ActivePaper Archive PM flags end to COVID payments - The Age, 2/1/2021

PM flags end to COVID payments

Prime Minister Scott Morrison will commit $1.9 billion to ramp up vaccinations in a pledge to protect health while weaning the economy off the ‘‘blank cheque’’ of endless federal payments.

Outlining his agenda for the year, Mr Morrison will talk of delivering the first jabs in late February as part of a ‘‘comeback’’ in the economy that will see Australians return to work.

But he will spurn industry calls for another big stimulus to replace the JobKeeper wage subsidy when it stops at the end of March, saying the economy is still gaining the benefit from federal payments worth $251 billion. ‘‘You can’t run the Australian economy on taxpayers’ money forever,’’ Mr Morrison says in a draft of a speech to be delivered to the National Press Club in Canberra today.

The speech puts the priority on suppressing the virus and delivering the vaccine, while placing heavy emphasis on the need for industry to recover without relying on federal funding.

Mr Morrison will argue that consumer and business confidence has recovered as restrictions have eased, in a trend that will be supported by the vaccine rollout at thousands of GPs and pharmacies.

‘‘The task now is to continue our economic recovery by sticking to our economic recovery plan and exercising the fiscal discipline necessary to ensure that we do not overburden future generations and continue to spend taxpayers’ money wisely,’’ he says in the draft. ‘‘We are not running a blank cheque budget.’’

Parliament is to meet tomorrow, with Labor warning that JobKeeper is being wound back too quickly and the unemployed need a permanent boost in the JobSeeker rate.

Tourism & Transport Forum chief Margy Osmond has called for federal help to make up for international border bans that could last all year, while hospitality needs more assistance and the education sector fears the loss of billions of dollars in revenue from overseas students.

While Treasurer Josh Frydenberg said yesterday there could be ‘‘targeted support’’ for tourism and other industries, he and other ministers expect the states to offer more spending. The view within the federal government is some premiers have imposed border controls and must therefore assist their own industries.

Labor Treasury spokesman Jim Chalmers accused Mr Frydenberg of a ‘‘stupendous lack of understanding’’ about the impact of international border bans that turned away overseas travellers.

‘‘Some businesses are recovering and don’t need JobKeeper any more, but many are still struggling and require ongoing government support,’’ Mr Chalmers said. ‘‘It shouldn’t be beyond the government to work out a way to extend that support beyond March for parts of the economy, including those which are impacted by the federal government’s international border closures.’’

Mr Morrison avoids any mention of a further stimulus in his speech and highlights the ‘‘long tail’’ from the $251 billion in support outlined last year, some of which continues this year.

He cites Treasury analysis that economic activity would be 5 per cent higher this fiscal year and 4.5 per cent higher in the next fiscal year than if no federal support had been provided.

The $251 billion includes $74 billion for JobMaker, which groups together policies ranging from tax cuts to hiring credits, and $177 billion, which includes JobKeeper and the temporary boost to unemployment benefits.

The $1.9 billion for the vaccination program includes $200 million announced yesterday for pharmacies to be part of the rollout.