the pandemic are now back in work. We’ve seen such strong growth in terms of employment numbers over the last little while. We’ve actually now got record levels of workforce participation happening again across the economy. And now the JobKeeper data showing that this huge intervention we undertook into the Australian economy the most expensive and largest intervention ever at a cost of 90 billion dollars to basically sustain private sector wages and jobs by government has now started to taper off, as we always thought it would. We made sure in undertaking the intervention that it was always going to be temporary. We’ve gone through these different stages of stepping it down and we’ve gone from having three point six million Australians at its peak being supported that now we’ve seen two million Australians having graduated off of JobKeeper and more than half a million businesses having graduated off of JobKeeper and able to stand back on their own two feet again.
Jim Wilson: But it’s lagging behind in Victoria, still more than 600,000 on JobKeeper more than any other state. These lockdowns don’t help.
Simon Birmingham: Obviously, individual circumstances that occur or a concern to businesses and to the employees in those businesses. You would anticipate, given the lag effect in all of this data, that you would see a slower rate of recovery in Victoria. This is data essentially of the transition point from December into the new quarter of JobKeeper. And of course, it’s data that captures or indeed eligibility is informed by the period that overlaps with Victoria’s lockdown from last year and the sort of slower pace of recovery happening there. But we would expect, even with the current lockdown in Victoria, assuming entrusting it is short lived to see a pretty strong recovery that sees them catch up with the rest of the nation.
Jim Wilson: Obviously, your ministerial colleagues, Josh Frydenberg and Greg Hunt, who live in Melbourne, are terribly frustrated with Premier Daniel Andrews. What’s your opinion of the way the Victorian Premier has managed this current situation?
Simon Birmingham: Clearly, we see problems and concerns insofar as the pace of contact tracing and so on, that a right to be addressed in Victoria. Now, our thoughts first and foremost with the Victorian people that these sorts of times with Victorian businesses and how we continue to make sure that they can get back to normal as quickly as possible. And hopefully in this case, we will see it be a quick process. Nobody wants to see any state or territory go through the type of long, drawn out process that Victoria faced last year. So this can all be done and dusted in quick, short order. Then it should have minimal impact on the overall recovery.
Jim Wilson: Do you think JobKeeper Minister provides a convenient excuse for premiers to use heavy hand lockdown’s? I mean, they know that the federal government will be there to prop up their economies.
Simon Birmingham: The scale of support that we’ve provided and continue to provide not just JobKeeper, but the elevated payments in a range of areas to other job seekers, but also to businesses and indeed support right through to households, but is ongoing, such as the tax cuts that we’ve put in place, the HomeBuilder programme that’s proving so popular with so many people, the elevation of infrastructure projects. Look, it’s all crucial and we know that it’s necessary. Of course, it has provided a degree of comfort to businesses and households and to the states and territories that the Commonwealth government is standing by them. The Morrison government is delivering that sort of support. And the scale of support of the share of the overall economy has been far greater from the federal government than it has from states or territories. As we move into these latter stages where we see that the country can successfully manage clusters and do so in short order and where disruptions may be in much more specific geographical areas or sectors, that’s an opportunity for the states to really step forward and respond in far more targeted ways at a localised level than perhaps the Commonwealth government can do. Our support will continue through a lot of the other things that are ongoing. But there’s a window there for the states to step up and do more local things that respond to very particular local circumstances.
Jim Wilson: I mean, there are major industries still impacted and relying on JobKeeper. I mean, here in New South Wales alone, just shy of half a million workers still rely on the payment. When will continuing support or some sort of assistance beyond the end of March? When do you expect that to be announced?
Simon Birmingham: So we’re looking very closely at all of the data that informs us here. So New South Wales has gone, as we said, from one point two million employees receiving those payments through the first phase. Now, we’ve seen a fall of about 60 per cent down to around 490,000 employees. So that, again, is trending very much in the right direction. And we would expect to see many more of those businesses and employees have recovered sufficiently to stand again on their own two feet as businesses in supporting their employees. But again, we’re looking closely at the individual sectors and the type of data we’ve released publicly today helps to inform the decisions that we will make over the course of the next month about anything that might be necessary for that next stage when JobKeeper itself comes to an end and where we see targeted interventions as being the appropriate next step, be that at a federal level or particularly the responsible role the states can play there.
Jim Wilson: Can we expect any announcements by the end of February?
Jim, we’re conscious that people want to know, but we also just need to analyse this data in the circumstances and make sure that we are targeting dollars as best we can. Every extra dollar that we’ve been spending on a programme like JobKeeper is a borrowed dollar. The nation is running the largest deficit this year in our peacetime history. As a share of the economy, it’s dwarfed only by the deficits we ran during World War One and World War Two. And so we’ve responded with enormous scale of support. It’s been justified. If you look around the world, most other comparable economies are still shrinking in the December quarter of last year, Australia was back to growing. We’ve saved businesses, we’ve saved jobs. But I think people do appreciate that it can’t go on forever. And we also know when we’re looking at the different data that’s there, that is a couple of hundred billion dollars of additional savings sitting across the economy at present. And so that in addition to our ongoing support through tax cuts and infrastructure spending and measures like home builder provide a buffer that is in the bank accounts of households and businesses.
Jim Wilson: So before I let you go, I want to ask you about reports today regarding a revamp of the dole, one payment for all unemployed Australians instead of all these different supplements and subsidies. Will this lead to a permanent rise in the JobSeeker rate?
Simon Birmingham: Well, again, we’ve made clear we’ll have a look at what we do with the JobSeeker supplement and any decisions around that before that supplement comes to an end in in March. And we’ve effectively doubled the safety net during the absolute height of the pandemic. And just as with JobKeeper, though, we’ve always said it would be temporary. We’ve stepped it down over a series of decision points to make sure that we didn’t have an abrupt shock to the economy, but a graduated reduction in that. And if we think that there is justification and need to do further beyond the end of March, we will make those decisions in a timely way.
Jim Wilson: Minister, as always, thanks for your time.
Simon Birmingham: Thank you. My pleasure.
Jim Wilson: That’s Finance Minister Simon Birmingham.