Thank goodness for JobKeeper. We would have had a massive recession without it.
The Labor Party agreed JobKeeper was a spectacular success last year but now they are attacking it!
There are two reasons which show that Labor is now unfit for office.
Firstly, Labor is deploying deliberate amnesia about the COVID recession and secondly, Labor’s economics spokesman Jim Chalmers and his mates are again flagging retrospective tax changes.
On the first matter, Labor is pretending the queues at Centrelink in March 2020 never happened. Yet this was the first time Australians had seen such distressing scenes since the 1991 recession.
The 1991 recession was etched into my brain as a 7 year old because of the job losses in my own family.
From that point on, Australia enjoyed more than a quarter of a century of growth. Until the COVID-19 pandemic hit.
JobKeeper worked. At its peak JobKeeper supported around 3.8 million jobs and more than one million businesses, 99 per cent of which were small businesses.
JobKeeper saved around 700,000 jobs. Eminent economist Chris Richardson said: “We should be proud of JobKeeper. I certainly am.”
Yet Labor’s approach to JobKeeper has always been about politics.
Labor’s hapless Shadow Treasurer Jim Chalmbers and now biggest critic of JobKeeper said late last year: there needs to be some transition over time away from these extraordinary levels of support in the economy.. (because) JobKeeper won’t be there forever.”
Then he said in March 2021 that JobKeeper should be extended: “For too many Australians the end of JobKeeper means the end of their jobs …
Economist Steve Hamilton said of this: “It’s completely hollow for Labor – which has been lamenting the end of JobKeeper and calling for its return all year.”
Chalmers has personally expressed dozens of conflicting positions on JobKeeper but his polar opposite views underline his core interest is in the politics, never the substance.
On the second front, Labor is flagging retrospective tax changes which would smash small business and undermine the recovery.
Treasury told Parliament there were more than 300,000 businesses which received JobKeeper that did not experience their expected decrease in turnover during the first phase of JobKeeper (JobKeeper One).
More than 90 per cent of these businesses were small businesses when measured by number of organisations and in dollar terms. They had on average just 4 employees.
The way JobKeeper One worked, a projected fall in turnover of 30 per cent or more for a business under $1b in turnover was required. This was between April and June 2020.
Treasurer Josh Frydenberg said on 30 March 2020: “eligible employers will be those with annual turnover of less than $1 billion who self-assess that [they] have a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period.”
Eligible small businesses performed their assessments in good faith. Their assessments were required to be based upon reasonable assumptions for which the Australian Tax Office issued guidance.
These businesses are your local chemist, fish and chips show, florist or milk bar to name a few. These people assessed the situation in accordance with the law, many with a tax agent’s advice and they received JobKeeper payments which were vital to their survival.
They are part of the story of Australia’s economic resilience during this unprecedented COVID shock. They are the small businesses of Australia, the backbone of the economy.
They took up the lion’s share of JobKeeper payments. In many cases they are the same small businesses hit by ongoing lockdowns.
Yet Labor is demanding these businesses to repay JobKeeper payments which were legally provided during an ongoing economic shock.
Treasury said a clawback or tax on these businesses would undermine the recovery and be very challenging for these small businesses. They told Parliament: “if these funds were recovered, it could be problematic from an economic recovery perspective."
Jim Chalmers asserted Labor will claw back these payments if elected to Government at the next election when he told the ABC: “it remains to see how much of it will be left.”
The prospect of retrospective legislation against more than 300,000 small businesses is now real, notwithstanding the economy facing its biggest shock since the Great Depression.
Labor will pull the rug from underneath small business people who simply followed the law: the same people smashed by lockdowns.
What message does it send about Labor’s fitness for office? It shows they aren’t ready for government.
It continues a historical theme well known to small business people: Labor has never supported you and never will.
Andrew Bragg is Liberal Senator for New South Wales