On Thursday 23 July, Australian Treasurer Josh Frydenberg announced an ‘eye watering’ projected deficit of $1,844 Billion dollars in the 2020/21 financial year. For the Government that was announcing (with tortured grammar and celebratory coffee mugs less than 12 months ago) they were ‘already back in the black in the next financial year’, it’s a dramatic turn around. There aren’t too many that are critical of the about face, after all there has been a need to provide support during a pandemic. As Finance Minister Mathias Cormann suggested at the same media event — ‘what was the alternative?’ — which is deflection at best.
It’s not hard to argue that there was a need. The unofficial unemployment rate is now above 10%, there are predictions that younger workers in insecure and ‘gig’ jobs, school leavers and females will be feeling the brunt of underemployment for years to come and there are thousands of small businesses that will never reopen their doors. As Cormann suggested, there is a need for Government to support the members of our society so that we actually retain a society. It’s also ironic that a conservative Government has correctly, after a bit of dithering, come to the realisation that austerity is not the response to economic turmoil.
But all the support is hiding some real issues.
Casualisation of the workforce has ensured there is a significant number of Australians that rely on a number of part-time jobs to live. The government recognised this in the framing of JobKeeper to be only claimable from one employer. While most part-time employees don’t earn $750 a week (or $1500 a fortnight) from any one employer, the reality is that across two or three part-time jobs, there is probably a large number of individuals with a number of ‘part-time’ jobs that have taken a wage cut (in addition to those who have had scheduled pay increases delayed).
The Coalition (who have been the party of government since 2013) have aided and supported the casualisation of the workforce in the name of ‘flexibility’. While some would appreciate the flexibility of working around family or study commitments, a considerable number of people don’t have the luxury of picking and choosing their hours or employment status. A lot of people have 2, 3 or even more jobs to make a ‘living’ wage. The problem with that is that there are 2, 3 or more employers — none of which would probably be all that keen on a discussion around their arrangements not being as important as other commitments in people’s lives, leading to employment insecurity.
Until we have a pandemic, the holders of casual and insecure jobs were seen as dispensable rather than the actual essential workers such as transport drivers, child-care workers, shelf stackers, shop assistants, hospitality staff and so on. There is also a significant number of health professionals such as nurses and aged care workers in casual and insecure employment. While in theory, casual workers are paid a loading to ‘compensate’ for the lack of sick leave, holidays and the other benefits of permanent full-time employment, usually the loading is insufficient to do so. It’s also common that casual and insecure workers don’t have a financial security blanket to fall back on if disaster strikes. Former Prime Minister Paul Keating recently alluded to this at a superannuation webinar
Of the income support in Australia to date during the COVID crisis, $32 billion has been found and paid for by the most vulnerable, lowest-paid people in the country,” he told a superannuation webinar. “And $30 billion has been provided by the Commonwealth under JobKeeper [so far].
Treasury estimates that by the time the scheme ends on December 31, workers will have withdrawn a total of $42 billion from their super accounts, up from the original forecast of $29 billion.
The scheme has proven so popular that 590,000 Australians are estimated to have completely cleaned out their retirement savings, the majority of them under the age of 35.
It isn’t only the typically younger people that don’t have secure employment that have a problem. For years, a number of government ‘services’ such as the aged care system have been run to encourage ‘for profit’ operators to do what they are best at — making a profit. Certainly the federal government has a number of standards and processes that must be followed, but at the end of the day those in need of assistance in the later years of their lives are being used as a commodity for making profit by operators with the full encouragement of the federal government. While most of the staff working with the residents in aged care facilities seem to care about how they do their job, the Aged Care Royal Commission saw fit to table an interim report in October 2019 entitled ‘Neglect’, which implies there are a lot of people employed to minimise the cost of compliance rather than maximising the care we show for our seniors.
Cormann was half right when he suggested during the pandemic there was no alternative to massive funding injections into the economy to ensure that people could continue to live through uncertainty. What Cormann didn’t address was that the casualisation of employment, privatisation of core government services that should be looking after the aged, the young and the homeless, the refugees and the environment with the care and respect they deserve, rather than the profit motive, since 2013 are large contributors to the economic problems the Coalition currently finds itself dealing with.
While it’s too late now to avoid throwing heaps of money around to mitigate the effects of the Coaltion’s long term strategy being proven demonstrably wrong, there is a viable alternative for the next ‘crisis’. The alternative is that in the future, core government services are offered and funded appropriately by government, those that suddenly lose income aren’t required to raid their savings or superannuation to live, we treat climate change seriously (including funding renewables over fossil fuel) and never again are those that need our assistance commodified to the stage where the Australian media can run headlines such as Maggie Beer says food budget of $7/day per aged care resident is ‘impossible‘.
What do you think?
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