Budget 2020 is ‘all about jobs’, Treasurer says, but there’s a catch

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There’s good news and bad news in the Budget for the roughly 1.6 million people relying on the JobSeeker payment to get by.

Let’s start with the good.

There’s no disputing Treasurer Josh Frydenberg’s single-minded focus on jobs in this year’s Budget.

He mentions the word 37 times in a 4,500-word speech.

These short sentences sum up the theme:

“There is no economic recovery without a jobs recovery. There is no budget recovery without a jobs recovery. This Budget is all about jobs.”

Backing up the words are billions of dollars.

An estimated $4 billion for the JobMaker program, which aims to help around 450,000 people aged 35 and under back into work by paying part of their wages.

On top of that is an extra $1.2 billion to create another 100,000 apprenticeships, again through a wage subsidy, in this case a generous 50 per cent.

The Government’s $31.6 billion in tax breaks to support businesses, mostly to encourage investment, are also forecast to create an extra 50,000 jobs, according to Treasury.

Personal income tax cuts, it’s hoped, will boost spending and deliver a further 50,000 jobs.

Extra infrastructure spending in the Budget is tipped to put a further 40,000 people to work.

But the emphasis was on quantity, not quality.

While “jobs” was mentioned 37 times, the Treasurer didn’t mention “career” once in his speech.

And there’s a big difference between being employed, and being meaningfully employed in a job with enough hours, decent pay and some prospect for promotion or advancement.

An underemployment crisis

Australia’s unemployment crisis may have arrived with COVID, but the nation’s underemployment problem has been brewing for many years.

The percentage of workers who didn’t have enough hours started the 1980s below 3 per cent.

When the early ’90s recession hit, it was edging above 4.

By the turn of the century it was around 6.

When the global financial crisis hit, it climbed up to 7.6 per cent

It remained stuck around 7-8 per cent until 2014, when it cracked through 8 per cent and hasn’t been lower since.

The pandemic supercharged the problem, leaving a peak of 13.8 per cent of working Australians without enough hours in April this year — 11.2 per cent with jobs still don’t have enough work.

The only requirement on the quality of employment in JobMaker is that it’s at least 20 hours a week, but that’s a fair bit short if you want and need full-time work.

Money goes to business, not jobless

Businesses are getting big budget benefits to encourage them to hire.

There are precious few extra dollars in the budget going directly to the unemployed.

There’s some extra money for training to help those out of work, but the number of places are dwarfed by the army of people out of jobs.

In fact, even with the coronavirus supplement that temporarily doubled unemployment benefits, the total spending on JobSeeker this financial year is expected to be $34 billion.

That’s scarcely more than the $31.9 billion in cash the Government handed out to small and medium businesses and not-for-profits with no strings attached. So much for mutual obligation.

But the real concern for the unemployed is what will happen to their incomes at the beginning of next year.

Those on JobSeeker are about to receive their freshly reduced payment of $815.70 a fortnight, after the $550 coronavirus supplement was slashed to $250 late last month.

Any of the 1.6 million who haven’t found jobs by December 31 continue to have no certainty about how much they’ll have to live on next year.

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JobSeeker could fall again

The Budget papers predict JobSeeker payments will roughly halve to $17 billion next financial year.

However, the jobless rate is only expected to fall from 7.25 to 6.5 per cent over the same timeframe.

It’s a hint that the JobSeeker rate could be set to be reduced again.

Mr Frydenberg and Mathias Cormann cut their budget lock-up press conference short when pressed about what would happen to the JobSeeker rate in the long-term.

When Leigh Sales asked the Treasurer about it on 7.30 she got a repeat of the Government’s stock message.

“We’ll make a decision about that level of payment closer to the end of the year, when we have a better sense of the labour market dynamics,” he said.

What role “labour market dynamics” have in determining an appropriate living standard for those without work was left unexplained.

If the old $40-a-day Newstart rate was inadequate for 1.6 million unemployed people, surely it’s still not enough to live on for those who remain without work even if the Government’s ambitious hopes for nearly a million extra jobs over the next few years come to pass?

The politically cynical might suggest it depends on how many normally middle-class aspirants in marginal seats remain without work.

The cynic finds support for this view from the almost unprecedented consensus of economists, welfare groups, business leaders and even a former Liberal prime minister who all agree that the old unemployment benefit was not enough to live on.

Peak welfare lobby group ACOSS summed up this sentiment.

“Overall, the Budget does not deliver enough investment to pull us out of the historic slump we’re in without leaving people behind,” said its chief executive Cassandra Goldie.

“The Government will need to do more to ensure that we are all in the recovery together.”

But, there’s naivety in that statement. It assumes the Government wants to ensure we’re all in the recovery together — not something you can take for granted from the Treasurer’s Budget speech.

“Our plan is guided by our values. Our circumstances may have changed, but our values endure,” Mr Frydenberg said.

“Providing a helping hand to those who need it. Personal responsibility. Reward for effort. The power of aspiration.”

So why does the appropriate rate of JobSeeker depend on how many people are unemployed?

It seems that some are worthy of a genuine helping hand, while others will once again be left behind as the economy inevitably recovers.

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By business reporter Michael Janda (Original ABC Article)

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