Flat White

Why is Labor still at war with JobKeeper?

28 September 2021

1:04 PM

28 September 2021

1:04 PM

JobKeeper saved Australia from a deep recession. 

Labor knows this is true. They know that for the 3.8 million Australians and around one million small businesses who benefited, JobKeeper got them through the worst of the crisis.  

Labor’s mission is therefore to damage the JobKeeper brand. No matter the facts. No matter the cost.  No matter the implications.  

This is why Labor has had more positions on JobKeeper than you can poke a stick at. Here are four of their most self-serving.

Firstly, the same people attacking the programme were its biggest supporters.

Labor’s Shadow Assistant Minister for Treasury Andrew Leigh now says the Morrison Government should “apologise” for JobKeeper. But he said last year: “JobKeeper’s been the most important program that’s been put in place…If we hadn’t had that program in place, we’d be looking at unemployment more like 20 per cent than 10 per cent.”

He also said: “Without it, we’d be looking at unemployment rates at Great Depression levels.”   

Secondly, jumping on the back of inaccurate ABC reporting, Labor desperately claimed that JobKeeper was paid to dead people.  

Embarrassingly, Labor’s Shadow Treasurer Jim Chalmers said in January this year that “Morrison and Frydenberg have been sprung here sending JobKeeper cheques to dead people.”

This was false. As the ATO said in February this year, “the ATO is not aware of any ultimately successful claim for deceased or other fictitious employees.”

Third, Labor couldn’t decide whether to extend or stop JobKeeper.

Labor’s Shadow Treasurer Jim Chalmers said in March 2021 that JobKeeper should be extended: “For too many Australians the end of JobKeeper means the end of their jobs … The future of JobKeeper is in Scott Morrison and Josh Frydenberg’s hands, so any job losses that occur as a consequence of this decision will be on their heads.”

This was only a few months after Chalmers said it should be cut or junked “there needs to be some transition over time away from these extraordinary levels of support in the economy.”

Fourth, and most concerning of all, they now want to tax JobKeeper recipients retrospectively.  

Labor wants retrospective tax changes for JobKeeper payments. Earlier this month, Treasury told the Senate 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.

Ninety-nine percent of these businesses were small businesses when measured by number of organisations and in dollar terms. They had on average just four employees. 

Remember, Australia was facing an economic cliff on 30 March 2020 when JobKeeper was announced. The only question at the time was, how bad will the recession be, not whether there would be a recession.

The hundreds of thousands of businesses which self-assessed their eligibility did so in good faith. Their assessments were required to be based upon reasonable assumptions for which the Australian Tax Office issued guidance.  

These businesses are local supermarkets, dry cleaners, florists and service stations to name a few. They assessed the situation in accordance with the law, many with a tax agent’s advice and they received JobKeeper payments that were vital to their survival.

They are the same small businesses smashed by lockdowns in Sydney in 2021 and Melbourne in 2020 and 2021. Yet Labor is now demanding these businesses to repay JobKeeper payments.

Treasury said a clawback or tax on these businesses would undermine the recovery. They told the Senate: “if these funds were recovered, it could be problematic from an economic recovery perspective.” 

Once again, Labor’s into retrospective tax mode. Just as they were at the last election with their Retiree Tax proposal to add a new tax on superannuation. 

As he told the ABC recently, if elected to Government at the next election, the only question on Chalmers’ mind is “it remains to see how much of it will be left.”

Labor MPs are falling over themselves to recover this money.  As Labor’s Catherine King said recently when asked if it was too late to get money back from these businesses: “Well, no, I don’t think it is, frankly, ‘cause governments make laws and change laws all the time.”

And so too Ged Kearney who just last week added her voice: “we’re asking people to pay back money…”  

For Labor it’s all about politics no matter the consequences. They know JobKeeper worked. The RBA found JobKeeper saved around 700,000 jobs. Before the pandemic the unemployment rate was 5.1 per cent. The Treasury thought unemployment during the pandemic could have reached as much as 15 per cent and stay above 12 per cent for two years.

This would be on par with prior recessions where legions of workers never worked again. But, in July this year the unemployment rate was at 4.6 per cent, in large part thanks to JobKeeper. 

Labor wants to pull the rug from underneath small businesses which in the middle of a crisis did the right thing and followed the rules.

What message does it send about Labor’s fitness for office? It shows small businesses would all need a crystal ball if Labor wins the next election. They’ll need that crystal ball if they have any chance of complying with Labor’s tax and company laws. 

It continues a historical theme well known to small business people: Labor hates you.

Small business is Labor’s target. But the whole economy will suffer if Labor continues its war on JobKeeper. 

Punishing small business and weakening the economy may suit Labor’s political objectives, but it is the wrong approach for Australia.

Andrew Bragg is a Liberal Senator for New South Wales

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