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Subsidise wages now, Mr Morrison

From the editorIt seems like a lifetime ago that it was okay to make jokes about coronavirus. Not man


March 29 · Issue #36 · View online
Your weekly wrap of national affairs, society, culture and politics, published by UnionsACT.

From the editor
It seems like a lifetime ago that it was okay to make jokes about coronavirus. Not many of us are laughing now. Our lives have changed forever and how we, and the government, respond in these crucial days and weeks will shape the next decade and beyond, something we explore in our main story this week. Also, in this issue, civil liberties come under threat as the government considers stricter measures to control COVID-19’s spread, while Virgin sticks its hand out for more of our money.
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Stay safe.
Guy Mosel, editor

Subsidise wages now, Mr Morrison
by Guy Mosel
As the COVID-19 crisis deepens by the hour, it’s becoming clear to even the most casual observer that the economic and social impacts will be with us for years to come.
The length and intensity of the aftershocks will be determined by the government’s response over the coming days and weeks.
It is, arguably, already too late. Thousands of workers are being laid off every day while casual hours evaporate and Centrelink collapses under the load of an unprecedented surge of claims for support.
The forecasts are dire. At the current rate Westpac chief economist Bill Evans estimates that another 800,000 Australians will lose their jobs by mid-year, more than doubling the unemployment rate to 11.1 per cent. Mortgage stress and defaults are sure to spike, with a five per cent contraction in the economy likely in the coming months.
It didn’t necessarily have to be like this.
Admittedly, even a capable government would struggle with the scale and complexity of the calamity we’re facing, so perhaps we shouldn’t expect too much from this lot. But Morrison has wilfully ignored economists and the lessons of other countries by failing to respond fast enough and in the right ways.
Bolstering the social safety net was a welcome move, and it seems like we’re getting closer to a comprehensive nationwide lockdown (which in the absence of a vaccine is the only solution – read more about that below), but their ideological reluctance to pour money into the economy will cost Australians dearly.
Morrison’s biggest mistake is his failure thus far to do anything adequate to protect jobs which, as the leader of a government deeply in love with jobs rhetoric, seems like a massive PR screw-up in addition to being an unconscionable dereliction of duty.
Businesses and unions alike have been urging the government to consider a wage subsidy to underwrite workers’ pay cheques and allow businesses to keep staff on the payroll.
It’s a model that’s been adopted all over the world. In the Netherlands companies that have taken a 20 per cent revenue hit are eligible for 90 per cent wage support. In Denmark, the government will match as much as 75 per cent of wages for companies facing the prospect of cutting at least 30 per cent of their workforce.
Even UK PM Boris Johnson, Morrison’s right-wing populist doppelganger, thought this was a pretty good idea, introducing an 80 per cent subsidy on wages for staff kept on by their employer during the crisis.
But the Australian government has refused to follow suit.
Early in the week Morrison said a wage subsidy wasn’t feasible because the systems didn’t exist to pay it, something echoed by Finance Minister Mathias Cormann on Friday. This, quite frankly, sounds like bullshit.
The ACTU, meanwhile, has proposed an Australian Coronavirus Wage Subsidy program which, for companies that suffer a 25 per cent revenue decline, would meet 80 per cent of wages for workers who would otherwise be made redundant or stood down.
ACTU president Michele O'Neil said “keeping people employed is both a financial imperative and a public health necessity”.
“The Morrison government must provide at least the equivalent wage subsidy [as the UK] for Australian workers if we are to avoid mass unemployment,” Ms O'Neil said.
“The Government must reassure Australian workers, and the businesses who employ them, that they are with them and will mobilise all of our collective resources to combat the health, social and economic uncertainty that lies ahead.”
Let’s hope they start to listen. And that it’s not too late.
Read more
Alison Pennington is a senior economist at the Centre for Future Work and is therefore much smarter than me and actually qualified to talk about this stuff. As she identifies, the government’s ill-designed plan to boost business cash flows (what they falsely claim is a wages subsidy) actually “amounts to public support for income inequality”. Her piece on this topic in New Matilda is well worth a read.
The week in review
👍🏽 A total lockdown can beat COVID-19…
A draft report [$] shows that Australia needs to place 20 million Australians into lockdown by April 7 to keep coronavirus cases under 200,000. It’s a pretty unfathomable thing to contemplate but adjunct professor Michael Georgeff, a mathematician and expert on artificial intelligence and health technology, says that social distancing alone could see peak cases reach four million, overwhelming our health system and spiking the mortality rate. Georgeff says the lockdown period would need to be one to two months.
The report is in line with other models that say 80 per cent of Australians must stay home to control the virus.
👎🏽 …but civil liberties are at risk
Experts are warning that some emergency measures may infringe our human rights well beyond the current crisis. Flinders University criminology and human rights law expert Marinella Marmo told The New Daily that rules introduced by governments during emergencies had a nasty habit of sticking around once the crisis had passed. “Any kind of location data mechanism, including drone surveillance and phone tracking, needs to be considered in light of ethical standards and human rights,” she said.
Victoria has just launched a new system, on the Whispr platform, to track the locations of confirmed COVID-19 cases and their contacts.
👍🏽 Keen for green
A new study has found that switching to electric vehicles (EVs) from petrol equivalents would lead to an overall reduction in greenhouse emissions, even when considering the vehicles’ full life-cycles. The report busts the myth that EVs have no environmental benefits because they may source fossil fuel power, with the researching finding that emissions can still be reduced even in regions where electricity production is largely carbon-based.
And speaking of EVs… in these dark and uncertain times here’s some fun news. Volkswagen has revealed an electric version of its classic 1966 Kombi bus. You can buy one outright or purchase a conversion kit to transform your old combustion engine version into a whisper quiet EV!
👎🏽 Perks for pollies
While the airlines petition the government for yet more handouts while laying off staff, Anthony Klan reveals the membership of Virgin’s ultra-elite “The Club”. Described by former CEO John Borghetti as “reserved for the airline’s most highly-valued passengers”, members are hand-picked by the CEO himself and are entitled to access to secret lounges. The membership list includes dozens of Coalition MPs, including Stuart Robert, Christian Porter, Peter Dutton and Josh Frydenberg.
Virgin, it should be said, is a 91 per cent foreign-owned company that, like its rival Qantas, has decided that taxes are optional, not paying a cent in four years despite billions in earnings.
Coronavirus is the end of the end of history
Greta's world
For your bookshelf
Quarterly Essay 77
Dark Towers: Deutsche Bank, Donald Trump, and an Epic Trail of Destruction, by David Enrich
"What a unionist looks like" t-shirt
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