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Is Morrison’s Pink-Batts Moment Coming?

Will the federal JobKeeper Allowance become Scott Morrison’s pink-batts/school-halls’ experience? It’s starting to look that way, even at this early stage.

Just to recap, when Kevin Rudd decided to “go early, go hard, go households” in response to the looming threat of a worldwide economic collapse (aka the GFC), he followed it up with a multi-billion dollar job creation program to have every house in the country supplied with roof insulation.

On the face of it, a great idea.

In addition, he introduced the “Building the Education Revolution” (BER) program, a massive schools’ upgrade, involving the construction of school halls, basketball stadiums, libraries and classes, projects that would, over the long term, have been on their radar, anyway.

Another great idea.

However, it wasn’t long before the school halls program began attracting a great deal of political criticism from the conservative Opposition and the Murdoch media who claimed there had been wholesale rorting and cost blow-outs. For the Opposition, it was like a dream come true. They hated the whole idea of a stimulus in the first place.

Feigning concern about excessive spending and budget deficits that were the product of the GFC stimulus initiatives, the leader of the Opposition, Tony Abbott, called for a judicial hearing into the BER and claimed it, and the home insulation initiative, were failed programs and a waste of money.

Despite Primary Schools being provided with new and refurbished halls, libraries and classrooms as well as new and refurbished science laboratories and language learning centres, it was the cost of these programs that became the focal point.

Never mind the provision of new and refurbished covered outdoor learning areas, shade structures, sporting facilities and other environmental programs, all of which represented ongoing benefits to our childrens’ education, the opportunity to gain political points from a perceived rort, was too great a gift for the Opposition to ignore.

The reality was that the insulation program covered 1.2 million homes which had, by 2015, produced savings of approximately 20,000 gigawatt-hours (72,000 TJ) of electricity and 25 petajoules (6.9×109 kWh) of natural gas. But this was of little interest to the Coalition partners.

Their interest focussed on the tragic loss of life of four workers, accidentally electrocuted, while they were installing the batts. It was this tragedy that the Opposition and the media sought to magnify, purely to discredit the government and gain political advantage.

Notwithstanding the benefits to the economy, particularly in the area of employment, the ongoing reduction of greenhouse gas emissions and being able to avoid a recession, the political outcry from the Opposition and the media, over the four deaths and anecdotal evidence of rorting, was unrelenting.

The Rudd government subsequently suffered a drop in popularity and a perceived mis-management of the economy.

Since then, under intense media attack, the Labor party has been cast as responsible for all ongoing budget deficits (aka, the debt and deficit disaster), while the Liberal/National Coalition has enjoyed the confidence of the media and a deceived public, in matters of financial management, despite the reverse being the reality.

As they say in politics, that’s politics.

Now, however, it seems some comeuppance is on the horizon.

In response to the Covid-19 pandemic, the Coalition government, led by Scott Morrison, has unleashed a stimulus spending program that is five times greater than anything the Labor party did between 2007-2013.

To grasp the significance of this 2020 cash splash, one needs to remember that at the point when the Coalition became the government in 2013, the national gross debt was $278 billion. Seven years later, under Coalition management, it has ballooned out to $607 billion.

But that is just the start. Planned stimulus spending over the next two years will see it climb to, $800 billion. A large part of this spending ($130 billion), will be allocated to the JobKeeper program, an ambitious attempt to forestall a massive increase in unemployment, estimated now, to exceed 10% by the end of June.

Treasurer Josh Frydenberg has claimed that without JobKeeper, the unemployment level could be as high as 15%. And he’s probably right. It is, therefore, an alternative unemployment support program.

The JobKeeper program provides businesses who have suffered a 30% loss of turnover caused by the Covid-19 lockdown, a payment of $1500 per fortnight, per employee, so long as those businesses retain those workers in employment.

There are, however, some interesting side issues in play.

The employees are supposed to receive the $1500 even if they weren’t being paid that much in the first place. The government has already been forced to amend the rules to exclude 16 and 17 year old full-time students who were only working part time. Some, in this category have already made a killing and won’t be asked to return any money already received.

So that raises a number of questions, namely: will businesses pass on the full amount if that is more than they were paying employees? And, will businesses make up the difference between what the government gives them and whatever they were paying their staff, if it was more?

Will they continue to pay superannuation and penalty rates as required? Will their workers continue to accrue annual leave if they were stood down?

One should never underestimate the cunning of those who would see an opportunity to rort the system just as they did with the school halls program. In this case, the temptation to manufacture a few phantom staff will be, for some, irresistible. For others, just claiming the money for those who were never likely to be laid off, will be very tempting.

For a government who have grittingly put their ideology to one side, for the better good, the shock of it all might prove too much to manage. They have so far surrendered any future criticism of Labor’s spending record. They are gearing up to post a huge budget deficit for 2019/20, and worse, the biggest budget deficits in history for the fiscal years, 2020/21 and 2021/2022.

Now they face a very real rorting scenario. One senses that budget deficits will be small change compared with what history tells us is a sure bet.

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22 comments

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  1. Kronomex

    I think Scotty from Marketing will be forced to raise unemplyment benefits because of a (maybe, unless the main sleaze media can find some way to whitewash it over and continue to portray Messiah Morriscum as the saviour of the country) big backlash at the next elections from those who have the most to lose.

    “Treasurer Josh Frydenberg has claimed that without JobKeeper, the unemployment level could be as high as 15%.” I think it’s already at 15%, if not higher, but with the continual use of the Magic Wand of Rubbery Figures and Seasonal Adjustment the LNP can keep right on lying about how wonderful a job they aren’t…oops, are doing.

    Anyway they will just fall back on their favourite mantra, “It’s all…”

  2. Jack Cade

    Any ‘rorts’ done in any of Rudd’s initiatives were done by the very bodies that the LNP represents. The Pink Batts debacle was not due to the scheme but due to the rapacious contractors using cheap, inexperienced labor. Moreover, there were more deaths of insulation installers during any of the Howard years; the only difference was that the government didn’t sponsor the work, but the noxious Newscorp chose not to admit it. And Morrison’s ‘pink batts’ moment will just slip under the radar of The Australian or The Toiletgraph.

  3. Keitha Granville

    Of course it will rorted, there are always people and businesses who will exploit any possible chance of free money.

    It would have been so much simpler to pay everyone through the ATO, leave out the employers. Everyone could have received a wage similar to Workers Comp. For those still at work, they would have simply continued to be paid by their employer, for those laid off because the business was shut down the payment scheme through the ATO. Whatever people were earning last year averaged, perfectly fair whether they were full time, part time or casual according to their last tax return. No rorting possible.

    This Jobkeeper system is relying on honesty. We all know where that might lead.

  4. Kaye Lee

    “It ought to have been obvious to any competent administration that the injection of a large amount of money into an industry that was largely ‘unregulated’ would carry the risk of rorting and other unscrupulous behaviour.”

    Ummmm…..politics anyone?

    Scotty from marketing and the work experience treasurer are pushing more deregulation – less red tape, less green tape – as part of their snap back. That should go well.

  5. Vikingduk

    According to an SMH report, the workers on this jobkeeper bullshit are still paying tax at the same rate. One anonymous worker showed reporters his wage slip showing he had been taxed near 40% of his $1500 fortnightly pay packet. As he said, $450 a week doesn’t cover his commitments. As always, really pays to read the fine print especially when it comes to this travesty of a government showing largesse. Give with one paw whilst grabbing back with both. The announcement is all for this bunch of scum suckers with an absolute guarantee that the implementation will be further proof of their outright incompetence and greed.

    But still, it’s all heil the messiah from the shire, giving this shitbag ample opportunity to exercise The Smirk. I’ve heard he maybe trying formaldehyde injections into his cheek muscles to attempt to control his go to expression. Good old Scotty and donny dumpster, saving the world, two stable geniuses oozing through life, certain of their infallibility, aren’t we so very fortunate we have such supreme arseholes caring for us.

  6. JudithW

    It will also be interesting to see the timeline for the jobseeker payment increase which was initially 6 months, then until September which is only 4 months since inception.
    BTW Jobseekers have yet to see This increase because it was paid FROM April 27th so will not be paid in full until 2 weeks after that date.
    The devil is n the detail.

  7. pierre wilkinson

    still to this day people are convinced that the pink batts scheme and the BER were flawed projects despite the facts suggesting the contrary view
    but how can you compete when lies and obfuscation trump facts and honesty in today’s media?

  8. Matters Not

    Not too long ago, Morrison told the Heads of the Public Service that their role was limited to ‘implementation’ of what the governments wanted and not ‘policy’ development. How quickly things change. The brains behind this economic response is Head of Treasury Steven Kennedy who did his ‘crisis’ apprenticeships during the Henry/Rudd years while the health response is driven by medical professionals who are also from the Public Service – both State and Federal.

    One suspects, nevertheless, that as things improve Morrison’s original dictum will again become the ‘common sense’ of his government. At least until the next high hurdle causes another reawakening.

  9. Matters Not

    MT – feats of intellectual gymnastics, particularly the back flips, are wonders to behold. The so-called virtues of small government – now displaced by the necessities of big government. From LNP members complaining about too much government in their lives – from the beetrooter himself no less – to a mad scramble so that their constituents will not be left behind. Today everyone’s a socialist of sorts – even if they have no understanding of the concept.

    And all it took was a virus so tiny it is invisible to the naked eye. Can’t wait for the really big ideas to enter – stage left of course.

  10. Kerri

    As my husband said of the COVIDSAFE app, the one thing for sure is….. they’ll stuff it up!

  11. Michael Taylor

    Kerri, tell you’re husband that he’s right. 😀

  12. Ken McKinlay

    Kaye Lee, ‘work experience treasurer’, brilliantly accurate as well as amusing

  13. Kathryn

    At least the stimulus package under the Rudd/Gillard governments have something to show for the massive injection of taxpayer funds in the way of new science labs, school halls, libraries, refurbished classrooms, solar panels etc etc … What have the LNP government got after months of throwing our taxpayer funds around in a frenzy of misguided, unplanned extravagance? ABSOLUTELY NOTHING!

    Once again, and again, and again it is crystal clear that everything the LNP says is a bald faced lie and absolutely EVERYTHING, the LNP touch turns to shit in record time! The only “good” policies the incompetent idiots in the LNP have ever had were those ideas “stolen” from the ALP. Isn’t it rather ironic that in times of peril, in these worrying apocalyptic times, the lying neoliberal capitalistic hypocrites in the LNP forego the failed policies of Trickle Down economics in preference to initiatives that have their basis in SOCIALISM in their attempts to put things right?

  14. Peter F

    I downloaded the covidsafe app, but have left it switched off. It is nearly 2km up to our front gate, and I have been out that gate three times since ‘lockdown’. Still, the government can crow about the success of their system. I have it for when things get worse once ‘freedom’ is restored.

    On the subject of the BER, our town had two school halls built under contract by the same builder. The difference in contract sum was less than 20% of the lower price. The buildings were some 50% different in size. Guess which one was built under the control of the LNP state government, and which by private contract under professional management.

    Still, the ALP got the blame for ‘rorts’.

  15. guest

    Jack Cade,

    You are quite right about the rorts perpetrated in the unregulated industry that was home insulation during the early days of the BER. To be more specific about the unfortunate four deaths, two died from heat exhaustion, one died from a fault made by another installer and one died using a stapler after staplers had been banned. Clearly there was lack of supervision. Then there were fly-by-nighters who scammed the unwary.

    So who took the money for overpriced items? And why was it that so many schools did not have all of the structural items one would expect to find in a well-fitted school?

    We could well ask what will be the scams arising in the present response to COVID-19.

    Today, Janet Albrechtsen of the Ideologically driven IPA is raising some questions herself.

    She says this: “Given the young will inherit the consequences, good and bad, of the Morrison government’s response to the COVID-19 pandemic, their cries ought to carry greater weight than they have so far.”

    Albrechtsen is writing after a poll taken about the lock down. The result is not surprising, because there are young people saying they want to get back to work. No surprise there. We are all in this together, are we not? But Albrechtsen is pleading a special case for young people. remember how she was upset that a young right-wing group at a university was unable to spruik right-wing propaganda – things young people would not have heard at school or at university – for procedural reasons.And besides that, she is not happy with this socialist-style approach taken by Morrison’s government (‘the bad’?)

    She goes on with an attack on the ABC: “…the tax-payer funded media giant caters to a small clique of privileged baby boomers. In a snub to younger Australians, the ABC has flatly refused to host the kind of debate one hears every day at the BBC about the economic, mental, physical and other health costs of shutting down the economy.”

    It seems that Janet has been listening too much to the BBC and has not heard that the ABC – on The Drum, for example – has been talking exactly about about those things and to an audience comprising more than ‘a small clique of privileged baby boomers’.’Refused’ which demand?

    By Albrechtsen is full of optimism that IPA ideology will prevail. She says: “The government ha a good opportunity here by making job creation for young Australians its focus, by explaining day in, day out that industrial relation reforms, cutting red tape and green tape, fixing job-killing planning laws and broader tax reform are all pro-youth policies.”

    Are not those things – a laissez-faire legal system, lack of regulations of multiple kinds, and reduced taxes for the rich – just the very kind of things which have driven the neo-liberal capitalist rorts for wealth and unlimited growth – those very things which have created the dire threats of climate change?

    Perhaps Albrechtsen could ask the young, who have to face the dire threats of climate change over the next century, whether they are entirely happy with the brazen denialism of the IPA and lack of real climate policy from the Morrison government.

  16. Pagnol

    Is Skiddy’s Pink-Batts Moment Coming? I hope so. He deserves nothing less.

  17. John

    I run my own business and despite a 10 day holiday in March being extended by 2 weeks in home isolation the business turnover for March and April was 45% more than the same period last year. I rarely worry about turnover as my work comes in cycles and fluctuates due to weather and many other factors. But when I checked my bank balance late last week my account balance was much higher than expected, a quick check revealed $10,000 deposit from the ATO with no explanation.

    A few phone calls resulted in advice later that day confirming it was a legitimate payment because of Covid-19. I find it hard to believe they are handing out money to business for the sake of it and the advice I received was that I will get $10,000 after I submit the next 2 GST returns. So I checked my financials as mentioned above to see if there was anything that would justify or indicate any needs for the government to give me $30k tax free.

    It is my understanding everyone with an ABN receives this money just because they have an ABN and there is no criteria to be met. I think it is utter bullshit for any government to hand out so much money without receiving anything in return and I wonder how, when or where they will expect it to be repaid. My $10 is locked away in a fixed deposit so I won’t have to worry when they do want it back and the next 2 payments will be put aside as well.

    If this handout is not mis-management of public funds I better find a good drug dealer.

  18. leefe

    “It is my understanding everyone with an ABN receives this money just because they have an ABN and there is no criteria to be met.”

    I have an ABN (a necessity to receive a one-off payment for the use of a photograph on a book cover). No $10,000 payout from the ATO yet. Do I have to file a blank GST return first?

  19. Jean

    I have enjoyed reading the comments on this article – and remembering the reaction to the GFC! In the end, less than 2% of schools were unhappy with their new buildings!
    The pink batts did have the sad loss of 4 lives, which were used politically in trying to blame the ALP at the time. The employers of those young people should have been charged (were they?) Where was their duty of care! But then so many of the pink batt businesses later complained because the were left with enormous quantities of the batts, when the scheme was so successful, so quickly, that the scheme was ended sooner than expected – perhaps some karma?
    When Julia Gillard / Kevin Rudd handed over to Tony Abbott – Australia’s economy was the envy of the world! (I also thought the deficit was $175b – but happy to be corrected?)
    I can’t not mention the trickle up economy – what else can cash spent do but trickle up? However, ‘trickle down’ doesn’t happen – it was actually a comic line used by a comedian – and later picked up by politicians, so now they ‘think’ it happens! Checking every budget where the tax rate was reduced for the top, and comparing employment figures, shows there has never been a corresponding increase in employment! But never let that get in the way of a good ‘lie’ for the LNP!

  20. Kaye Lee

    Jean,

    Re the debt when they took over….

    The election was Sept 7, 2013

    “The net debt of the General Government sector is $161,253 million at 31 August 2013.”

    “The net debt of the General Government sector is $174,557 million at 30 September 2013.”

    John was referring to gross debt, also known as AGS (or CGS) on issue. At the end of June 2013, that was $257 billion. By the end of December 2013 that was $288 billion.

    AGS on issue now is $607.4 billion with another $10.5 billion to be issued this coming week.

  21. Wayne Turner

    Sadly their MSM will cover it up,and the coalition will do their usual buckpassing.Then most of the gullible public will fall for it all

    Also, don’t forget what should be this governments pink batts (Over blown negative attacks on Labor,when dodgy bosses to blame.Plus more deaths under similar schemes,in similar time frame under Howard’s Libs.)moment,but on a much BIGGER scale:-

    The Ruby Princess debacle.

    The one boat they needed to stop,and didn’t.

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