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Budget Cockups in the Time of Coronavirus: Reporting Errors and Australia’s JobKeeper Scheme

Hell has, in its raging fires, ringside seats for those who like their spreadsheets. The seating, already peopled by those from human resources, white collar criminals and accountants, becomes toastier for those who make errors with those spreadsheets. Even in their self-celebrated expertise, blunders will happen.

Few errors are as magisterial as that of the Australian government’s on JobKeeper. In funding its job preservation scheme to cushion the shock of losses occasioned by the coronavirus pandemic, a miscalculation on the number of employees who should have been covered was revealed. The initial coverage was ambitious: 6.5 million employees. Treasury and the Australian Tax Office have now revised the figure, effectively halving it. The “reporting error” occurred with respect to 1,000 business applications, a drop-in-the-ocean of 910,000 businesses who had put their names to the scheme. A mind boggling $130 billion has been shaved and will now cost $70 billion. Any comparisons on generosity – for instance, with the United Kingdom’s Coronavirus Job Retention Scheme – were invalidated.

Not that the scheme was that generous to begin with. Anthony Forsyth, a sharply taloned legal eagle, teased out a few compromising details when the scheme was announced. “Australia’s payment is 70% of the median wage. The government’s claim that employees in retail and hospitality will get the median wage in those industries simply reinforces their low-paid status to begin with.” Numerous other groups were also sidestepped with callous budgetary acumen. Casual workers unable to show a period of employment of a year were simply ignored. This knocked out the university sector, one increasingly rapacious in the way it uses such labour. Ditto migrant workers or those on certain visas, the bread and butter recruitment for many small businesses.

The problem with such cockups is the opportunity they present. More money to spend, surely a good bit of news. But what on? Those purposely excluded from the program might well be included now. The original purpose of the initiative might be reiterated. This is certainly the position taken by various state governments, including Tasmania’s Liberal Premier, Peter Gutwein, and the Labor Chief Minister of the Northern Territory, Michael Gunner. According to Gunner, “if we can keep JobKeeper for longer, we should.  Industries like tourism and hospitality have been hit hard, so if it needs to be targeted, let’s make sure we look after them.”

The misers in treasury will obviously wish it to be kept in the coffers, sugar coating the message that things are not as dire as all that. No need to spend that much; besides, all of this represents a glorious saving. As the ABC put it, “The JobKeeper bungle now means the Federal Government is essentially $60 billion richer, which is good news for the budget’s bottom line.” This is all well and good for handbag economics, which focuses on the fiction that government expenditure somehow resembles the old housewife’s weekly expenses. In a sophisticated world of Keynesian stimulus and necessarily invigorating injections to lift expectations, retaining such money is a sin. But it is a sin the Morrison government is keen on committing.

Instead of seeking scalps and culprits to crucify, the optimists abound. The savings will, according to Danielle Wood from the Grattan Institute, “mean the deficit is probably a bit smaller than we expected it to be.” Assistant Treasurer Michael Sukkar was enthused by a chance to give incompetence a distracting gloss. “In the end, what it means is our country is less indebted than it otherwise would be. This is all borrowed money; there’s not a pot of money that we have sitting aside waiting to be spent on programs like this.” His superior, Josh Frydenberg, celebrated the “welcome news that the impact on the public purse from the program will not be as great as initially estimated.”

Frydenberg has shown little interest in seeking a reallocation. There were no villains in the affair, no one set for the chopping block. “This is a very uncertain time. I’m not blaming Treasury’ I’m not blaming the ATO. No underpayments were made, no overpayments were made.” Such statements merely underline the manic myopia that governs decision making, even during the most debilitating of crises.

Pop the corks, people, though Warren Hogan, formerly of the Treasury, is not convinced that any champagne be taken off the ice. “There isn’t a sporting analogy for how big a miss this was.” That size intrigued Federal Labor leader Anthony Albanese, who took to the cosmos for his comparisons. “This is a mistake you could have seen from space.”

Opposition Senate leader Penny Wong is also scouring the record for answers. Her main target of interest: Treasurer Frydenberg, who had not, as yet “fronted up and taken responsibility.” The Senate Committee into the COVID-19 response will, in due course, press the treasurer for some explanation, but he is bound to be in the pink, excited that he has more cash to play with.

Such are the times that incompetence over such matters, however monumental, will not lead to sackings, demotions or any measure of retribution. The flames of hell are yet to come; in the meantime, there is a resounding cheer coming from the Treasury. All that cash, and no initiative to spend it. Things are really looking up.

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10 comments

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  1. Phil Pryor

    SO, a huge arseup, publicised, of a mere Sixty Billion Dollars from a government with all ten fingers per boofhead up their claggy cloacas.., how can any world government be so far wrong, out, ridiculous, stupid, careless, incompetent??? Only this tribe of turds could do it, the Puerile Moron ( you add the ris in the middle) the Piltdown Man, the Preposterous MUG!!! We are the last laugh of any nation’s readers, listeners, professionals, media, honest hard working governments, a totally idiotic spectacle, which does NOT cover urgent actions needed now to make life bearable for the unfortunate. Superstitious idiots should see J M Keynes as a real deity.

  2. Matters Not

    Entertain the thought that the now anorexic deep state is taking its revenge. (After all, everyone has a conspiracy theory these days. It’s the new black.)

    Or perhaps the public service wasn’t asked for advice? Indeed, rather rare that they are escaping blame. Maybe the ‘source’ was a ministerial office?

  3. New England Cocky

    Now Phil Pryor … you know that the strategy is to build the worst third world export economy in the oECD so that the African national that presently hold this title can say with confidence, “the foreign owned European and American multinational corporations are doing over White Australia so they are not racist … they just do not want the local population benefitting from the riches created by their now natural resources”.

    @MN: Tell me MN, is there any smidgeon of the Hawke Keating Commonwealth Public Service remainig in existence, or did Little Johnnie Howard, the great wrecker, sell off all the functions of government to his Big Four accountancy mates to save government expenditure on public servant wages, superannuation and other costs?

  4. Phil Pryor

    Hey Cocky (no scratch) Having shared classes with Jack Howard, (the stirrer and egofixated friendless self producing one man show widely laughed at..,) I’d suggest that he did what you say, leaving a trend, a philosophy of no Public Service, as you couldn’t buy them, shoot them, trust them, understand them, to do the work of essential national importance and relevance for which they were traditionally bound. So defective, empty, lying, deceiving, bone ignorant, superstitiouisly inadequate, Howard was our worst Treasurer (we failed general maths in one exam) and useless at economics. Old teacher Ernie Pillans laughed at Howard’s hopelessisms. We are bound to finish up, if conservatism rattles on, as a pocked, scraped, denuded land of mining cracks and craters, with eroded and bare lands after endless abuses in grazing and rapacious land practices. Brainless Hunnishness (thanks William the murderikng conqueror and Cromwell the child slaughterer) brought here in the invasive imperialism of post 1788 will certainly ruin the nation.

  5. New England Cocky

    Phil Pryor, you survived a class with Little Johnnie Howard, the scourge of North Shore non-smoking suburban train carriages, without becoming infected with his egomania and self centred narcissism?? I tips me lid to you!!

    Failing General Mathematics and being abysmal in Economics would surely make him the ideal candidate for Liarbral Treasurer and COALition Prim Monster.

    Now, are you sure that you have said all that is necessary on this topic??

  6. Zathras

    It’s amazing that this blunder was allegedly the result of some employers incorrectly filling out forms, considering the expected cost of the stimulus had been publicly announced a number of weeks before the JobKeeper application forms were even made available.

    It looks like another case of blame-shifting and diversion.

    If this was the work of Wayne Swan and the ALP the treasurer would have already been crucified, burned and buried by the media.
    It’s as bad as a project coming in $60billion above estimates.

  7. Doctor Duck

    It’s official !
    Casuals are un-Australian, even untermensch. Not worthy of support despite the billions on hand.
    Thank you for your taxes and maybe for enlisting in the ADF but the Government has decided against you; no reason given.
    Remember this at election time.

  8. DrakeN

    Jobkeeper was always intended to primarily benefit employers and the temporary increase in Jobseeker a sop to those newly out of work so as not to antagonise them with the reality of the plight of those on long term unemployment benefits.
    When/if itall reverts to normality in September, then those, who for the first remain on the benefit in the longer term, will experience the punishing regime of the jobs market and might be woken by sheer hunger into the realisation that this government exists, not for them, but for the benefit of themselves and their mates.

  9. B Sullivan

    Zathras, how many workers would 1000 employers have to mistakenly claim for in order to account for the $60 billion cockup?

    I did the maths.

    $60,000,000,000 divided by 1500 (the erroneous claim entered per worker) gives us 40,000,000.
    Divide 40,000,000 by 13 (the number of fortnights covered by Jobkeeper) and the result gives you 3.07 million workers mistakenly reported by just 1000 employers.

    It is indeed as you say, an amazing coincidence, that the expected cost of Jobkeeper, announced by the government before the forms were even printed, was based on an over estimated number of 3 million workers needing to be covered.

    Perhaps the government’s over estimation of the number of claims was an honest mistake. Perhaps the 1000 employers who entered a claim of 1500 for each worker were also making honest mistakes. It is just incredible that the cost of the 1000 employers’ collective mistake exactly matches the government’s over prediction of the cost of Jobkeeper.

  10. RomeoCharlie29

    The sheer, uncaring arrogance of Morrison, Friedanegg, Cormann et al towards the millions who have been deliberately excluded from Jobkeeper is galling to say the least. I too marvelled at the ABC’s interpretation of the underspend as some sort of savings. If the mugs leading us don’t use this opportunity to widen the net to include those who have missed out, and we must remember it is their policies of casualising the workforce that contributed, then we must remember it at election time. I am sick of hearing or reading the shit about what a good job Morrison has done handling the pandemic. All his public utterances confirm that on the economics he has been dragged kicking and screaming to this point, but is totally not averse to claiming the credit. He even cops the responsibility for the $60bn over-estimate (obviously thinking we proles will applaud his “savings”). So please, remember this at the election.

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