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Issue #1925      July 27, 2020

Put people first

No wage cuts

The government has extended JobKeeper until the end of March 2021 and JobSeeker until the end of the year. However, it is phasing in a staged reduction in those payments that will impoverish workers and have a contractionary impact on the economy.

The government faced a critical crossroads in its economic response to the fall-out from COVID-19. To cut off the payments would have plunged the economy into deeper and prolonged recession and driven millions more Australians into long-term unemployment and poverty.

The JobKeeper and JobSeeker payments and other assistance programs had the aim of stimulating the economy and so keep some but not all businesses up and running on a profitable basis. Without the payments, there is no doubt that the economy would have taken a far sharper nosedive. If they were not continued past September the outcome would have been disastrous for working people and the economy.

To maintain them as they were would have increased the budget deficit. There is nothing wrong with increasing the deficit. Interest rates are close to zero and unlike people, governments are under no pressure to pay off debts that are manageable. But true to its neoliberal obsession with the holy grail of a budget surplus, the government was extremely reluctant to continue them.

Economic reality has forced the government to accept that people must have some money in their pockets to spend or its mates in big business will go under. That and pressure from big business and community organisations including the trade union movement have seen the government retain some economic support for workers.

It was Labor that recommended the premature wind back of JobSeeker and JobKeeper now!

The government should continue JobKeeper at its present rate and raise JobSeeker to the same level as JobKeeper. At the same time it should be focused on job creation programs to bring about a public-sector led recovery.

Wages under attack

Employers are making the most of the new workplace “flexibility” arrangements introduced under the cloak of COVID-19. Wages are being reduced, work hours and conditions changed at the whim of the boss. Workers who still have jobs are looking over their shoulders at the mounting pool of unemployed who are desperate for work.

The reduction in JobSeeker payment will only make the unemployed more desperate to accept any work under any conditions. For the last three months of 2020 it will be cut by $300 a fortnight to $815.70 or $58 a day. There is no indication whether a COVID supplement will continue into 2021.

As always, putting private profits before people, the government is talking about extending the flexibility arrangements and Labor has hopped on board. The government still has one eye on its neoliberal “back in black” obsession. It also plans massive tax cuts that will only increase the debt which in turn will be used as an excuse to impose austerity measures.

The extended scheme is still $44 billion under the original budget. There is no excuse for the cuts to wage subsidies or unemployment benefits.

Labor leader Anthony Albanese was highly critical of the government for giving more money to 875,000 workers than they had been earning. He callously described the payments as “waste.” These are workers struggling on very low wages in part-time or casual employment. They would spend every cent of the money and so act as a much needed stimulus.

JobKeeper

JobKeeper will remain at $1,500 a fortnight until the end of September as previously promised. Then it will drop to $1,200 for the next three months and to $1,000 for the first three months of 2021. That is for workers who were or are employed for twenty or more hours per week.

For casual and part-time workers on less than twenty hours per week, the amounts drop from $1,500 to $750 and then $650.

The number of unemployed and underemployed is in the millions and is set to rise with the lower rates of JobKeeper and JobSeeker, and ongoing restrictions on activities.

The government estimates that the number of people remaining on JobKeeper will fall from 3.5 million to 1.4 million by the end of the year, and even further to one million in the first quarter of 2021. It is not clear what this estimate is based on except for predictions that many more companies will be forced to close during the coming period. Their employees might, if eligible, receive JobSeeker payments.

Some employers in areas where there has been a pick up in business might no longer be eligible. The eligibility test will be re-applied before companies can continue to receive the subsidy.

The government still refuses to extend free early childhood education or include the staff of centres in the JobKeeper scheme. Likewise public university staff will remain excluded.

At present there are 1.6 million workers on JobSeeker (rebranded NewStart) or, in other words, 1.6 million people who are registered as unemployed or with little sporadic or low paid work. No one knows how many of the JobKeeper recipients are also unemployed.

Taken together, the number of unemployed and underemployed runs into the millions and is set to rise with the winding down of JobKeeper.

JobKeeper provides eligible employers with a $1,500 fortnightly subsidy for each worker kept on their books as employees or stood down. It must be paid to the worker. While far from perfect, it has kept many small businesses afloat and provided an income to many workers who would otherwise have had to turn to the lower paid JobSeeker for survival.

The government is taking a gamble with people’s incomes based on its hopes for no more lock-downs.

“Mutual obligation” requirements for people in receipt of unemployment benefits were suspended under JobSeeker. They are being reintroduced. (See Victoria’s stage-3 lockdown resumes.)

Universities hit hard

The ongoing exclusion of public universities from the JobKeeper program is yet another attack on education. Universities have seen a massive reduction in on-campus international students following the closure of national borders. On average almost a quarter of the student population and, in some instances, close to half had come from overseas.

Universities have been quietly sacking staff – fixed term contracts not renewed and casual staff laid off. The extent of these job losses is being hidden from staff and the unions representing them. The numbers are believed to be in the thousands with many more to go. With seventy per cent of staff classified as casual or on fixed term contracts, it is easy and cheaper to rapidly downsize. They are not eligible for redundancy payments. Four decades ago almost all staff were permanent and mostly full-time.

The treatment of private universities is different. Notre Dame University, Bond University, Torrens University, and the University of Divinity have been granted an exemption from eligibility criteria and are entitled to JobKeeper for staff!

The government defends this position saying they have “less access to support from the Commonwealth.” That begs the question: why should they have any support?

Way forward

The Communist Party of Australia demands that as a very minimum the government:

  • Extend JobKeeper and expand its coverage including the public sector
  • Raise JobSeeker to the present rate of JobKeeper
  • Keep JobKeeker at its present rate
  • Not impose its mutual obligation regime for JobSeeker recipients (see Victoria’s stage-3 lockdown resumes)
  • Nationalise job placement of unemployed and restore the former Commonwealth Employment Services
  • Make two more $750 Economic Support Payments to low income households
  • Enforce a moratorium on rent payments and ban evictions arising from unpaid rent in the case of hardship
  • Include public universities in the JobKeeper scheme
  • Restore free early childhood education and JobKeeper to workers in the sector
  • Provide the public with free masks to end the price rorting
  • Slash military spending by at least fifty per cent
  • Embark on a public sector job-creation program.

Next article – Editorial – “Palace letters” a cover-up for truth

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