Australians have effectively surrendered hope of improved living standards, expecting inflation will be much higher than weak growth in their pay packets.

The danger of such expectations is that they can be self-fulfilling. If workers assume any pay increase will be negligible, there’s little pressure on employers to do better than that.

And with the federal government limiting public sector wage increases to private sector movements, it becomes one more brick in the wall of wages suppression and falling living standards, boding ill for economic recovery.

The February Melbourne Institute survey of consumer inflation and wage expectations, released on Thursday, showed consumers expect their total pay over the next 12 months to rise by just 0.6 per cent.

That’s an improvement on what they thought over the past couple of months, but still miserable. It’s less than half what the Reserve Bank predicts underlying inflation will be this year and about a quarter of what consumers’ own inflation expectations.

It means Australians are accepting their living standards will go backwards. What’s more, consumers reported their total pay had shrunk on average by 0.4 per cent over the past 12 months.

Some 55 per cent reported they had no change in total pay, 24 per cent reported an increase, but the remaining 21 per cent lost more than what the 24 per cent gained.

Pandemic shocks aside, the Melbourne Institute survey’s wages expectations figure has proven to be a quite accurate forecast of what respondents end up reporting 12 months later.

The respondents are not nearly as good at forecasting inflation, predicting much higher levels than eventuate.

“Inflation expectations tend to be higher than inflation because consumers often focus on large or extreme price changes,” Melbourne Institute senior research fellow Dr Sam Tsiaplias explained.

The February survey’s trimmed mean expected inflation rate is 3.7 per cent and the weighted mean 2.3 per cent. The Reserve Bank should be so lucky as to achieve the latter figure.

As the accompanying Melbourne Institute graph shows, consumers were reporting sub-one per cent annual pay gains well before COVID hit, reflecting the weak economy and the several factors bearing down on wages growth.

Read more:

https://thenewdaily.com.au/opinion/2021/02/12/michael-pascoe-wages-hope/

Employers could sack experienced employees, replace them with workers earning just a third of the salary and get a taxpayer-funded grant to do it, previously secret Treasury documents have revealed.

Key points:

• The JobMaker subsidy pays companies up to $200 a week to hire people under 30
• FOI documents show Treasury examples of companies sacking full-time employees and hiring cheaper part-time workers
• Sack someone earning $75,000, replace with three staff on $30,000 and JobMaker will pay the $15,000 gap 

Treasury's own examples, obtained by the ABC using the Freedom of Information (FOI) process, show bosses could sack a full-time employee on $75,000 and replace him or her with three part-time staff on wages between $22,500 and $30,000, while remaining in front financially thanks to the generous JobMaker hiring credit.

The $4 billion, two-year scheme, revealed in the 2020 Budget, pays employers up to $200 a week for creating new jobs for people aged 16 to 29 years who are on JobSeeker, Youth Allowance or the Parenting Payment. (It is $100 a week for 30-to-35-year-olds).

Read more:

https://www.abc.net.au/news/2021-02-22/jobmaker-could-pay-bosses-to-cut-wages-jobs-treasury-foi/13157500

This week came further confirmation that even in the midst of a wages crisis, the Morrison government remains determined to push wages even lower.

When you get down to it, there are really two things that define the Liberal party’s economic agenda: low taxes for wealthy people and those who own companies, and low wages growth for everyone else.

The ambition of every economic policy the Howard, Abbott, Turnbull and Morrison governments have pursued over the course of their time in power since 1996 (and even beforehand when in opposition) has been to produce these two results.

This past week we saw the government announce a meagre increase in the jobseeker rate and an increase in mutual obligations. They also announced a hotline for employers to call to dob in unemployed people who refuse job offers – a job offer that might be declined upon discovering the wage and conditions.

Such a policy serves to keep wages low – employers can offer lower wages and know that a threat hangs over people should they refuse.

It is one of the most bastardly policies this government, which specialises in barstardry, has devised.

And it comes at a time when low wages growth is now a permanent feature of the economy.

Even in the midst of a pandemic, where economic data from GDP to retail spending has gone absolutely nuts, wages continue to grow at the exact pace expected over the past five years.

Read more:

https://www.theguardian.com/business/commentisfree/2021/feb/27/the-jobdobber-hotline-is-another-policy-aimed-at-keeping-wages-low

The Australian National Audit Office is considering an audit into the administration of the Safer Communities Fund overseen by the Home Affairs Minister Peter Dutton.

In February, 7.30 revealed that Mr Dutton personally slashed millions in grant funding from organisations that were strongly recommended by his department to improve community safety, and used the funds to support his own handpicked list that did not follow his department’s merit-based rankings.

Mr Dutton also used the funds to support grants for two councils – in the lead up to a byelection in a highly marginal seat – that his department recommended should not be funded at all.

Documents obtained under FOI contain the Minister’s handwritten notes indicating that he had approved the projects because he felt they would improve public safety.

These grants were awarded under round three of the Safer Communities Fund.

Under the grant guidelines, the Home Affairs Minister must take into account the assessment of each project, but he can effectively overrule his department’s own merit-based assessments.

7.30 also revealed Mr Dutton’s office fast-tracked a one-off $880,000 grant proposal to a retail association eight days after it made a $1500 political donation to the Queensland Liberal National Party – at an event Mr Dutton attended – for the purpose of supporting him. The department subsequently found the proposal represented value for money and recommend it be funded.

The association has previously donated to both major parties and its CEO said they were not aware Mr Dutton was considering the grant application at the time of the event.

Mr Dutton said at the time: “The baseless suggestion that I have or would be influenced by a lawful donation to the LNP is false and highly defamatory.”

“The suggestion that the government has done anything other than support projects worthy of support is nonsense.”

Following the revelations, shadow home affairs minister Kristina Keneally wrote to the Auditor-General, Grant Hehir, requesting that he undertake an audit.

In a response published on Wednesday, Mr Hehir indicated he would consider conducting an audit in a response to Ms Keneally.

“I am conscious of the level of parliamentary interest in grants decision-making,” Mr Hehir said in his response.

“With respect to open, competitive grant programs, requests from parliamentarians for audits often raise questions about whether funding decisions are being made in a manner and on a basis consistent with the published program guidelines.

“I will consider including an audit on this topic in the context of developing the Australian National Audit Office’s Annual Audit Work Program 2021-22.

“In the event that I decide to undertake an audit of the Safer Communities Fund, our scoping work will take into account your request.”

Peter Dutton’s office has been contacted for comment.

The Auditor-General has broad power to compel government agencies and public servants to provide information about the administration of public funds, making the Australian National Audit Office uniquely placed to determine whether public funds are being properly used.

The ANAO’s reports have in the past made significant headlines.

In January 2020, an audit was published into the administration of the unrelated Community Sport Infrastructure Program, which identified that $100 million in sports grants were not assessed on their merits and favoured “targeted” Coalition seats.

Then-sports minister Bridget McKenzie’s office was found to have engaged in a “parallel” assessment process to deliver the fund.

-ABC

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Most of the ASX-listed companies that received JobKeeper subsidies didn’t need it, and the great majority of those are keeping the money.

The governance advisory firm, Ownership Matters, has detailed the way in which corporate Australia has rorted the federal government’s pandemic support scheme and is not being held to account.

The study, released on Thursday, confirms a report in The New Daily earlier this month that found more than $1 billion had been paid to companies that subsequently reported increased profits or funnelled money to shareholders, with $3.6 billion going out in dividends and $20 million in executive bonuses.

The Ownership Matters study has now laid bare the extent of the gravy train.

Seventy-five ASX300 companies received $2.4 billion in JobKeeper subsidies in calendar 2020 – $1 billion went to 75 companies in the first half and $1.4 billion went to 66 in the half year to December 31.

Of those 66, 58 reported positive underlying earnings in the December half year. Those businesses received $741 million, or 30 per cent of the total paid to the top 300 ASX-listed companies.

To qualify for a JobKeeper payment of $1500 per employee per fortnight, companies had to report or credibly forecast a 30 per cent drop in sales in any single month between March 2020 and September 2020, compared to the same month in 2019. For companies with more than $1 billion in sales, it had to be 50 per cent.

It was a very good support scheme in many ways, because the money flowed quickly to businesses that needed it, because it used the existing systems of the Australian Tax Office, and it kept employees connected to their employers.

But because it was rushed, it had significant flaws that unscrupulous companies were able to exploit, and the government now doesn’t seem to be interested in holding them to account.

Most of the businesses suffered the qualifying drop in sales immediately, in March 2020, because they had to close entirely for at least six to 10 days (30 per cent of the trading days that month).

Their sales weren’t checked again until September, and that meant six months’ worth of JobKeeper for many businesses, or $19,500 per employee, was paid no matter what happened to their sales after the lockdown.

For businesses such as car dealer AP Eagers, with 6500 employees, that meant they got $129.7 million, even though car sales took off after the lockdowns ended and the company reported an underlying profit of $209.4 million.

Read more:

https://thenewdaily.com.au/news/national/2021/03/17/jobkeeper-schemes-massive-rorts/

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