As JobKeeper is wound back, the government’s cheap flights scheme is a huge punt



It’s hardly a new phenomenon: the ramping up of positive government announcements just before the weekend when Newspoll is due to go out in the field to measure how voters are judging our politicians.

But this is perhaps the first time a nervous government has offered half-price holidays to lift the public mood.

The Morrison Government’s announcement of its $1.2 billion Tourism Aviation Network Support package on Thursday — payments to the major airlines which are to be passed on to contented taxpayer holiday makers from April 1 — was announced with little detail about how the destinations eligible for the cut price fares had been chosen, other than that they were destinations hit by a falloff in international tourism.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.

Play Video. Duration: 1 minute 28 seconds

Mr Morrison says NSW is not the focus of $1.2b package because tourism there has recovered.

Well-known international tourism meccas, for example, like Merimbula in far southern New South Wales, as well as the more obvious places like Cairns, were on the original list.

And of course there have been subsequent random additions to the destinations list, apparently as someone, somewhere has thought of them, like Darwin and Adelaide.

Apart from Qantas chief executive Alan Joyce, it was hard to find many people who seemed very happy with the scheme.

Operators in the big cities pointed out that they usually get the lion’s share of international travellers; regions that have missed out aren’t happy; tourism operators that have been keeping afloat on JobKeeper aren’t persuaded they can survive simply on the hope of more travellers flying into their area.

The Opposition, being cynics, tried to line up the destinations with marginal seats. Others tried to line them up with the Tourism and Transport Forum “heat map” released this week showing areas particularly hard hit by the loss of international travel.

Coronavirus supplements winding back

But if you really want to make comparisons to test this scheme, why not make one between the highly scientific way the government’s new support for the tourism industry has emerged — that is, giving airlines money to splash around on cheap flights in a rather, shall we say, haphazard fashion — and the way it approached ending the coronavirus supplement which was keeping millions of people above the poverty line.

The coronavirus supplement, which doubled the rate of unemployment and other benefits, and JobKeeper, the wage subsidy offered to businesses to keep staff connected to their employers, both stop at the end of this month.

The Prime Minister told the Australian Financial Review Business Summit this week that, “Australia’s remarkable performance in saving lives — the third lowest mortality rate from the pandemic among G20 nations — is the first point of conversation when I speak with foreign leaders, I’m proud to say”.

“But we’ve been equally successful in protecting livelihoods, better than almost every other advanced economy in the world today,” he said.

a woman wearng a red mask with the sydney centrepoint tower in the background
The Prime Minister said “Australia’s remarkable performance in saving lives” is the first point of conversation when he speaks with foreign leaders.(AAP: Mick Tsikas)

Mr Morrison said that he had set out the principles that would guide the government’s economic response to COVID-19 at the same summit last year.

“Our response would be proportionate, timely, scalable and targeted,” he said. It would be temporary and have a clear fiscal exit strategy, “and wherever possible it would favour responses that boosted productivity”.

It is hard to see exactly how you would apply the “proportionate, timely, scalable and targeted” tests to the end of these two schemes.

Communities left vulnerable

The government announced recently that it would be replacing the coronavirus supplement — originally $275 a week but now down to $75 a week — with a $25 a week increase in the JobSeeker unemployment benefit. Other changes mean recipients will only be allowed to earn $75 a week (instead of $150 a week) before JobSeeker payments get cut.

And of course there was all that “dob in a bludger” hotline rhetoric.

The $1.2 billion cheap airfares scheme, which dresses up a huge government subsidy to the airlines as support for tourism jobs, is replacing the JobKeeper scheme which was costing over $100 billion.

Consider how these “proportionate, timely, scalable and targeted” might work out in a place like Cairns.

It’s been estimated that JobKeeper support in Cairns alone has been worth around $800 million. The number of people receiving unemployment, and other, benefits in Cairns exploded as the pandemic hit last year.

According to research from the University of NSW, the number of people eligible for the coronavirus supplement jumped by 9,417 to 24,770 between September 2019 and October 2020.

That shows just how vulnerable many communities are to the sudden cutting off of support for both businesses’ wage bills and government income support.

The government, however, seems to be cheerily optimistic that the sheer volume of money that it has pumped into the economy over the past year — which is indeed eye-watering — will start to be spent as people’s confidence in the economic outlook lifts, and with it so will the economy rise.

It is a huge punt. And it is always easier to fork out money than it is to work out the best way of withdrawing it.

A short-lived period of relief

If only the government were not distracted by the fact two of its most senior members are embroiled in potentially career-destroying scandals, and by the fact the vaccine rollout, which was supposed to underwrite a rapid return to normality, had been significantly slowed by supply problems.

There was a short period of relief this week from rape allegations dominating the news cycle. But it cannot continue as parliament reconvenes next week, even in the absence of Attorney-General Christian Porter and Defence Minister Linda Reynolds.

Mr Porter stands behind the lectern with Mr Morrison alongside him.
The Prime Minister’s determination, until now, to stick by Christian Porter and Linda Reynolds will increasingly come under question.(ABC News: Ian Cutmore)

The Prime Minister’s determination, until now, to stick with his two politically wounded ministers will increasingly come under question, as will his political management of these horrible issues, and his credibility.

A statement released on Friday by a friend of the woman at the centre of the allegations against Porter — which indicate she had told him of the alleged assault within months of it happening — will further add to the pressure on the Attorney-General.

Scott Morrison may declare his Attorney-General an “innocent man under our law” and Porter has categorically denied the allegations, but as has repeatedly been made clear this week, there are multiple fora in which Mr Porter’s status as a fit and proper person to hold his current job could be tested, just as thousands of other Australians might be tested in similar circumstances.

That might be via an inquiry launched by the body that registers lawyers in Western Australia.

Even as the government continues to insist it will not launch an independent inquiry into this allegation — an inquiry which may even give Christian Porter an opportunity to clear his name from an untested allegation — it has no control over whether other such inquiries, like the ones mentioned above, could be launched.

As with everything at the moment, it feels like the government has little control over events. No wonder it is doing whatever it can to try to control the fallout in the Newspoll.

Laura Tingle is 7.30’s chief political correspondent.


Source link