With JobKeeper payments set to drop from Monday 28 September, the Australian Greens have today released Parliamentary Budget Office-backed analysis showing it would cost less to continue JobKeeper at its current rate through to March 2021 than to bring forward tax cuts for high income earners by even one year, as is reportedly being considered in the upcoming Budget.
Arguing that the cost of extending JobKeeper could be funded by abandoning plans to fast-track tax cuts for multi-millionaires, and noting that the total cost of JobKeeper would still come in under the initial budget given the current $15b JobKeeper underspend, the Greens also announced today that they will move to disallow the looming JobKeeper cuts when the Senate resumes in Budget week.The Greens will move to disallow both the drop in the rate of JobKeeper as well as the ‘two-tiering’ of the payment, meaning all payments would continue at $1,500.
Using methodology from the Parliamentary Budget Office and updated figures from the Prime Minister’s August 7 JobKeeper update, the Greens analysis shows it would cost $5.6 billion to retain the existing JobKeeper $1,500 rate to the end of December 2020, or $11.3 billion to the end of March 2021.
This compares with Parliamentary Budget Office analysis that shows that bringing forward the scheduled personal income tax cuts by two years to July 2020 would cost the budget $27.7 billion, and that bringing the cuts forward by one year to July 2021 would cost $14.14b.
With businesses not yet employing people at pre-COVID levels, with restrictions on international travel and large gatherings remaining and with Victoria continuing to be in lockdown, there have been widespread calls for current levels of support to continue.
The Greens will argue that the better economic stimulus is making sure people on low and middle incomes are able to keep themselves homed and fed during a recession. Senior economists agree that tax cuts make for poor economic stimulus, as they will largely go to well-off people’s savings, not spending on essential services.
90% of the benefit of bringing forward Stage 2 of the tax cuts would go to the top 20% of income earners.
Lines attributable to Greens Leader, Adam Bandt MP:
“Scott Morrison could keep JobKeeper going for less than he’s planning to spend giving the likes of Clive Palmer an early tax cut.”
“Scott Morrison is cutting JobKeeper to fund an early tax cut for Clive Palmer.”
“This is trickle-down brutality.”
“If the money is there to give millionaires an early tax cut, then the money’s there to keep JobKeeper going in the middle of a recession.”
“With many businesses struggling, unemployment still through the roof and Victoria under lockdown, we can’t afford to cut JobKeeper.”
“Cutting JobKeeper now to fund a tax cut for multi-millionaires next year is savagely unfair and economically illiterate.”
“Scott Morrison is yet to explain how he expects Victoria’s almost 2 million JobKeeper and JobSeeker recipients to survive. The cost of living won’t drop by $300 on Monday and many callers to my office have said they will be forced to skip meals and take on extra debt just to keep a roof over their heads.”
“The Prime Minister is simultaneously arguing that we can’t afford to continue supporting people who are locked down in Victoria, but we must fast-track tax cuts for those who are already best protected against the economic impacts of the coronavirus.
“The Senate can stop the JobKeeper cuts. The Greens will move to disallow the cuts when Parliament resumes.
“If the Greens can get support from the crossbench and Labor, we can reverse the JobKeeper cuts in Budget week and recipients will only miss out on a fortnight of full payments."