Scrap JobKeeper. Boost JobSeeker

Via News:

Australia’s Reserve Bank Governor Phil Lowe has warned ending the $1500 JobKeeper’s wage subsidy too early would be a “mistake” and it may need to be extended beyond September.

Breaking with the Prime Minister’s rhetoric that the scheme needs to be phased out as soon as possible, the RBA chief has warned the premature withdrawal of stimulus could damage the economy.

But he’s proposed that any extension would likely to be more targeted, for example for the tourism industry hit by international border closures, an option the Prime Minister has previously flagged.

Giving evidence to Parliament’s COVID-19 inquiry today, he also described the nation’s April jobs figures as a “shocking set of numbers.”

How long do people have jobs that they don’t have, Captain Phil?

A much better idea is to leave JobSeeker at the boosted rate and scrap JobKeeper. It is a little lower to remind folks they need to find work, and a massive lift in the dole is long overdue.

By scrapping JobKeeper we avoid all of the mess associated with eligibility, the rorting and the sectional interests.

Scrap it and boost JobSeeker and let the cards fall where they may with no fiscal cliff.

The only problem is in ScoMo’s head given he just loves to kick the unemployed while they’re down.

David Llewellyn-Smith
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Comments

  1. How long do people have jobs that they don’t have, Captain Ph!l?

    He’s a great person to address the question to. He’s held down a job that nobody should have.

    A monkey locked in a room with a “lower teh rates” button would have done just as well. With less noise pollution, too.

  2. DominicMEMBER

    Spoken like a true Central Banker — although refreshingly hints at the truth (as opposed to the usual rose-tinted shyte they trot out after consulting their faulty models). The truth being that, once you start the handouts, you can never really end them, because the moment you do, everything turns to scheisse. We should expect endless rounds of stimulus between now and when the inevitable reset happens.

    • The90kwbeastMEMBER

      Not necessarily. fed reserve wound back asset purchases substantially over the last 4 years, when everyone said it would crash the stock market. That didn’t happen.

      • Yeah, and what happened last September? they had to go back to pumping it all up again.

      • DominicMEMBER

        What Mega said. To be clear, the Fed pumped the balance sheet up from $800bn pre-GFC to $4.3 trillion at its Yellen-peak, then Powell announced he was going reduce it – and all would be fine – but the strains in the monetary plumbing soon started to show, culminating in the Repo-calypse in Sep 2019, leading the Fed to frantically reverse QT and pump it right back up beyond its Yellen-peak. Now Covid-19 has added another couple of trill and any talk by the empty suits in ‘meeja’ (experts) of normalising the balance sheet will be dismissed as utter tripe — it’s simply not possible. The ‘system’ relies on perpetual inflation of the money supply and that’s precisely what will happen. I would bet my house on it.

          • DominicMEMBER

            “… but pulling it back hasn’t killed the market …”

            From the time they actually initiated QT, officially the pressure started building — the repo problems that occurred in Sep 2019 were a direct result of QT i.e. the draining of liquidity from financial markets. Markets react with a lag. If you can’t accept that then we’ll have to agree to disagree on this.

            There’s an awful lot of self-proclaimed ‘experts’ out there who think they understand what’s going but don’t have a clue. Be careful of those people.

  3. An extra $550 per fortnight in everyone’s pocket would make more sense than JobScammer.

    JobKeeper no doubt the biggest rort ever handed out to businesses. The $10k minimum cash flow boost not far behind.

    I can’t believe the hysterics we heard for years from the right wingers about $1000 one off cheques from Rudd and Pink Batts.

    • codeazureMEMBER

      The only good thing to come of this is stopping that nonsense. Shame Albo is so useless and just let the chance go by to pay back those years of whining.

  4. happy valleyMEMBER

    Talking of being screwed. I was about to have a lunch about 1.5 hours ago when RAMS (think Westpac) served me a sh1t sandwich.

    Effective from next Monday, they are butchering their bonus rate from 0.90% pa to 0.45% pa on their online Saver account, to give a total rate of 1.20% pa v. the current 1.65% pa. Savers yet again being r.ped by the RBA happy clappies and the private banksters to subsidise financially stressed borrowers?

      • happy valleyMEMBER

        Most likely compliments of the RB happy clappies, but the least that the private banksters could do is get their bank to provide a free tube of KY jelly (would be far cheaper than $10 a tube, as a bulk buy) to hand out with the latest NIR sheet for depositors?

    • Just gotta keep shifting that cash round to the highest(?) bidder mate.
      AMPSaver is currently offering 2.26% pa if you aren’t an existing customer. Was 2.65% bout a month ago so yeah…

    • Interest on savings is mean to retain your purchasing power, and with the very low inflation we have, your purchasing power is preserved even with a much lower interest rate. Now sure how you figure you are being screwed over. Your capital is intact and possibly has increased in value relative to everything else.

    • DominicMEMBER

      You, sir, are in dire need of an Offset Mortgage, not a Savings account. The latter is un-Australian, frankly.

      • I’ve never invested in an etf before, but the Vanguard Australian Fixed Interest looks like it has a running yield of 3.2%. Management fee 0.2%. NAV around $52.70. Would it be fair to assume that the NAV shouldn’t drop a whole lot in this climate? Also what else an I missing? I’m sure there’s a lot.

  5. Serious Q – what do you think will happen when you increase the financial incentives for not working?

    • Jumping jack flash

      Not an issue. Once the people use the free money boost to obtain the debt they need, they will need to work to repay it. You wont be able to repay the massive wad of debt that is required using the subsidy alone.

      An enormous, soul-destroying wad of debt is a great motivator to get people to work ceaselessly for around 30 years, give or take.
      The problem solves itself.

    • Jumping jack flash

      no no no.. That will never happen.
      A *wage* subsidy is now vital at this stage of the game.

    • Can’t do that, you’ll have the numberwangs at the ABS working overtime trying to do gymnastics on how to keep the UE rate below 7%. JK is making life sunshine and rainbows for them at the moment.

  6. Jumping jack flash

    Ooh its all happening!

    The debt isn’t growing. They’ve started up infinite QE but the problem with that is QE just creates debt potential. People still need to be eligible for the debt created by QE.

    Banks aren’t loosening eligibility criteria. Wages aren’t growing. Slaves are being turned away. Its a travesty! What can be done?!

    Never fear! If everyone gets a “little” boost to their wages, then suddenly they become eligible for a lot more debt, QE chugs on, the debt is handed out and houses grow in price.

    This continues until the subsidy needs to be raised, and of course that’s no problem. The government just does what’s needed to be done. The government buys the bonds. The banks create the debt. The banks give the government the debt to hand out to the people, the people use that money to obtain debt from the banks, the debt grows and the interest is paid, and everyone is happy.

    • “This continues until the subsidy needs to be raised, and of course that’s no problem.”

      Sounds like it’d induce an inflationary spiral unless you specify that you can only spend your UBI on property. And why not, it’s ScoMo we’re talking about. MortgageHelper.

      • Jumping jack flash

        its not inflationary because it is debt.
        Debt is a liability not an asset. It is net zero. Actually if you consider interest it is deflationary.

        • It’s the government’s debt. Presumably it’ll never be paid back, they’ll just borrow more to cover their debts because they’re never in surplus, it might even be negative so they pay back less than they borrowed. It’s not the debt of the private individual/subsidy recipient. Not everyone is going to put 100% of their subsidy into a mortgage for the entirely of their life so that money will make it out into the world and cause inflation.

          • Jumping jack flash

            I see what you’re saying, but it is still debt. It is accounted for as debt. It isn’t printing money and doling it out to the people.

            Besides, we need a bit of inflation at the moment. Shops were closing down all over the place before the virus due to lack of spending.

            Everything we are getting put in place now was simply brought forward by about 5 or 10 years by the virus. We would have needed all of this eventually because the sucking effect of the gargantuan debt obligation on the economy wasn’t being cancelled out by the inflationary effect of new debt being created. After a while, debt needs to go exponential, but the problem is the bank lending standards, etc, etc, etc

  7. JobSeeker is too close to the minimum wage to create an incentive to find work.
    Remember JobSeeker is likely not the only welfare most recipients would receive.. add in Rent Assistance and a single person may be on $1250 per fortnight (or more)- 0 hours work vs minimum wage ~$1400 gross per fortnight, 38 hours work, less after taking away tax! Who wants to work for an effective salary of ~$3 per hour?

    Unemployment payments likely need to be raised, but up to the full JobSeeker amount? No way.

  8. SnappedUpSavvyMEMBER

    job keeper, mortgage keeper, house price saver, house price booster, bank handout

  9. Arthur Schopenhauer

    Very short sighted DLS. Scrap it and the skills go, along with the plant & equipment.
    Germany has an unemployment system that helps the mittlestand companies (mostly manufacturers of specialty engineering equipment) in business, by paying half the workers wages for up to 6 months.(Those details are probably out of date/15 years old) It keeps specialized skills in companies, between contracts.
    Australia is sorely lacking a mittlestand.
    https://www.bmwi.de/Redaktion/EN/Dossier/sme-policy.html

  10. Arthur Schopenhauer

    It’s a good idea, with incredibly poor implementation.
    A big step up from the usual poor idea, poorly implemented.

  11. Currently JobSeeker pays more than the DSP, so if they decide to maintain JS at the new rate what will happen is that those on the DSP will probably want to switch over to JS or they’ll have to raise the DSP to match. I can’t see them doing the latter, so if there is a move away from the now lower paying DSP this is going to completely expose the unemployment figures.

    Currently one can get a 3 month Centrelink medical certificate to remove one’s job search requirement, with the current trend being that after the third certificate they will want you to apply for the DSP. With the DSP being already hard to access no-one’s going to bother if it ends up being a lower payment.

    Have already had patients who were previously agitating for a DSP now deciding not to apply given the increased rate of Jobseeker. No-one is sure what the government will do, and one could end up wasting a lot of time to eventually lose out in the long term.