ABC Weekend Breakfast – Jobkeeper bungle, child care

Saturday, 23 May 2020

JOHANNA NICHOLSON, HOST: Let’s bring in the pollie panel now to discuss this further. We’re joined by Liberal MP Julian Leeser, and also by Amanda Rishworth who is the Shadow Minister for Early Childhood Education and Youth. Welcome to you both and thanks for joining us this morning. Julian the number of people on Jobkeeper has now been revised down by three million, this is pretty embarrassing for the Government?

JULIAN LEESER, LIBERAL MEMBER FOR BEROWRA: Not at all. I think to remember that Jobkeeper has been one of the best received public policy programs I can remember. I’ve had constituents describe it to me as a lifeline and as a godsend. What happened here was that when Jobkeeper was first announced, businesses were asked to register and about 900,000 businesses registered. Of that, 1,000 businesses incorrectly filled in the number of employees that you had. You had about 500 of those businesses who had only one employee, say that they had 1,500 employees. And no one has actually received Jobkeeper who was not eligible, because in order to receive a Jobkeeper payment, the business had to provide a tax file number for each eligible employee. So what we’ve had here effectively is Jobkeeper being paid to instead of 6.5 million people, 3.5 million people. And instead of the program costing $130 billion, it’s cost $70 billion. So it was right that Treasury and the ATO, who are responsible for the program, put out a release to demonstrate that their estimates based on the mistaken information entered by employers needed to be changed. That’s all that’s happened here.

FAUZIAH IBRAHIM, HOST: Alright so the wash up is that there is an excess of $60 billion. But still no word on covering casuals who may have fallen through the cracks here?

LEESER: I think it’s important to remember here that this is all borrowed money. So instead of paying back $130 billion of borrowed money, we’re paying back $70 billion of borrowed money. That’s still a very large amount of money that taxpayers of the current generation and future generations will need to pay back. The Jobkeeper program is due to be reviewed at the end of June and any changes to Jobkeeper will be a part of that discussion.

NICHOLSON: Amanda, this isn’t extra money as Julian says but now just money that the Government doesn’t have to borrow. So a rush to spend this, is that necessarily a wise idea?

AMANDA RISHWORTH, SHADOW MINISTER FOR EARLY CHILDHOOD EDUCATION AND DEVELOPMENT:  Well I don’t think that anyone is calling for a rush to spend it. What it is though is a slap in the face for close to one million workers that got told by the Government that the program was over-subscribed and therefore they wouldn’t be allowed to enter it. Even last week we had the Assistant Treasurer saying in regards to those one million casuals and other workers who weren’t able to access it, that maybe if there was only three million workers accessing it that there could be a conversation. So the Government has been really disingenuous.

I know in my own Shadow Portfolio, 33 per cent of early childhood educators who have been on the front line of this pandemic, have continued to work to support children and families, were not eligible. So I think this is a real slap in the face for those workers and they’d be scratching their heads as to why the Government said this was oversubscribed, why they couldn’t possibly be considered to be included because there was already too many workers, when actually we have half the number of workers being supported by this program.

IBRAHIM: And Amanda you’ve been calling for an extension of the childcare subsidies. Obviously you would like to see the excess go into those subsidies?

RISHWORTH: What we’ve got in the child care area is the Government announced free child care, but didn’t fund it properly. So what we have at the moment is families being turned away from early education and care, not able to get in. Not being able to work, not because of COVID-19, but because they can’t get early education and care. And we’ve got providers looking at closing their doors. So the Government has got to do something when it comes to childcare. And they can’t just snap back to the old system, because that is a very expensive system for families and could see a lot of families not being able to afford it. So they need to do something when it comes to early education and care, they need to look very carefully and in a way that supports workers to get back to work, they need to address that issue.

NICHOLSON: Julian if the Government says that the line was drawn at six million and now it turns out that only three million are on the Jobkeeper is there not room to extend the payment to those people who missed out even just a bit?

LEESER: As I say there’s a review of the Jobkeeper program that will be held at the end of June, that’s the time to consider any of these questions. But I would point out that this is borrowed money, and that it took us a decade to pay back $96 billion of debt left to us by the Keating Government. Paying back $130 billion will be very difficult, paying back $70 billion will be very difficult and take a long time. So I think that these things need to be considered soberly and in the context of the scheduled review that will happen at the end of June in relation to the Jobkeeper payments.

IBRAHIM: But surely Julian given the circumstances, given the economy is not going to be looking good for the next two or three years or so. Yes we will be paying for this for the next few generations or so. What is the difference between $130 billion or $60 billion, if we’re going to be in debt, why not lift all of society? Why not help out those who have fallen in through the cracks?

LEESER: Well I think that a few points need to be made here. One of the things that the joint ATO Treasury statement reveals is that part of the reason that it is being revised down is that the health effects of COVID-19 in Australia haven’t been as severe as people originally estimated that they were going to be. And that indeed the restrictions that have been placed on the community, that have been placed on businesses, have been eased more quickly than was thought at the beginning of the COVID-19 crisis. I think that you have to remember what the situation was like only a couple of months ago where I think that people thought that there was going to be six months worth of lockdown. That hasn’t proven to be the case and that has enabled Treasury to revise these figures. What I think has been successful about Jobkeeper is that it’s been a highly targeted program, and that it has used the tax system so that people are being paid through their tax file numbers. That’s the key thing to be taken away from this, there’s nobody who was not eligible for Jobkeeper who suddenly received a payment, there’s nobody who is eligible for Jobkeeper who is not receiving the payment. And for those people not eligible to receive Jobkeeper, many are eligible to receive Jobseeker. And after you’ve taken the tax out of it, there is a difference but there’s not an enormous difference.

NICHOLSON: Amanda with the childcare subsidy, not all of the measures introduced by the Government after the coronavirus pandemic or in response to the pandemic will be sustainable in the long-term. But there have been some suggestions with the subsidy that perhaps it would be eased off in a gradual way, in a transitional way. Is that something that you might support and what might that look like?

RISHWORTH: I think that we’ve got to be very clear that the Government is spending less on early education and care than it budgeted for, and so the Government’s argument around spending around early education and care as unsustainable is not true. They’re spending less on early education and care. But going forward, we need to ensure that there are three pillars really put in place, and that includes access and affordability. What we know is that a lot of people are not actually earning what they were earning before, they might be underemployed or unemployed, and their children shouldn’t be locked out of the early education and care system because of that. Equally, we know that at the moment, the current system isn’t working because a lot of families can’t get in.

So the Government does need to balance this correctly, make sure there is enough funding going into the system to sustain people being able to return to work, and indeed to get the care that they need. Because if people can’t return to work because they can’t access child care, that is not good for the whole economy. Not just for those families, but for the economy as a whole. So I think that the Government needs to look at this very carefully, and calibrate this very carefully.

IBRAHIM: Julian your thoughts on whether the child care system is working or not?

LEESER: I agree with Amanda when she says that the child care system is very important. It’s important for the health of the economy, it’s important for at risk children, it’s important for parents who are doing essential work. And the child care relief package that we’ve provided has allowed 99 per cent of child care centres to remain open. There was a review this week of the first month of the operation of the child care relief package, and it’s provided an extra $12 million to those child care centres where 30 per cent of full time employees were not eligible for Jobkeeper, and $800,000 to at-home or in-home childcare centres. But at the moment what we’re having is that the Federal Government is continuing a subsidy for childcare centres which was there beforehand and it is also paying Jobkeeper to childcare centres. The previous system that we had, a system which in some form will return, is a system that is both subsidy and payment. Because there is a public benefit in having child care, but there’s also a private benefit as well. And it is right, as in other areas of education like universities or schools, that there be some payment for private benefit and some payment to underscore the public benefit. But the final form of what the child care system will look like in the post-COVID world hasn’t been determined yet.

IBRAHIM: And on that point unfortunately we’re going to have to end this particular segment. So thank you very much to both of you for coming on the show.

ENDS

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