Governments aren’t very good at spending money. It’s a comment that jaded voters who regularly find themselves yelling at the television wouldn’t find particularly controversial.
But we’re not talking in this instance about governments not being very good at spending money in the sense of the time-immemorial charges that governments squander taxpayers’ money in self-aggrandising schemes or lining their own pockets.
We’re talking about the fact that they aren’t actually very good at spending money — as in, getting it out the door in ways that actually achieve their stated policy goals.
The governments that seem particularly bad at spending money in this sense are the ones who profess an almost moral horror at the very thought of doing it in the first place, but find themselves, due to circumstances beyond their control, having to do so.
Amid the blizzard of Budget “drops” to the media, the multiplicity of small and large business tax concessions, the not fully-explained grand schemes, and sad resignation about levels of debt and deficits, this has got to be the underlying doubt gnawing at us all as we prepare for next Tuesday’s Budget.
The Prime Minister said this week that Tuesday’s Budget will be all about “cushion[ing] the blow of the pandemic recession, recover[ing] what’s been lost — the jobs, the livelihoods, the hours, the incomes, the customers, the clients. But importantly, to take new ground by rebuilding our economy for the future”.
These are admirable aims, and the Government has without doubt done a lot so far to cushion the blow of recession via JobKeeper, JobSeeker and some of its other interventions.
But the two crucial questions now have to be: How effective will the Budget be in managing this critical next six months, as existing supports wind back? And, longer term, to what extent will the budget recognise and seek to address the much deeper systemic flaws the pandemic has so viciously exposed?
Aged care is completely broken
The most tragic and obvious of those systemic flaws is in the aged care system, as the Royal Commission’s report this week made clear.
The Government has made an initial commitment of funding and promised a more comprehensive response by December 1. And then there will be its response to the final Royal Commission report when it’s handed down next year.
But it feels we need a bit more than that this time around. Not just “well, the Government is considering the recommendations, there have obviously been some failures”, etc.
It feels more like, just once, a government should say, “Actually, we have collectively stuffed this up. It’s not a matter of failures in the system. The system is completely broken. We actually need to completely recalibrate our collective thinking about how much money we need to spend and what the standards are that we deem acceptable for care for our old people.”
And aged care is not the only broken system that the Government needs to acknowledge is incapable of doing what it’s supposed to.
$1.4b system can’t keep up
More than 20 years ago, the Howard government outsourced the work of finding jobs for the unemployed from the Commonwealth Employment Service.
Not-for-profit as well as profit-based agencies won contracts to deliver these services, which were originally called the Job Network but which is now called Jobactive.
Two years ago an expert panel commissioned by the Government itself reviewed the system and found, among other things, that very few employers actually use the system and, among the long-term unemployed, “one in five job seekers have been in the system for more than five years”.
Neither of these things will come as any shock to anyone who has watched this process over its life.
The idea was that the agencies would earn their income from turning over the easy-to-place transitory workforce and concentrate their resources, and get better remunerated, for helping the long-term unemployed get the basic skills and assistance they need to get in the workforce.
Most of the audits of the system have concentrated on how the department that oversees it has gone about awarding contracts, not whether the system was working.
And what does this system that employers don’t use — and which doesn’t help 20 per cent of the long-term unemployed get into work for as long as five years — cost taxpayers?
It costs $1.4 billion a year. The system has essentially become a protected industry the Government created and now seems to feel a responsibility to protect.
And now this system is at centre of the greatest unemployment crisis in a century.
Jobs v business
Between December 31 last year and August 31, the caseload of unemployed in the system doubled from around 613,000 to just under 1.4 million. And that’s with JobKeeper still in place.
The Government has said it’s developing a new model to be rolled out in the middle of 2022, and last moth announced a local jobs program.
But there seems little sense of urgency about it in all of the verbiage from the Government in the past few weeks.
Perhaps that’s because the Government’s message in the last couple of weeks is that the worst is behind us: that after that initial crash in job numbers, the jobs market has bounced back.
Despite all the talk of the most crucial issue being jobs, most of the Government’s attention to date has been on helping business.
There’s been talk of possible targeted wages subsidies to employers being included in the Budget as part of a bridge out of JobKeeper.
But wage subsidies based on employers’ needs don’t do much to target the specific needs of employees who, through no fault of their own, suddenly face the prospect that their entire industry or profession has just been obliterated.
Will we get our Prince Charming?
In recent weeks we’ve seen the Government ditch long held positions on things — from the NBN to manufacturing assistance — as it tries to reassure voters it has things under control.
But what we are left with is a government without an ideological or even philosophical view of what government is supposed to be.
And for months it has been spewing out policies that haven’t actually resulted in much — or any — money going out the door.
It’s not just bushfire funding that doesn’t seem to have moved but house building subsidies, small business loan guarantees, as well funding to the arts and tourism.
On Tuesday night, Josh Frydenberg needs to be the Prince Charming who battles through the vines to wake up the Sleeping Beauty that is the Australian economy.
He can’t just rely on promises of spending gazillions of dollars in 12 months’ time to do that.
People will have to believe there is something propping the place up for a bit longer, and that Government may have to, just for once, look like they’ve learned that things really do need to change.
Laura Tingle is 7.30’s chief political correspondent.