Removal of the jobkeeper wage subsidy and coronavirus supplement to unemployment benefits will result in a “difficult period of high risk, uncertainty and anxiety for businesses and households”, a major employer group says.
The Australian Industry Group issued the warning in a submission to the Fair Work Commission calling for a freeze on the minimum wage, echoing economists’ concerns that September looms as a cliff for $134bn of government supports.
The employer group’s intervention comes after Treasury revised its September unemployment forecast down to 8% and Labor continued to pursue the government over possible cuts to the $70bn jobkeeper package as a result of better-than-expected health results and the lifting of Covid-19 restrictions.
In question time in federal parliament, Scott Morrison revealed the government would respond to the Treasury review of jobkeeper – due by the end of June – by about the third week of July, after the Eden-Monaro byelection.
On Wednesday, the Fair Work Commission held its final hearing in the annual minimum wage review, in which the Australian Council of Trade Unions has called for a $30-a-week increase in the minimum wage in part because of signs of an economic recovery as Covid-19 restrictions ease.
The AiGroup emphatically rejected the view the economy is on the mend, citing the fact GDP is expected to fall by 8% in the second quarter, which would be “more than twice the size of the peak quarters of shrinkage in either the 1980s or 1990s recessions in Australia”.
The submission noted the government had given “unprecedented levels of government financial support”, including the $1,500 fortnightly jobkeeper payment and doubling jobseeker to $1,100 a fortnight.
Although there was a slight improvement in May business indicators, this was “a result of [government] support … not an indication that the economy is ‘recovering’ in any meaningful or sustainable sense”, it said.
“Looking ahead, it is important to be mindful that much of this crucial assistance is due to expire in September.
“The next few months until September – and then the months after the direct support is withdrawn – will be a difficult period of high risk, uncertainty and anxiety for businesses and households alike.
“It is essential that actions or decisions that will add to this risk are avoided.”
On Wednesday, Morrison defended the government’s decision to remove jobkeeper from the childcare sector from 20 July, despite appearing to guarantee the program would be in place until September.
“The jobkeeper legislation does remain in place until the end of September.”
“But where there is a better way to do things, we won’t step aside from doing them in a better way,” he said, arguing that $708m of alternative subsidies were more evenly shared across the sector.
Earlier, the Labor leader, Anthony Albanese, accused Morrison of breaking a promise to the childcare sector and delaying the jobkeeper review until after the 4 July Eden-Monaro byelection.
In question time, Morrison responded by saying the government would assess possible changes to jobkeeper within weeks of receiving the review because it is “focused on the economic wellbeing of the country at a time of great crisis”. He accused Labor of viewing the delay “through a political prism”.
Labor and the Greens are still pushing in the Senate to extend the jobkeeper payment to public universities and foreign-government-owned companies such as airline caterer Dnata, although a vote on the latter was delayed to 17 June as Labor continues to pursue elusive support from One Nation.
At a rally calling to extend jobkeeper to 5,500 workers at Dnata, the Australian Council of Trade Unions president, Michele O’Neil, accused the government of ignoring and exacerbating the gendered impact of coronavirus by decisions that disproportionately left women off the jobkeeper payment in the childcare and airline catering sectors.
O’Neil told Guardian Australia the pandemic “hasn’t treated everyone the same”, because women were a higher proportion of the newly-unemployed and had lost more hours of work on average.
She said the government must first acknowledge and then “respond” to the gendered impact of the recession by supporting the public sector and service industries that were disproportionately female, including hospitality, higher education and the arts.
“[The government] are now suggesting there will be a limit to what they provide in some sectors. We know that some sectors are hard hit, but there is not one sector that’s not had an impact when it comes to workers’ jobs.”
Liberal MP Jason Falinski told ABC TV the government needed to ensure the stimulus programs were “as targeted as they possibly can be”.
“What I would like to see us do is not spend money we don’t have when we don’t need to,” he said. “So there are some sectors that don’t need the support.”
Falinski suggested the Australian Taxation Office could identify sectors that no longer needed the wage subsidy to help support the “cafes, pubs, restaurants, tourism-related, education-related sectors [that] have actually suffered more than other sectors in the economy”.
