ABC Hobart Drive 07/09/20

07 September 2020

SUBJECTS: JobKeeper; JobSeeker; Federal economic support and stimulus.


SUBJECTS: JobKeeper; JobSeeker; Federal economic support and stimulus.

LUCY BREADEN, ABC HOBART: Joining me now to break this down is Federal Labor's Treasury spokesman, Jim Chalmers. Good afternoon, Jim Chalmers. What are your concerns with this plan to rein JobKeeper back by $300?

JIM CHALMERS, SHADOW TREASURER: Thanks for having me on your show, Lucy. The main problem we've got here is that the Government is actually withdrawing support from the economy even though unemployment is still rising and we're in the deepest recession that we've been in for almost 100 years. Our view has always been that JobKeeper is a good idea, with some implementation issues. As your caller, Phil, said a moment ago, it has been very helpful in the economy but we need it to work as well as it can. We're concerned that by pulling support out too fast from the economy, it could actually cruel the recovery before it even gathers pace.

BREADEN: Do you think we can afford to keep it at its current level of $1500?

CHALMERS: We've got to make sure that we get bang for buck; it is expensive, that's certainly true. The Government said from the beginning that they wanted to try and maintain people's connection with their employer. I still think that's important, particularly when you consider that unemployment is still rising. The priority has got to be jobs. We need to invest responsibly in that and get maximum bang for buck. JobKeeper has the potential to do a lot of good in the economy. I was talking to Rebecca White, the State Labor Leader in Tasmania, earlier today and she said something like 15,000 business in Tassie are relying on it, that's 40 per cent of businesses, and about 63,000 Tasmanians are on it. If you think about the impact of taking $300 per fortnight off every one of those people who are still eligible then it's not hard to imagine the impact it will have on the economy. Tasmania is not going as badly obviously as Victoria. As you said, the restrictions aren't as onerous. But Tasmania is one of Australia's great tourism destinations and obviously the borders are more-or-less closed so a lot of businesses are still doing it tough. We've said JobKeeper should be tailored to the economic conditions. If the economy is still really weak, and it is, and if unemployment is still rising, and it is, then the Government should reconsider their plans to cut JobKeeper.

BREADEN: Talk me through that impact on the economy when it is rolled back by $300. What would that actually look like?

CHALMERS: At least two main things. First of all, it makes it harder for businesses to survive because they may find it harder to hold onto workers at that rate or they may just decide that this has gone on too long, that they've been clinging on for too long, and they can't continue. That's one impact. The other impact which isn't hard to imagine is when you cut tens of thousands of Tasmanians' income by $300 a fortnight, that means less money is circulating in the Tasmanian economy. Obviously you are 100 per cent reliant at the moment on consumption from Tasmanians in the Tasmanian economy, so pulling that kind of money out will obviously have big consequences too. Now, obviously at some future point JobKeeper will end; at some future point, it will be tapered off. But it doesn't make much sense from our point of view to start doing that now when things are still pretty difficult.

BREADEN: Is there a fear that JobKeeper could be holding up those zombie businesses, as I think they're being referred to?

CHALMERS: I've heard that argument. I'm not sure that that is the case. Certainly it will mean that some businesses can continue which otherwise wouldn't be able to continue through this pretty deep recession, the deepest recession in almost a century. It is keeping some businesses afloat. We won't know until sometime down the track whether those businesses would have been otherwise viable. The most important way to look at it is to think about all of those Tasmanians who might have lost their job were it not for JobKeeper. That's the most important thing. That's why we proposed wage subsidies in the first place. It's a very important outcome that we're looking for there. Secondly, they shouldn’t turn off the tap so fast that it throws a lot of people onto the scrapheap unnecessarily. There ought to be a way for the Government to reconsider these cuts to JobKeeper so that more Tasmanians can stay in work.

BREADEN: Jim Chalmers is my guest, the Federal Labor Treasury spokesman. We're talking about JobKeeper. It will be decreased at the end of September from $1500 to $1200. Is there any concern about JobSeeker and do you have any concerns there with the approach that the Federal Government is taking?

CHALMERS: It will have a similar impact, Lucy. The tapering away of JobSeeker will pull a lot of money out of the Tasmanian economy as well. We said even before COVID-19 that it would be good if the Government settled a permanently higher rate than the $40 a day that people were being asked to live on, on Newstart.  That would be good for the economy because there'd be more disposable income flowing through it, but also good for people supporting themselves while they look for work. The Government has said that they'll continue some kind of JobSeeker payment supplement until Christmas. I think it would be good if they gave people some clarity on what JobSeeker will look like after that. It should be permanently higher than Newstart was.

BREADEN: Before I let you go, we've been talking about the travel voucher system in Tasmania today, Jim. It's basically broken the internet. There was a $7.5 million release of vouchers to stimulate the economy here and to get people traveling to the regions during the week. Would Labor like to see any other economic stimulus happening at a national level to get the economy moving?

CHALMERS: Absolutely. I did watch with interest the travel voucher scheme. I was told it maxed out in about 40 minutes or something like that which is pretty amazing. It shows that there's a lot of interest in the scheme. We need to know a bit more about how it's rolled out but generally we think it's a good development. Governments at all levels should be looking for ways to stimulate their economy. From a national point of view, in Tasmania clearly there's a need for more social housing. We should be building more social housing. It has local and lasting benefits, and it's nice and labour intensive, so that's one way. Infrastructure has got a role to play. Investing in the care economy has obviously got a role play. Clearly, there'll be a need at some point for local jobs programs in the hardest hit areas. We've been calling for the Government, ever since the news came last Wednesday that we are in the worst recession of our lifetimes, to bring forward a comprehensive jobs plan, and economic stimulus needs to be a key part of that.

BREADEN: We'll leave it there, Jim. Thanks for your time.

CHALMERS: Thanks for your time Lucy.