The Morrison Government's Jobkeeper scheme has likely blown tens of billions of dollars on quasi corporate welfare, which has done little but boost dividends and executive bonuses, writes Tarric Brooker.
After years of opposition from various social services groups and a final strong push from Shadow Minister for Government Affairs Bill Shorten, the program was finally recently ended. But not before over 2,000 Robodebt notice recipients died, according to data from the Department of Human Services.
Some of the most vulnerable Australians including those facing homelessness or mental health issues were chased by the Coalition Government for their share of $721 million, that in most cases, they didn’t actually owe.
Now in the wake of the pandemic, the Morrison Government is throwing $70 billion at employers in the form of JobKeeper
The Government that railed against “Labor’s debt” from its GFC stimulus package for over a decade and underspent on the National Disability Insurance Scheme by over $4 billion, has now thrown caution to the wind and is spending like a drunken sailor.
In fairness to the Morrison Government, we do live in difficult and uncertain times. Assistance was clearly required. However, the way the policy was put together has led to an unacceptable level of waste and quasi corporate welfare, well beyond the inevitable degree of excess normally associated with emergency economic stimulus.
With the recent release of the national accounts for the second quarter of the year, it was revealed that company profits had risen by 15 per cent to their highest level on record.
According to an excerpt of a report from the Commonwealth Bank:
'Today’s strong result doesn’t reflect the reality of what was happening in the economy in the quarter. Rather, strong profit growth is down to the stimulus payments provided to businesses because of the COVID-19 pandemic.'
Despite an enormous $77 billion drop in sales activity for businesses, largely thanks to JobKeeper payments that were not actually needed, companies, overall, saw record-high profits.
All driven by a stimulus package paid for with your tax dollars.
Last week, Labor Member for Fenner Andrew Leigh criticised the Morrison Government for JobKeeper’s failure in Parliament, dubbing the program “DividendKeeper,” because a significant number of large corporations had used it to maintain or increase their profit dividends.
According to figures from the ABS, gross company profits rose by $14.4 billion during the second quarter.
To put that into perspective, the increase in corporate profits, driven in large part by JobKeeper program, is almost 20 times the size of the Robodebt debts for which hundreds of thousands of Australians were wrongly hounded.
In a world when the Morrison Government targeted stimulus at workers definitively affected by the pandemic rather than at employers, what could that prospective $14.4 billion achieve for the nation?
As part of its recent stimulus package, the Western Australian Government pledged $97 million to build and buy new social housing homes, with an average cost of each home at approximately $388,000.
At a cost of $14.4 billion, over 37,000 new social housing dwellings could be built, with the potential to house over 96,000 Australians (consistent with the average household size of 2.6 persons).
In one fell swoop, over 80 per cent of Australian’s 116,000 homeless people could be housed and the stock of social housing for vulnerable individuals expanded forever.
While it’s unlikely we will know exactly how much money was effectively wasted by the JobKeeper program for a long time to come, there is clear evidence that the policy is extremely flawed.
Whether it's priests claiming the benefit, Liberal and Labor party staff or billionaires using it to drive record corporate profits, the policy is potentially history's single most wasteful endeavour ever undertaken by an Australian government.
One day, when the pandemic has finally abated and the damage to the Federal budget is finally assessed, we will look on with deep sadness and disappointment. Not just because the debt has risen to troubling new heights, but because of what we could have achieved with that money as a nation.
The new world we could have built, that ended homelessness and got every Australian with mental health issues the help they need or any number of other important issues that could have been addressed. But instead, the Morrison Government has likely blown tens of billions of dollars on quasi corporate welfare, which has done little but boost dividends and executive bonuses.
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