Andrew Leigh (Fenner, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

My question is to the Treasurer. New analysis shows the Morrison-Joyce government gave more than $300 million of JobKeeper to firms that tripled their revenues. Given the government is chasing pensioners to return welfare overpayments, why is the government letting these businesses keep millions of taxpayer dollars they clearly didn't need?

Josh Frydenberg (Kooyong, Liberal Party, Treasurer) Share this | Link to this | Hansard source

It's hard to work out the member for Fenner. One minute he's saying he invented JobKeeper and that he voted for JobKeeper. Now he is saying that he's criticising JobKeeper. The reality is that JobKeeper helped save our economy. In the first six months, the program was based on an anticipated decline in turnover. The reason that we took Treasury's advice on that key point is that the economy was staring into an economic abyss. At that time we saw that the economy could have unemployment at 15 per cent or above. That means more than two million Australians. We all remember those images of our fellow Australians lining up outside Centrelink. Those images were, for many, reminiscent of the Great Depression. We responded with JobKeeper, based on an anticipated decline in turnover. Then there was a review after three months, and it was recommended that we leave the anticipated decline for another three months before we moved to an actual decline in turnover and a tiered system for the back half.

What the honourable member fails to understand is that the great uncertainty in the economy at that time meant that we gave businesses certainty through JobKeeper. We gave businesses the ability to plan for their future. We gave businesses the opportunity to hang onto their staff. That has meant that the unemployment rate today is 4.6 per cent, a 12-year low. Do you know what it was when we came to government? It was 5.7 per cent. We've been through a recession, and the unemployment rate today is lower than when we came to government. We also know that we avoided, through the recession, a scarring of the labour market like we saw in the eighties and nineties recessions, which would have meant hundreds of thousands of Australians being long-term unemployed. That has been avoided by the fact that the JobKeeper program provided that degree of certainty. It was a well-targeted program. In Treasury's review, they found that the average decline in turnover in April was 37 per cent for JobKeeper firms, but in non-JobKeeper firms the decline in turnover was just four per cent. That has been described by no less a figure than the Governor of the Reserve Bank as a remarkable program. Today Professor Steven Hamilton, a visiting fellow of the Tax and Transfer Policy Institute of the ANU, writes the following in the AFR:

… at a time of great uncertainty, when underpinning confidence was key, it's not crazy to have opted for the cleanest, simplest scheme that gave businesses an ironclad guarantee of what they'd receive.