WEDNESDAY, 7 OCTOBER 2020
SUBJECTS: Tax cuts; unemployment; social housing; wage subsidies; Anthony Albanese’s economic vision.
KELLY FULLER, HOST: We're still listening through the budget detail and let's continue our focus this morning. Stephen Jones is the federal Labor MP for Whitlam and has of course been watching with interest the budget with interest from his parliamentary role as well. Good morning to you, Stephen Jones.
STEPHEN JONES MP, SHADOW ASSISTANT TREASURER: Good morning, good to be with you Kelly.
FULLER: This legislation brings forward stage two tax cuts and brings big tax incentives to businesses and they likely to be introduced even as soon as today. I guess you haven't seen it yet, but will the Opposition support the bills?
JONES: Look give us a clean bill and you'll get clean passage to the Parliament. With the second round of tax cuts, this is the tax cuts for low and middle income earners. We've been calling on the Government to do this for 12 months so, you know, of course if they do what they say they're going to do it'll get our support and we urge them to move on it quickly. The second measure that is likely to be bundled up is the 26 billion dollar business investment incentives. This is the incentive to get businesses to bring forward their capital expenditure over the next two years. It's an eye-watering amount of money at 26 billion dollars. Again, this is a former Labor policy. We introduced it, the Abbott Government abolished it. we've been calling for a reintroduction of a scheme like this for some time. So if they get it right, we're inclined to support it. But we just want to look at the details of that. 26 billion dollars, the single biggest initiative in the budget. It requires scrutiny.
FULLER: Alright, let's break it down a bit. You mentioned the tax cuts and they might offer some relief to low-income earners, relief where some people say is really needed. Do you think it will go in to pay packets and be likely spent in the right way that will stimulate the economy?
JONES: Look we hope it will. The Government to date has been pretty unclear on this. What we know is if you're giving tax cuts to higher income earners, they're more likely to save it than spend it, money given to low and middle income earners is more likely to find its way into the tills in shops and businesses around the town. So that's why we're inclined to support it. We want to ensure that households that are already doing it tough, workers that are doing it tough, get to have more money in their wallets. So yeah, we want to support it. We want to ensure that we get that kick to the economy. The thing that's going to make the biggest difference is people having an understanding that you know, we've got this health challenge beat, but we can get back to our lives as normal and there's a pathway forward for the country. And I've got to say if there's a criticism that I have of this budget, you think if you're going to rack up the biggest deficit since World War II and take us into a trillion dollars’ worth of debt, that there'd be a clear plan for the country and its not there. There's money being sprayed around all over the place, but not a clear vision for where we want to take the country to after this recession has passed and I think what Australians are looking for.
FULLER: Wouldn't the Treasurer argue that the plan is to create jobs and that's the pathway forward. Isn’t that his plan and it is this is a business leader recovery. I think that's what that's that would be what the government would say to what their plan is.
JONES: Yeah, fair point. But if that's his plan and then it gets about C+ on its homework not an A. Unemployment between now and Christmas goes up by a hundred sixty thousand and it hits around about 7 percent and hovers between six and seven percent over the next three to four years, It's all about getting unemployment back down to 5% where it was before the virus hit, then it's not doing it.
FULLER: But what would you do instead then if this is a C+ business-led recovery, what would be your solution that would lift unemployment rates more quickly?
JONES: Well, there's a couple of things. Firstly, I've been calling on the Government to do more smaller, distributed projects throughout the regional areas like ours. So small infrastructure projects, you can get up and running quickly, housing, particularly social housing projects that you can get up quickly. That stimulates employment for people to build things and services and businesses that feed off those sorts of industries. And we should also grasp the opportunity and the challenge thrown out to us by the Aged Care Royal Commission, the Disability Royal Commission, which has said, we need more money, more investments and more staff working in the caring economy. So take the challenge, take the opportunity to provide more stuff more resources in the aged care sector, for example and the disability sector, for example. So two examples of boosting employment in the caring economy. Because like it or not, the workforces that build things are generally blokes, the workforces in the service economy more likely to be women and they're the ones have been hardest hit by this recession.
FULLER: You mentioned social housing. There have been repeated calls for the Government to do something in that field and I guess the sector's demonstrated the solid and positive impact it would have on the economy. Are you surprised the Government still hasn't headed down that road?
JONES: It's devastating. You know, everyone's been calling on investment in this area. We've got people sleeping rough in the middle of a pandemic. We've got a problem with affordable housing right throughout the country. It hasn't gone away. If you build affordable housing you get two bangs for your buck, you get a roof over the head of people who can't currently afford it and you’re also creating jobs in the building of those houses and you can do it everywhere in the country. It's not just something confined to the capital cities. So it really is a wasted opportunity not to do something in this place.
FULLER: Alright. Stephen Jones with us on ABC Illawarra just on 11 minutes to 8, having a look at the budget and Labor’s responsible will come on Thursday night, but we heard I guess a bit more on Job Keeper. Stephen Jones, Job Keeper ends in March, it'll become Job Maker. This is the scheme to pay between a hundred and two hundred dollars to an employer to hire a new young person under 35. Do you see it creating the workforce as predicted by the Treasurer, or do you have concerns as the ACTU and local unions this morning have repeated that it could create a less stable workforce because businesses will be inclined to dip into that subsidy twice?
JONES: Look, I don't want to be overly critical here. I welcome the fact that there's a wage subsidy program focused at young people. But we do have to be cognisant of the fact that there's over 900,000 people over the age of 35 who are on unemployment benefits, who are equally deserving of support to get back into the workforce and the Government doesn't seem to have a plan for older workers. I'm not critical of what they're doing for younger workers, I want that to go ahead, but those 900,000, close to a million, older workers who are on unemployment benefits deserve some support too, to get back into the workforce and it's not there in the budget.
FULLER: So all these measures as you said, you're likely to support. You'll get this Omnibus Bill as we understand it. Will you be able to unravel it or you just going to have to pass it in what is presented to you in rather quickly in haste because the Government's pressing so hard to pass on these tax returns or these tax incentives really quickly?
JONES: I'm glad you asked me this. The Government’s sort of almost from the moment they put down the pen on drafting the budget, they're out there on the politics saying so what’s Labor going to do here. The biggest problem we've had over the last 12 months is not Labor stopping the Government doing what it says it's wants to do, but Labor attempting to get the Government, to enforce the Government to do what it says is going to do. There's lots of big announcements, but no follow through. Whether it's the bushfire funds, or whether its infrastructure, big announcements and no follow through. Whether it’s alleged support for the arts and entertainment sector that never flows through. The big problem is not Labor stopping the Government, the big problem is the Government doing what it says it's going to do, you know, there's a yawning gap between the press conference and what the Prime Minister does when he goes back to his office. So we'll pass legislation that we've said we're going to support, tax cuts for low and middle income earners, support for businesses, we're ready willing and able to support good policy in that area. The real issue is getting the Government doing what it says it's going to do.
FULLER: Just before I let you go, the big numbers in the budget, the 213 billion this year the deficit’s reaching, it falls gradually. That I guess is the outline of Josh Frydenberg’s plan, but there's this huge recovery phase. And any structural reform now obviously on hold during that recovery. How does how does Labor’s plan into the future around this kind of level of debt?
JONES: Anthony Albanese will be providing a budget speech in reply tomorrow night where he'll set out a few ideas that we've been putting together for a plan out of the economic recession. But this is I've got to say in the broad, this is an opportunity, that should not be wasted, to restructure Australia for the good to ensure that we are setting ourselves up for the challenges of the next 50 years. That has to embrace a conversion to clean energy and remaking our manufacturing sector and ensuring that we were rebuilding our workforce with the skills that are necessary for the jobs, not just of the future but the immediate jobs that are emerging upon us. Ensuring that we're meeting the challenges of childcare and aged care. We will be setting out some pretty clear pointers in that area tomorrow night. I've got to say though, in the projections that the Government is put in its budget forecasts for the economy, for unemployment for growth, for wages, I'm pretty sceptical about a whole lot of them. Unemployment going up, but the assumptions about around economic growth in the out years, they well exceed what every international economic observer has forecast for Australia.
FULLER: Stephen Jones, thanks for your time this morning.
JONES: Great to be with you.