'How about we don't spend it?': Coalition divided over $60 billion JobKeeper windfall - Sydney Morning Herald

The Morrison government will consider giving more help to workers who have been hit hardest by the coronavirus crisis as it grapples with internal division over whether to bank or spend the $60 billion saving from its recalculated JobKeeper wage subsidy program.

The Coalition is staring down calls to extend the emergency wage boost to more casual workers but will use an imminent review of the scheme to canvass whether key industries need extended help.

Treasurer Josh Frydenberg and Prime Minister Scott Morrison will decide what to do with the $60 billion windfall.Credit:Alex Ellinghausen

Government sources told The Sun-Herald and The Sunday Age there was no intention of extending JobKeeper to universities, state-owned companies or casuals who have been with their employers for less than 12 months.

In an extraordinary correction on Friday, Treasury revealed a "significant error" in its estimates meant the JobKeeper subsidy would only go to 3.5 million people, not 6.5 million, and would cost about $70 billion rather than $130 billion.

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The $60 billion costings blunder has divided the government backbench between those who want to save the money and others who believe it must be used to help more workers in sectors like tourism.

Queensland Liberal National MP Warren Entsch said the windfall was an "opportunity" to extend help for workers in affected industries. But his Liberal colleague Jason Falinksi, from Sydney's northern beaches, said the money should be saved.

"How about we don't spend it?" he said. "I know this is a novel idea but how about not spending money we don't have?"

Prime Minister Scott Morrison is also facing a renewed test in the Senate over the JobKeeper payment of $1500 per fortnight, with crossbenchers calling for the scheme to be widened.

Liberal National MP Warren Entsch said the $60 billion shortfall was an "opportunity" for new spending.Credit:AAP

Labor leader Anthony Albanese called on Mr Morrison to take responsibility for the costings blunder and reveal what it would cost to include more workers in the scheme.

"If they can't manage a program like JobKeeper to the tune of a mistake of $60 billion … then there has got to be a great question mark over how they'll manage the economic recovery," he said.

Mr Entsch said the $60 billion shortfall was not a "sin" but an "opportunity" because workers in tourism and hospitality would need more help after the scheme was meant to end in September.

"It means we're not going to borrow as much money as we thought we were, and that's fantastic," Mr Entsch said.

"But even if we don't spend the full amount, there will still be a requirement for us to support some businesses and to give them special consideration, and tourism is one of those. There's no question that they're going to require an extended period of time. This is an opportunity to do that."

Other MPs had ideas about where the money could be spent but were not prepared to speak on the record.

Treasurer Josh Frydenberg has acknowledged the need to help some industries more than others because of the way the economic shutdowns have hurt travel and services.

"There are going to be sectors of the economy that are going to come out more slowly than others. This is an issue that the government is thinking about," he told the National Press Club on May 5.

Asked on Friday about what he would do with the $60 billion, Mr Frydenberg said "this is not an invitation to spend more money" but the government would ensure payments were made to those who needed them most.

Officials have begun preparing for a Treasury review of the scheme that will report at the end of June and shape any decisions on adjusting or extending the payments.

Mr Frydenberg has asked for figures on the number of people who are receiving more under JobKeeper than they were paid in their jobs, a key issue yet to be quantified.

Any decision on continuing the scheme, or helping industries such as tourism, would depend on economic conditions over the next few months.

Liberal premiers also weighed in, with South Australian leader Steven Marshall saying there was a "really compelling" case for JobKeeper payments to be extended for some sectors, as did his Tasmanian counterpart, Peter Gutwein.

Federal Liberal MP Dave Sharma, from Sydney, said the $60 billion the government had not spent on JobKeeper was good news.

"Don't borrow any more": former deputy prime minister Barnaby Joyce.Credit:Alex Ellinghausen

"It shows the economy is in better shape than we thought and it means we have more fiscal firepower if we need it," he said. "Any further fiscal decisions will depend on the economic conditions - that's what matters."

Liberal senator Andrew Bragg said Mr Frydenberg had "built the plane while he was flying it" to launch the JobKeeper scheme, while fellow Liberal Julian Leeser said the error showed Australia was doing better than expected in the crisis.

Former deputy prime minister Barnaby Joyce said the $60 billion would be borrowed money, not money which was set aside, and rubbished suggestions it should be spent.

"It's like discovering that you've got a higher limit on your credit card so your solution is to go back to the shop and buy more junk," he said. "You owe enough money to the Chinese already, don't borrow any more."

But the union movement said the payments should go to up to one million more casual workers, while the Australian Industry Group said more employers should be included in the scheme.

The row has cast a cloud over the government’s economic forecasts, with Labor saying the shortfall shows there will be less stimulus flowing into the economy while government MPs saying it shows fewer workers need subsidies.

"It means that people have been making decisions based on the wrong information," said Labor shadow treasurer Jim Chalmers.

Labor is seeking crossbench support in the Senate for a motion that would strike out part of the JobSeeker rules so the money could flow to universities and state-owned businesses like dnata, which employers thousands of former Qantas workers in airport services and catering.

One supporter of that motion, Centre Alliance Senator Rex Patrick, said the shortfall would "rightly" put pressure on the government to be more generous with the scheme.

One Nation leader Pauline Hanson is seeking more spending in her home state of Queensland.

The party will approach the federal government for money for infrastructure to support jobs in Queensland, a spokesman said.

with Michael Koziol

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2020-05-23 14:02:09Z
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