The government will spend $48 million to safeguard mental health. Extending JobKeeper would safeguard it even more


Anthony Jorm, University of Melbourne

Federal health minister Greg Hunt has unveiled a A$48.1 million COVID-19 mental health plan, featuring A$7.3 million for research and data collection, A$29.5 million for outreach to vulnerable people, and A$11.3 million for communication and other outreach programs.

This is on top of the A$1.1 billion Medicare package to tackle mental health and domestic violence, announced in March, which included funding for telehealth mental health services by GPs and mental health practitioners.

Is the funding needed?

Mental health experts have warned of a “second curve” of mental ill-health in the wake of the COVID-19 epidemic. This will result from widespread anxiety and depression, both about the disease itself and the knock-on social and economic effects of the lockdown.




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We need to flatten the ‘other’ coronavirus curve, our looming mental health crisis


Modelling has predicted that suicides could increase by 25-50% per year for up to five years, if urgent action is not taken.

It is hard to rely on any prediction with confidence, given this situation is unprecedented. Recent research from the Australian Bureau of Statistics indicates that the mental health effects of the pandemic are not dramatic so far. The graph below shows data from a national survey of symptoms carried out in April 2020, compared with earlier national survey data collected in 2017-18.


Author provided

There has been a significant increase in feeling “restless or fidgety” and a trend towards more people feeling “nervous”. This probably reflects the confinement of the lockdown and anxiety about infection. Increases in anxiety are not necessarily a bad thing, as they motivate people to protect themselves against infection. Fortunately, the more serious symptoms of depression did not increase; in fact, there has been a signficant decrease in the number of people who report feeling “depressed”.

Similarly, early data indicate there has not been an increase in suicides in Australia, and Japan has actually reported a decline in suicides. This seems paradoxical, given the surge in unemployment and financial uncertainty.

Yet it has long been recognised that suicides can decrease during times of war if there is a greater sense of purpose and social cohesion. Whether our national response to the COVID-19 pandemic will also produce these protective effects is unclear, but the potential is there and should be encouraged.

While the early effects on mental ill-health have not been dire, it is very early days, and the predicted adverse consequences of the pandemic and lockdown may yet be seen. Given the uncertainties, the government’s planned investment in gathering better data seems wise.

Will it make a difference?

The biggest slice of the government’s new and previous funding packages will go towards extra Medicare services. But although this seems an obvious response, past experience indicates it is unlikely to have a major impact.

Over the past two decades Australia has had hugely increased the provision of mental health services, but there has been no detectable improvement in the mental health of the population. One likely reason is that the extra services are not of sufficient quality to make a difference, with people not getting enough treatment, or services not being targeted to those most in need.




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Coronavirus has boosted telehealth care in mental health, so let’s keep it up


What seems more likely to have a beneficial effect is the funding put into the JobKeeper and JobSeeker schemes. The evidence is clear that mental ill-health is associated with job loss and low income. These schemes are keeping people in employment and providing incomes, which means they are directly tackling key risk factors for mental ill-health.

If this preventive benefit is to be maintained, it will be necessary to extend these schemes beyond the planned six months. Now that would be a real investment in the nation’s mental health.The Conversation

Anthony Jorm, Professor emeritus, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Coronavirus TV ‘support’ package leaves screen writers and directors even less certain than before



Worst Year of My Life, Again!
IMDB

Kay Nankervis, Charles Sturt University

Federal Communications Minister Paul Fletcher announced three measures last week to help commercial TV broadcasters deal with COVID-19 financial stress.

First, the spectrum tax broadcasters pay the government for access to audiences will be waived for 12 months.

Second, the government has released an options paper on how to make Australian storytelling on our screens fair across new and old platforms.

But it’s the third measure that is a shock: for the rest of 2020, all quotas requiring commercial TV networks to make Australian drama, documentary and children’s television have been shelved. Fletcher said networks can’t create the content because COVID-19 constraints have stalled most production.

But arts, screen directing and screenwriting bodies disagree. They say the quota pause across two financial years will cost jobs. And they’re worried this measure signals how the government will act on regulation options in the paper released at the same time.

4 ways forward

The paper from Screen Australia and the Australian Communications and Media Authority (ACMA) explores two issues: firstly, how to promote Australian drama, documentary and children’s television across all home screen platforms; secondly, how to level the regulatory playing field across those platforms.

Commercial TV broadcasters have had to meet a 55% Australian content quota for decades – including sub-quotas of drama, documentary and children’s programs. Meanwhile, the global streaming services Australian audiences are flooding to, such as Netflix and Stan, do not have to meet any quotas. Nor do other digital platforms in Australia.

The Screen Australia/ACMA paper presents four possible ways forward:

  1. keep the status quo: leave commercial networks as the only platform bound to content quotas
  2. minimal change: ask streaming services to invest voluntarily in Australian content and revise what commercial networks have to produce (maybe axing children’s TV quotas)
  3. establish a “platform-neutral” system to compel and encourage Australian content-making across all of commercial television, digital platforms and global streaming services
  4. deregulation: no one – including commercial networks – would have to meet any content quota requirements.

There is still time for industry bodies to respond to these choices. But option 3, cross-platform incentives and Australian content rules for all, would appeal most to the arts sector. It is the only option of the four which genuinely promotes Australian storytelling on our screens and the jobs that go with it.

Streaming services such as Netflix and Stan will hate that proposition. They and other digital platforms will resist having to follow content rules.

Would hit kids’ show Bluey have been made without content quotas?
ABC

Levelling the field or throwing away the rules?

Commercial networks have long sought a level playing field – and the platform-neutral option offers that. But what they really want is the freedom the other platforms have now: to make and deliver whatever content they think audiences will watch. That’s option 4: total deregulation and all content obligations removed.

Deregulation would hurt Australian creative production jobs. A PricewaterhouseCoopers (PwC) study quoted in the Screen Australia/ACMA paper predicts that if quotas were dropped from commercial television, children’s TV production there would end, drama production would fall 90% and documentary making would halve.

Enter the government’s Relief for Australian media during COVID-19: commercial networks still have to broadcast 55% Australia content in 2020. But they don’t have to make drama, documentary or children’s content as part of that quota.

The Australian Writers Guild (AWG) – representing drama and documentary screen writers – has slammed the quotas pause. They say the government has abandoned creative workers to help a handful of media companies. They’re worried this trial deregulation will change the production landscape forever. And they accuse networks of using COVID-19 as “the excuse they need in their quest to end the quota system once and for all”.

The Directors Guild, Screen Producers Australia and the Media Entertainment and Arts Alliance are also anxious about screen jobs – and where the federal government will go on the quotas issue.

That’s understandable.

We’ve just seen the government dismiss Australian content quotas as “red tape”. We can only guess where its sympathy for corona-stressed TV networks will take us next.The Conversation

Kay Nankervis, Lecturer in Theatre, Media and Creative Practice., Charles Sturt University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

For most universities, there’s little point to the government’s COVID-19 assistance package



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Andrew Norton, Australian National University

COVID-19 has hit the higher education sector hard – with an up to A$4.6 billion estimated loss of revenue from international students.

The government will not compensate universities for international student losses. But on Easter Sunday Education Minister Dan Tehan announced limited financial assistance for higher education, aimed primarily at domestic students.

Under the plan, the government will guarantee funding for universities at their current levels of enrolment for the rest of 2020 – meaning if enrolments drop, the funding won’t. It will also “slash” student fees for short, online courses in national priority areas such as nursing and IT.

Universities Australia says the package is a first step. This is true when it comes to the funding guarantee, but the premature policy on short courses is a wrong step.

Domestic student funding, in detail …

The university financial crisis was triggered by fewer-than-expected international students. But in some universities, weak domestic demand has exacerbated the problem.

The University of Sydney announced last week it had 5% fewer domestic students than it expected. Other universities, such as La Trobe in Victoria, have also revealed domestic student shortfalls.

Normally, universities lose money for enrolling fewer domestic students than they anticipated. Under the higher education funding legislation, total government payments for each year cannot exceed the number of students actually enrolled multiplied by the relevant discipline-based tuition subsidy. Usually, the fortnightly payments universities receive from the government are adjusted down if enrolments are lower than expected.

But under this plan, universities will receive their previously-expected 2020 funding amounts, probably based on levels announced in December 2019. This will require some legal changes the government will make during 2020.

Only a minority of universities are likely to be suffering from low domestic demand. But for these institutions this additional funding will be helpful.

HELP payments guaranteed, but have to be paid back

HELP student loan payments to universities on behalf of students – HECS-HELP for government-supported students, FEE-HELP for full-fee students – will also continue according to December 2019 forecasts, even if enrolments fall short of previous predictions.

If higher education providers – the private higher education sector as well as public universities using FEE-HELP – take advantage of this option, they will need to repay any excess HELP loans between 2022 and 2029.

As the funding legislation gives the government significant discretion in debt recovery this policy does not need any legal change.

Short courses with new certificates

The most newsworthy part of the Easter Sunday announcement was that the government would fund additional short courses at discount fees. These are aimed at people seeking new skills for the post-COVID-19 economy. Tehan said:

This plan will help Australians who have lost their job or are looking to retrain to use their time studying nursing, teaching, counselling, allied health or other areas considered national priorities.

These short courses will be up to four subjects already taught as part of an existing qualification. They can start from May 1, 2020 and must be finished by December 1, 2020.

The existing qualification could be anything from a higher education diploma to a masters degree by coursework, but it is likely universities would focus on graduate certificates and graduate diplomas, which usually take full-time students between six months and a year.

Students can continue on to the full course if it is longer than four subjects, but they will not get discount fees for subsequent subjects.




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Students who finish six months of study will receive what the education department calls a “higher education certificate” and the minister has sometimes called a “diploma certificate”.

Student contributions will be $1,250 for six months study in nursing, teaching, psychology, English, maths, foreign languages or agriculture. They will be $2,500 in allied and other health, IT, architecture and building, science engineering, medical science and environmental studies. In most cases, this is about half what students would normally be charged.

The government says these courses must be online and are only available to new students. There is a strong implication these courses will be restricted to workers displaced by the COVID-19 crisis.

This has legal problems

This idea faces significant legal obstacles.

The government has no current legal power to fund a “higher education certificate” or a “diploma certificate”. So to facilitate funding, the government requires universities to enrol students in a course leading to an existing higher education qualification, even if the student has no plan to finish it.

Encouraging students to leave without a proper qualification goes against the legislation’s policy intent.

Higher education providers have another potential legal problem. The rules around admitting students require course applicants have no “known limitations” that would impede completion. A university marketing made-up certificates that encourage early departure from courses that would otherwise lead to legally-recognised qualifications strikes me as recruiting students with a potential “known limitation”.

Universities should check with the quality regulator before admitting students on this basis.




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Without international students, Australia’s universities will downsize – and some might collapse altogether


The government’s other legal problem is it has no power to cut student contributions. Under the funding legislation, universities set student contributions up to the statutory maximum. So for the cost of the short courses to be “slashed”, the government needs universities to charge less than usual.

Universities will receive the normal tuition subsidy for each student, so this may mean they can still make money from this program. Adding an additional student to an existing online course would usually cost them less than the total funding rate.

But agreeing to a lower student contribution sets a bad precedent, and undermines the program as a way of assisting financially-stricken universities.

Making matters worse, tuition subsidies for diploma certificate students would be offset against the 2020 funding guarantee amounts. Universities with fewer domestic students than expected in December 2019 should not participate in this program, and take the funding guarantee money instead.

There are existing short courses

The short course policy should be postponed. It isn’t going to make a big financial difference to universities. We should think more carefully about whether funding short courses is necessary or desirable, and we should not lightly sanction policies that go against the intent of existing law. If the scheme is worth pursuing, it can be properly legislated later in the year.

If people want to sit out the COVID-19 recession at their study desk they have many options. There are no limits on student numbers in FEE-HELP funded postgraduate courses. There is also already a large market for online short courses. Many of these have the added advantage of costing less than $1,250 or $2,500.The Conversation

Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison has rescued childcare from COVID-19 collapse – but the details are still murky



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Jen Jackson, Victoria University

Prime Minister Scott Morrison has announced free childcare for more than one million families, with a funding boost that aims to keep more than 13,000 childcare services across Australia open.

In doing so, the government has backed its earlier recognition of early childhood education and care being an essential service.

Estimates suggest about 650 early childhood education and care services have already closed in Australia due to falling enrolments.

The government plans to pay 50% of the sector’s revenue up to the existing hourly rate cap, based on the enrolment numbers before parents started withdrawing their children because of the COVID-19 pandemic.

It will only do this so long as services remain open and do not charge families for care.




Read more:
Free child care to help nearly one million families, especially workers in essential services


The funding will apply from April 6 based on the number of children who were in care during the fortnight leading into March 2, whether or not they are attending services.

The plan will cost A$1.6 billion over the coming three months.



What this means

Today’s announcement is a much needed lifeline for the early education and care sector, which was on the brink of collapse.

By last week, drops in occupancy at childcare centres were estimated to be between 15% and 50%.

Normally, the childcare subsidy is paid directly to early childhood services, which then pass it on to families as a fee reduction. Today’s announcement effectively increases the fee reduction to result in zero fees.




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Last month, the government also increased the time families can stay away from childcare without losing their access to subsidies, from 42 days to 62 days. The new plan waives gap fees, so families don’t face costs for keeping children at home.

Previously, families would face fees even when their child was absent from childcare, so services could keep operating. While this made sense in the pre-COVID world, many families discontinued enrolment when they were not sure when their children would return to care.

Federal education minister Dan Tehan said families that discontinued their enrolment since February 17 were encouraged to re-enrol their child:

Re-starting your enrolment will not require you to send your child to child care and it certainly won’t require you to pay a gap fee. Re-starting your enrolment will, however, hold your place for that point in time when things start to normalise, and you are ready to take your child back to their centre.

Finding a place in quality childcare remains a struggle for many Australian families, so support to stay enrolled is a significant benefit.

The funding boost means many centres can stay open and early childhood educators (including the 72% who are part-time or casual workers) will be able to keep working.




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JobKeeper payments will be available for those who cannot keep working. This is welcome respect from government for the importance of these workers, who are risking their health to give children continuity of care.

Where are the gaps?

The announcement caused initial confusion about whether free childcare would apply to all families. Education minister Dan Tehan asked that services prioritise vulnerable families and those who can’t care for their children safely at home.

The Prime Minister said “working parents” would be prioritised, not just those working in the most critical jobs.

Tehan later clarified that the support applies to all families who have an existing relationship with a childcare centre.

While families struggling to care for young children while working from home will welcome this announcement, it still leaves uncertainty about how “prioritisation” will occur.

It is also not clear whether the call for prioritisation was expected to limit the number of families using childcare services, to allow educators to implement strategies like extra cleaning and physical distancing to protect children and staff from infection.

Benefits for children’s learning are also largely missing in the political spin. The Prime Minister is right that “children need as much familiarity and continuity as we can help provide”, but early childhood services do more than provide familiar spaces for children.

When it comes to school education, the global focus has remained on keeping children learning, even for those not at school. But research shows learning is even more important in the early years, so governments also need a plan to support educators and families to keep early education going.




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Another glitch is that Goodstart Early Learning, Australia’s largest early childhood service provider, is technically ineligible for the government support announced so far. The company’s annual revenue is just above the A$1 billion eligibility limit for access to the new package.

Goodstart itself was born from the last major crisis in Australian childcare, when ABC Learning went bankrupt, placing more than 1,000 services at risk of closure. Goodstart, a not-for-profit social enterprise, was created from a consortium of community organisations and government support, to provide a new model of childcare that prioritised learning over profit.

It would be a cruel twist of fate if the solution to the last childcare crisis was left out of the solution to the current one.

Beyond the band-aid

Education minister Dan Tehan has described today’s reforms as “turning off the old system” of childcare funding. When Australia reaches the other side of the crisis, governments will face tough decisions about whether the clunky pre-COVID system – with childcare funding pieced together from a complex mix of government funding and vastly variable fees – should ever be turned back on.

A broken system will crumble to pieces at the first sign of crisis. Australia has seen childcare come close to the brink of collapse twice now in just over a decade. Governments owe it to children and families to never let it happen again.The Conversation

Jen Jackson, Education Policy Lead, Mitchell Institute, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Free child care to help nearly one million families, especially workers in essential services


Michelle Grattan, University of Canberra

The government will provide free child care in a move aimed at ensuring parents, especially in essential services, are able to keep working.

More than 945,000 families with 1.3 million children will benefit.

The new arrangement will scrap, after Sunday, the present funding system – including the means test and the activity test – and instead the government will pay half the sector’s revenue up to the existing hourly rate cap.


CC BY-ND

The plan will cost the government $1.6 billion over three months – compared with $1.3 billion if current revenues and subsidies had continued, based on the existing system and the big reductions in enrolments that have taken place.

The funding will be paid direct to the centres, with the condition they remain open, so parents do not have the disruption of having to seek out another provider. There are some 13,000 childcare and early leaning services. The new arrangements will also extend to after school and school holiday services.

Priorities will be set for access, with the first in line being working parents, vulnerable and disadvantaged children, and parents with existing enrolments.

Centres should “re-engage with those parents who have taken their children out of care, to see whether they can be accommodated as necessary as well,” Education Minister Dan Tehan said.

“But there is a clear priority list that we want centres to take into account, and the most important of those are those essential workers and the vulnerable children.”

Scott Morrison said: “In this ‘new normal’ that we’re living in, it’s no longer about entitlement. It’s about need.

“And we’re calling on all Australians to think about what they need, and to think about the needs of their fellow Australians who may have a greater need when it comes to calling on the many things that are being provided.”

For parents who have removed their children from childcare, centres can waive the gap fee, dating back to March 23.

The payment to centres will start to be made in a week’s time, and will run initially for three months, after which it may be extended.

Morrison and Tehan said in a statement the plan would provide “planning certainty to early childhood education and care services at a time where enrolments and attendance are highly unpredictable”.

Childcare centres can also get assistance under the JobKeeper program announced this week and the cash and loan schemes also available for businesses.

The Australian Childcare Alliance, the peak body for early learning services, welcomed the announcement as “extraordinary”. It said an overnight survey it had done had shown 30% of providers “faced closure this week due to as massive, shock withdrawal of families – either from fear or unemployment – and another 25% were not sure they could ever recover, even once the virus crisis has passed”.

But with the new financial measures , plus the JobKeeper payment and other existing support mechanism the early learning sector should be able to continue to play its essential role, ACA said.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The key to the success of the $130 billion wage subsidy is retrospective paid work


Peter Martin, Crawford School of Public Policy, Australian National University

The secret sauce in the government’s A$130 billion JobKeeper payment is that it will be retrospective, in the best possible way.

It’ll not only go to employers who have suffered losses and had employees on their books tonight, March 30, but to employers who have suffered losses and had workers on their books as far back as March 1.

This means that employers who have sacked (“let go”) of workers at any time in the past month can travel back in time, pay them as if they hadn’t been sacked, and nab the A$1,500 per employee per fortnight payment.

As the official fact sheet puts it, “the JobKeeper Payment will support employers to maintain their connection to their employees”.

This retrospective connection will add new meaning to the term “revision” when the March unemployment numbers are released.

Not only will the March numbers be liable to being revised a month later as is normal in the light of extra information, but many Australians who were unemployed in March will retrospectively turn out not to have been unemployed.

They will have been retrospectively in paid work.




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(And if they have applied for the Centrelink payment of Newstart plus $550 per fortnight, they’ll have to un-apply to avoid what the prime minister referred to as “double counting” rather than the more loaded “double dipping”.)

It gets better. If you have been part-time, or for some other reason on less than $1,500 per fortnight, “your employer must pay you, at a minimum, $1,500 per fortnight, before tax”.

This means you’ll get a pay rise, for the six months the scheme lasts.


The Conversation, CC BY-ND

If you’ve been let go and then retrospectively un-sacked, you are also guaranteed to get at least $1,500 per fortnight, which in that case might be less than you were being paid, but will be more than the $1,115 you would have got on Newstart (which has been renamed JobSeeker Payment).

If you remain employed, and are on more than $1,500 per fortnight, the employer will have to pay you your full regular wage. Employers won’t be able to cut it to $1,500 per fortnight.




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Which jobs are most at risk from the coronavirus shutdown? 


To get it, most employers will have to have suffered a 30% decline in their turnover relative to a comparable period a year ago. Big employers (turnover of $1 billion or more) will have to have suffered a 50% decline. Big banks won’t be eligible.

Self-employed Australians will also be eligible where they have suffered or
expect to suffer a 30% decline in turnover. Among these will be musicians and performers out of work because large gatherings have been cancelled.

Half the Australian workforce

The payment isn’t perfect. It will only be paid in respect of wages from March 30, and the money won’t be handed over until the start of May – the Tax Office systems can’t work any faster – but it will provide more support than almost anyone expected.

It’s scope is apparent when you consider the size of Australia’s workforce.

Before the coronavirus hit in February, 13 million of Australia’s 25 million residents were in jobs. This payment will go to six million of them.




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Without putting too fine a point on it, for the next six months, the government will be the paymaster to almost half the Australian workforce.

Announcing the payment, Prime Minister Scott Morrison said unprecedented times called for unprecedented action. He said the payment was more generous than New Zealand’s, broader than Britain’s, and more comprehensive than Canada’s, claims about which there is dispute.

But for Australia, it is completely without precedent.The Conversation

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

$1500 a fortnight JobKeeper wage subsidy in massive $130 billion program


Michelle Grattan, University of Canberra

The Morrison government will provide a flat $1,500 a fortnight JobKeeper payment per employee for businesses to retain or rehire nearly six million workers, in a massive $130 billion six-month wage subsidy scheme to limit the economic devastation caused by the coronavirus.

Describing the initiative as “unprecedented action” for “unprecedented times”, Prime Minister Scott Morrison said this was a “uniquely Australian” solution to keep enterprises and their workers connected through to “the other side” of the crisis.

He said no Australian government had never made such a decision “and I hope and pray they never have to again.”


The Conversation, CC BY-ND

The payment, made through the tax system, applies for workers of large, medium and small enterprises, and not-for-profits. It will start flowing from May 1, but will be backdated to March 30.

Workers who have already lost their jobs will be eligible if they were on the enterprise’s books on March 1, and are re-engaged.

It will be a flat rate for all those eligible, who include full-time, part-time, and casual workers (provided they have been with their employer for a year). Self-employed individuals will also be eligible.

The payment is about 70% of the national median wage. For workers in the accommodation, hospitality and retail sectors – sectors hardest hit by the crisis – it will equate to a full median replacement wage.

To be eligible, enterprises with an annual turnover of less than $1 billion must have lost at least 30% of their revenue after March 1 over a minimum of a month-long period.

For businesses with turnovers of more than $1 billion the reduction in revenue has to be at least 50%.

Where workers have already lost their jobs, they can be rehired by their employer, provided they were attached to the enterprise on March 1.

This will mean some people who have applied for a Centrelink payment will reconnect with their firm and will move to the JobKeeper payment.

Morrison and Treasurer Josh Frydenberg announced the scheme at 4 pm and almost 8000 businesses had registered by 5 pm.

The $1,500 a fortnight will be paid whether the employee is working (in the case of an enterprise still operating) or not (if the business is not trading).

Businesses that keep operating will have to pay each employee at least the $1,500, but there will be discretion about what’s paid above that.

The $130 billion JobKeeper scheme is the third tranche of emergency assistance the government has unveiled since March 12.

“This is about keeping the connection between the employer and the employee and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months,” Morrison said.

“We will give millions of eligible businesses and their workers a lifeline to not only get through this crisis, but bounce back together on the other side,” he said.

The latest initiative brings the total support made available in the crisis to $320 billion, including $90 billion assistance from the Reserve Bank. The total amounts to the equivalent of 16.4% of GDP.

Frydenberg said Australia was “about the go through one of the toughest times in its history”. The government had doubled the welfare safety net and now had gone even further, he said.

Business welcomed the scheme. The Australian Chamber of Commerce and Industry said it was a “game changer”.

The Business Council of Australia said the government had “made the right choice to work through the systems we already have in place to get assistance where it is needed as soon as possible.”

But ACTU secretary, Sally McManus, expressed concern that $1500 a fornight might not be enough. She said the full median wage of $1,375 a week “is what is needed”.

The government is also temporarily liberalising access to income support. The JobSeeker payment has been subject to a partner income test of about $48,000. This is being temporarily relaxed so an eligible person can receive the JobSeeker payment and the associated new Coronavirus supplement of $550 a fortnight provided their partner earns less than $79,762 a year

In other coronavirus developments on Monday, Victoria announced it had moved to “stage 3” of the response to the crisis, with the two-person restriction on gatherings to become legally enforceable.

The two-person rule was announced by Morrison on Sunday but it was left up to the states to decide whether to make it enforceable.

Victorian Premier Daniel Andrews said: “If you are having friends over for dinner or friends over for drinks that are not members of your household, then you are breaking the law”.

“You face an on-the-spot fine of more than $1,600”.

NSW is also announced it will enforce the rule.

Queensland, which has closed its border, is toughening border controls.

Federal Deputy Chief Medical Officer Paul Kelly flagged modelling the government is using in its response will be made available later this week. Morrison has faced pressure for the modelling’s release.

Kelly told a news conference he had asked his staff “to organise a meeting later this week where the modelling and the epidemiology and the public health response will be unlocked, and people will be able to ask questions about that.

“I think we have been quite open with components of the modelling, but I respect that there is a large number of ways that modelling can be done, and so we need to be more transparent, and we will be.”The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Government’s new $66 billion package will take coronavirus economic life support to $189 billion


Michelle Grattan, University of Canberra

Small and medium-sized businesses will get up to $100,000 in cash payments in the government’s second stage of emergency assistance, worth a huge $66 billion, to cushion businesses and individuals as the coronavirus cuts a swathe through Australia’s economy.

The package, to be announced Sunday, will bring to a massive $189 billion the official injection of cash and credit to prop up businesses, protect jobs where possible and assist those whose jobs can’t be saved as well as welfare recipients and low income earners.

It is equivalent to a whopping 9.7% of GDP. This compares with Canada’s stimulus of 4.5% of GDP; Hong Kong’s 4.5%, and South Korea’s 4%.

The $189 billion includes the government’s initial $17.6 billion stimulus package – dwarfed by its successor – and $105 billion in credit measures from the Reserve Bank and the government announced last Thursday.




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With the Australian COVID-19 tally of cases above 1000, the government is already flagging there will need to be a third package as the economy spirals down in the wake of the sweeping measures to try to contain the virus’s spread. The restrictions are expected to become tougher in coming days and weeks.

The second stage package includes, apart from the wage subsidy, a loans guarantee to help keep enterprises operating. It also contains extensive income support and other measures, details of which are not yet available.

The tax free cash payment of up to $100,000 will be available to businesses with turnovers below $50 million and also to eligible not-for-profit charities.

It will cost $25.2 billion. In its first package, the government announced a cash payment equal to 50% of tax withheld, up to $25,000 in payments and with a minimum of $2000. That was worth $6.7 billion, making the combined total of the two $31.9 billion.

Under the latest measure, a business will get a payment equal to 100% of the tax it withholds from its workers’ wages, up to a maximum of $100,000.

Eligible businesses will be able to get a minimum $20,000 even if they are not required to withhold tax.

The government estimates about 690,000 businesses, employing about 7.8 million people, will he helped, as well as some 30,000 not-for-profit enterprises.

The measure is front-end loaded, to get the assistance flowing as soon as possible.

The government will also announce a “coronavirus SME guarantee scheme” for small and medium-sized businesses. This is to complement the $8 billion in measures the banks announced last week to defer small business loan repayments for six months.




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The federal government will guarantee 50% through the participating bank of an eligible loan to a small or medium-sized business hit by the impact of the virus. The $20 billion government guarantee will be able to support lending of $40 billion to these enterprises.

Loans will be used for working capital and be unsecured. The guarantee will cover loans granted within six months, from April 1. It will apply to new or existing customers of banks and non-bank lenders.

Lenders will not be charged a fee for accessing the scheme, and it will be repayment-free for six months. The maximum loan will be $250,000, for a term of up to three years.

The scheme will not apply to re-financing present customers – they will benefit from the banks’ announcement of last week.

Scott Morrison was blunt about how bad things will get. “We’re already seeing the devastating economic impact coronavirus is having for Australia’s local businesses. Unfortunately it is going to get worse before it gets better, but it will get better.

“Many of our restaurants and bars, our hotels and tourism operators, our hairdressers and beauty salons and our events companies already feeling the brunt of the economic impact of coronavirus. This is about finding a way for them and their workers to build a bridge to the other side of this crisis,” he said.

“There is a lot of pain coming but we’re going to cushion the blow as best we can.

“We want to help businesses keep going as best they can or to pause instead of falling apart,” he said.

“In the event that someone does regrettably lose their job because of the coronavirus, it’s very important that business give their workers the confidence that this is just temporary, and that when they reopen their doors and get back to business that they will want to get them back on the payroll as soon as possible.”

“Australia’s small and medium businesses are the engine room of our economy. When they hurt, we all hurt.

“The plan we’re rolling out is focused on building a bridge for as many of those businesses and their workers as we can to get them over this crisis. That means supporting wages for small businesses so they don’t need to let go of their staff and ensuring that during the crisis small businesses know we have their backs on their bank loans,” Morrison said.




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Treasurer Josh Frydenberg said: “These are extraordinary times requiring extraordinary measures”.

Victoria has just announced a $1.7 billion assistance package for businesses.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Morrison’s coronavirus package is a good start, but he’ll probably have to spend more


Peter Martin, Crawford School of Public Policy, Australian National University

What makes the prime minister confident most households will spend A$750 delivered in cash, when they mostly wouldn’t spend the A$1,080 delivered in the form of bonus tax refunds after last year’s budget?

Experience.

Here’s how he put it on Thursday, announcing the economic response to the coronavirus:

Australians will be getting a cheque for $750. Now it’s not for us to tell those Australians how to spend their money, but what we do know from experience is that they will spend that money, and that money will encourage economic activity.

That experience was Labor’s.

On October 11, 2008, Labor announced cash payments totalling between $1,000 and $1,400 per eligible household to stave off a retail recession.

It offered still more in February 2009.




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The first cheques went out in December. Spending surged 4% that month after scarcely growing all year. A year on, spending was 5.4% higher than before the cheques went out.

In Japan, the United States, Canada and Germany where stimulus packages were not targeted at consumers, retail spending slipped by 2-3%. In Australia, it surged 5%.

So big was the effect that the payments were staggered by region to ensure cash delivery trucks could top up the automatic teller machines first.

The statisticians collecting retail sales data at the Bureau of Statistics abandoned their usual practice and stopped drawing a trend line.

The jump was impossible to reconcile with the pre-existing trend.


ABS retail trade release, May 2009

The Treasury had searched the economic literature and determined that cash payments were more likely to be spent than tax cuts, and could be delivered much more quickly.

Six million Australians receive government benefits of some sort, whether they think of themselves as on welfare or not. As recipients of family allowance, childcare support, the pension or even the seniors health card, they are on Centrelink’s books. (Centrelink recently changed its name to Services Australia.)

The payment machine that delivered robodebt can just as easily deliver “robocheques”.




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Treasury Secretary Steven Kennedy, who advised Prime Minister Scott Morrison and Treasurer Josh Frydenberg to give households cash this time instead of tax refunds, saw the effect at first hand. He was working in Prime Minister Kevin Rudd’s office as the good news came through.

If there is an important criticism of the Morrison government’s (first) coronavirus stimulus package, it would be that it doesn’t concentrate on households enough.

Household spending accounts for 55% of Australia’s gross domestic product, yet payments directed to households make up only 27% of the $17.6 billion the government is spending.

The package has two primary aims. One is to ensure that spending and production don’t shrink in the June quarter after shrinking in the March quarter, triggering what, for better or worse, people call a technical recession.

The Treasury expects it to boost economic activity by 1.5% in the June quarter.

If it does, it should be enough to compensate for the downturn we would have without it, always remembering that we don’t yet know how bad things will get in the three months to June – how many schools and public gathering places will be closed, and how many workers will have to stay home to care for children who can’t go to school or family members who are ill.




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The second aim is to stop the unemployment rate climbing. When it climbs more than a few points it tends to keep going. In the early 1990s recession it climbed from 6% to 10% in a matter of months.

People who entered the labour force and couldn’t get work were scarred for years.

Labor’s most enduring achievement during the global financial crisis in 2008 and 2009 was to stop unemployment climbing above 6%.

That’s what the government’s $11.8 billion of payments to businesses are aimed at, whether delivered in the form of a boosted instant asset writeoff (available only until June 30), accelerated depreciation, payments to cover salaries, or wage assistance for apprentices and trainees.

Morrison wants businesses in the best possible position to hold onto their workers. He wants them to display “patriotism”.The Conversation

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.