Q+A tackles the financial cost of the coronavirus crisis as worried Australians eye economic depression

Q+A tackles the financial cost of the coronavirus crisis as worried Australians eye economic depression

Posted

March 31, 2020 03:54:32


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A viewer, Jana, told Q+A she fears for what the future holds after losing her job. (ABC)

The Morrison Government has delivered stimulus packages worth hundreds of billions of dollars to address the coronavirus crisis, but ordinary Australians still hold deep uncertainty about their financial futures.

Key points:

Economist Nicki Hutley says a depression would be the worst-case scenario of the COVID-19 crisisThere were calls to increase the wages of healthcare workers to reflect the value of what people doA human resources consultant alleged a client was trying to short-change staff through illegal redundancy practices

Monday’s episode of Q+A discussed the economic impact of the crisis, with guests including Commonwealth Bank chief Matt Comyn, Australian Business Council chief Jennifer Westacott, economist Nicki Hutley, singer-songwriter Josh Pyke, Assistant Treasurer Michael Sukkar and Shadow Minister for Families and Social Services Linda Burney.

Josh Pyke, a multi-Aria winner with five albums, said his next six months would be lean times.

“Financially, we’re all very, very concerned. Our industry has been decimated,” Pyke told host Hamish Macdonald.

“My personal touring income has been written off for the next six months.

“We [artists] contribute $15 billion to the economy every year, which is something a lot of people probably don’t think of when they think of entertainers.”

Pyke said he felt unsure if the $130 billion package announced on Monday that subsidises workers through a $1500-a-fortnight payment to employers would work for everyone, especially those in the gig economy.

“We kind of exist on the fringes of wages anyway,” Pyke said.

“We have multiple jobs. We play shows. We work in hospitality, which is heavily affected. We often fall between the cracks of subsidies and benefits.

“The new announcement, it seems positive, but there’s so much we don’t know about, what we need to do to be eligible for those subsidies.”

External Link:

@QandA: Will the wage subsidy package extend to self-employed workers? #QandA

Deloitte economist Nicky Hutley said despite the Government doing all it could, there would be tragic consequences for some.

“There are still lots and lots of questions here,” Ms Hutley said.

“The Government has gone as hard as it can. It is trying to fill all the gaps.

“Each time they come out with something and we economists say, ‘What about these people and these people?’

“People will slip through the cracks. There will be people who will lose livelihoods and marriages will collapse.

“There will be terrible social and economic consequences. We can’t avoid that.”

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People are ‘scared’ for their future

Bar manager Jana joined the show via a pre-recorded interview; the 23-year-old had been employed full-time, but she and 15 colleagues were recently let go in scenes she described as “heartbreaking”.

Despite seeking the Centrelink payment and the potential JobKeeper payment kicking in from May, she may be forced to burn through savings.

“It [welfare payments] will just cover my rent and groceries for the week, but it won’t cover any bills,” she said.

“I have a little bit of savings behind me but if I’m waiting till mid to late April for the payment it will burn through.

“I feel uncertain because there’s no time frame on this. I don’t know how long it’s going to last. I don’t know how long I’ll be in this predicament for.

“There is light at the end of the tunnel but what’s it going to look like when we come out on the other end? I don’t know when it will be normal again.”

Asked if she felt scared, the straight answer was “yes”.

Shadow Minister for Families Linda Burney sympathised with her.

“Her story … is one of millions of stories across this country,” Ms Burney said.

“And the rate of unemployment, which I’m sure people will comment on, is going to be something like 11 to 12 per cent.

“We have been here before. And that was the Great Depression and during the financial crisis. As Scott Morrison likes to say, when we get to the other side, I think what she is asking is — what is the other side?

How bad could it get?

The spectre of a depression was raised via a viewer question and Ms Hutley said it was a possibility but the worst-case scenario, calling for optimism.

External Link:

@QandA: Are we heading to a recession? Or are we actually facing a depression? #QandA

“Two quarters is a recession and [typically lasts] maybe up to a year-and-a-half,” she said.

“Something more like two to three years is more like a depression and you’re seeing a much deeper downturn.

“Certainly our latest forecasts don’t look that great but are not quite at depression levels.

“One of my colleagues described this as trying to catch a falling knife. It’s never been more important for us to be forecasting and never more challenging for us to do so.

“If we get to the end of three months and there’s a miracle anti-viral and nine months there’s a vaccine, in the rosy world of what could be the best-case scenario.

“On the other hand, if it keeps spreading through the world, we take longer to do the vaccine — anything is possible. The absolute worst-case scenario everyone is looking at could well be a depression.”

‘Tsunami of legal action’

Some are treating others badly during the crisis; Natasha Hawker, who works in human resources, called in via video link to tell of a client looking to circumvent workplace laws to make staff redundant.

External Link:

@QandA: How can we ensure that business owners do the right thing by their staff? #QandA

“It is a bloodbath at the moment,” Ms Hawker said.

“We’re seeing businesses that are being exposed to significant risk. They’re panicking, they’re making rash decisions as they desperately scramble to save their businesses.

“We had a client with 15 employees … who came to us and said ‘we need to make some people redundant but basically what we’re going to do is we’re going to pretend we only have two separate locations and not pay redundancy. Are you going to help with that?’

“We said ‘we can’t because it’s illegal and it would expose us’. So we lost a client.

“We had another business that has let go or stood down some employees and effectively terminated them.

“When we said you can’t do that, their response was, ‘Tell Fair Work to come after me because I won’t have a business by then’.

“Fines for breaches are up to $63,000 for the organisation and up to $12,600 for the individual, the manager or the director. We’ll have a whole lot of tsunami of legal action [when this is over].”

Business Council of Australia chief Jennifer Westacott said from what she had seen Australians were generally working to help each other, but Commonwealth Bank boss Matt Comyn said he felt for business owners.

“It’s certainly understandable that people are really concerned,” Mr Comyn said.

“If you’re a business owner and you’ve had huge changes in your trading performance, it is quite understandable that people may be going to make rash decisions.

“We deal with a lot of regulators in the banking industry and I really agree with Jennifer — this is a time for Australia really to come together.”

Time to re-evaluate pay?

Mr Comyn was put on the spot by high school teacher Will Benson, who called in to suggest it was time healthcare workers and perhaps not banking CEOs received big salaries.

External Link:

@QandA: Does the COVID-19 crisis offer an opportunity to reframe the value of frontline workers and adjust their pay accordingly? #QandA

“I’m a high school economics and workshop teacher in South East Queensland and I’ve been speaking with my students about the difference between real value and financial value,” Mr Benson said.

“In Australia at the moment, the financial value of a nurse is now about $65,000 a year — I’d argue their real value to society is much higher than that.

“The financial value of a Commonwealth Bank CEO is about $8.6 million per year and I’d argue that their real value to society is much lower than that.

“Does the panel think that the COVID-19 crisis could be an opportunity for society to better recognise the real value of front-line workers?”

The $8.6 million figure represents Mr Comyn’s total potential income. Asked if the crisis made him reassess the value of his work, Mr Comyn deflected.

“I don’t think there’s any question we all have a great degree of admiration for healthcare workers … particularly at the moment because they really are on the front line,” he said.

“Saving lives and also putting themselves at risk. That’s why it’s incredibly important that not only they’re compensated but protected.

“A lot of the measures that have been announced have been designed to protect the overall healthcare system.

“I think it’s very hard for a CEO of any company to try and rationalise remuneration levels across different parts of the economy, so I’m not even going to try and do that other than to agree with the premise of the question — that healthcare workers really are the heroes of what’s going on at the moment.”

Both Ms Westacott and Ms Hutley suggested aged care workers and teachers should also be in line for pay rises when the crises ends.

Your questions on coronavirus answered:

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Topics:

health,

diseases-and-disorders,

respiratory-diseases,

infectious-diseases-other,

economic-trends,

australia

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