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Public servants confirm mismanagement by Morrison ministers

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Cartoon by Mark David/@mdavidcartoons

Answers from senior Treasury officials at last week’s Senate investigation contradict Government claims, writes Alan Austin.

IF THERE WAS one thing which should unite all media commentators, economic analysts, religious leaders and decent citizens in outrage against the Morrison Government, it is this. After the robodebt scandal in which the Government relentlessly pursued debt repayment from countless poor people, it can’t be bothered chasing millions rorted by the rich.

The Coalition was ruthless in harassing pensioners for puny debts, that were often non-existent. It didn’t stop even when it was proven many were taking their own lives in despair.  But they now refuse to require corporations to repay taxpayer funds fraudulently pocketed.

This was admitted in the Senate Select Committee on COVID-19 last Thursday 11 February, by senior public servants, who confirmed other damning outcomes of this administration’s gross economic mismanagement.

These include money sent to dead people, money paid to people in jail, that there is no imminent plan to boost workers’ wages and no intention to restore the jobless rate to among the world’s best — where it was before this incompetent regime took office.

JobKeeper scheme rorted by the corporations

Thursday’s hearing was told that the Government has handed billions of borrowed dollars to corporations under its JobKeeper scheme, with no mechanism to ensure all wrongful payments are repaid.

Treasury officers said that some blatant instances of deliberate fraud were being pursued by the Tax Office. But Morrison’s Cabinet is not interested in chasing all overpayments resulting from erroneous documentation or other causes.

Deputy Secretary of Treasury’s Fiscal Group Jennifer Wilkinson stated:

“At the end of January, the Treasurer certainly said, when he was asked, that if businesses didn't need the JobKeeper money and were in a position to repay it, then he'd welcome that. But there's certainly no legal requirement for them to do so.”

The rorts have not been minor or incidental. The Tax Office’s Serious Financial Crime Taskforce is currently investigating seven corporations with two already before the courts. Another 16 are under consideration. Penalties of between 25 and 75% have been imposed on 43 companies with another 14 under review.

Tax Office Second Commissioner Jeremy Hirschhorn said, “about 0.4 per cent” of participants collected wrongful overpayments. That may sound low. But in an $83 billion program, that is about $340 million. Hirschhorn said the Tax Office had “clawed back $135 million already”, was still pursuing more but would not collect it all.

So we will never know precisely how much has been scammed. Hirschhorn said:

“In terms of the noncompliance we're picking up — we'll never capture all non-compliance. I suspect there is some sloppiness that we don't pick up and we can't pursue every case.” 

The issue here is not just the losses to Australia’s taxpayers. It is also the craven hypocrisy. During the Rudd and Gillard years, the media and the Coalition in Opposition hounded Labor mercilessly for any overpayment, however unavoidable and however minuscule. Today the mainstream media is eerily silent.

Money went to dead people

In late January, ABC News and Labor’s Shadow Treasurer Jim Chalmers claimed that the JobKeeper program’s rorts included payments to dead people and to prisoners. These were the same allegations the Coalition and the media made with crazed ferocity against Labor’s 2009 stimulus payments.

Treasurer Josh Frydenberg falsely asserted on Insiders on 31 January that Chalmers:

“...was contradicted by the ATO who put out an official statement saying to the best of their knowledge, they're not aware of any successful payments to deceased persons ...”

But on Thursday, Commissioner Hirschhorn admitted there was:

“... a very small number, on review, of people whose employee had died and they maybe didn't immediately update their payroll system.”

Money went to prisoners

Hirschhorn acknowledged further that:

“We identified that there were 80 people who had been at prison at some stage during the period who JobKeeper was claimed for.”

So Chalmers was right and Frydenberg was wrong, as is almost always the case.

Wages growth among the world’s worst

Treasury Deputy Secretary Luke Yeaman conceded that workers’ wages will be “around 1.25% in the average sense” for the next two years and then “2% in 2022-23 and 2.25% in 2023-24".

This current growth rate ranks 24th out of the 35 countries whose rates are shown at Trading Economics  a truly shameful ranking given Australia’s vast wealth and the current extraordinary export boom. The higher forecast for 2023 still ranks only 20th.

Jobless rate to remain in the world’s bottom half

The Senate was told that the current jobless rate is 6.6%, which ranks among the 37 OECD countries a dismal 20th. That contrasts starkly with ten years ago, during the last global crisis, when Australia’s jobless rate ranked third in the OECD  behind only Norway and South Korea.

Yeaman said he expected unemployment to fall to “around 5.75% by 2022-23 and 5.25% by 2023-24” — which is, again, an appalling admission.

Even if the other OECD member countries did not improve their jobless rates at all over that period, Australia would still rank a miserable 13th. But, of course, most of them will reduce them substantially as vaccine delivery hastens economic recovery. So Australia looks like it won't be getting back to the top of the global rankings under this regime.

The bottom line in Thursday’s revelations is that the Coalition has failed to keep the Australian economy functioning at its full potential. Most Australians are poorer as a result. This incompetence is compounded with hypocrisy.

That’s based on the testimony of the Government’s own trusted officials.

Alan Austin’s defamation matter is nearly over. You can read the latest update here and help out by contributing to the crowd-funding campaign HEREAlan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @AlanAustin001.

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