As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
Parliament bypassed for Covid-19 legislation
Prime Minister Scott Morrison is increasingly bypassing parliament to ensure some measures addressing the coronavirus pandemic are exempt not only from parliamentary votes but also from amendment of any kind.
Most of the Morrison government’s Covid-19 measures have been implemented by regulations, also known as delegated legislation, rather than by full legislation.
Using this mechanism, they don’t require the house of representatives or the senate voting to specifically pass them. Parliament’s influence over delegated legislation is usually limited to disallowing, after the fact, elements that a majority of MPs or senators do not support.
But of at least 137 new laws made this way since the pandemic was declared, 32 are exempt from disallowance entirely.
The senate’s committee for the scrutiny of delegated legislation has become so concerned about the growing practice it has established an inquiry.
Committee chair and Liberal senator Concetta Fierravanti-Wells told The Saturday Paper that the “recent proliferation” of exempt instruments in response to the Covid-19 outbreak fuelled a longstanding concern about the “inappropriate exemption” of some delegated legislation.
The committee has already conducted an inquiry into the overall use of regulations and expressed its alarm that the government was increasingly relying on them to make laws.
Exempting those regulations from any disallowance restricted scrutiny further. Fierravanti-Wells said the practice had been relatively consistent between 2013 and 2018 but had “increased significantly” since 2019.
“The statistics demonstrate that a significant proportion of delegated legislation is now exempt from disallowance and therefore exempt from parliamentary oversight,” she said.
The Covid-19 measures exempted from disallowance include increases to the government’s borrowing capacity, changes to visa arrangements, restricted access to remote communities, laws covering the COVIDSafe tracing app, restrictions on exporting medical supplies and on accessing the antimalarial drug hydroxychloroquine, and the deferral of low- and mid-ranking public service pay rises.
Another exempted regulation, which the prime minister made personally on March 26, allows for Commonwealth bureaucrats not working directly on Covid-19 measures to be temporarily redeployed elsewhere in the federal public service, transferred to a state or territory service or assigned to work for a community organisation.
Fierravanti-Wells said the committee members were concerned by the lack of any publicly available guidance as to when the exemption power should be used and the fact there was no obligation to publish explanations.
The government had promised to publish guidelines but “has yet to fulfil these commitments”, she said.
The exempted measures do not include the doubled JobSeeker and newly created JobKeeper payments, the latter of which cost $130 billion.
As such, Labor and the Greens moved this week to disallow elements of the JobKeeper package to remove the provisions excluding employees of foreign-government-owned companies and the staff of Australian universities. Labor singled out more than 5000 airport workers employed by Dnata, which is owned by the government of the United Arab Emirates.
The government has resisted expanding the JobKeeper eligibility but has not ruled out changes.
Official unemployment figures revealed on Thursday that almost 600,000 people lost their jobs last month.
Treasurer Josh Frydenberg predicted that lifting the first three stages of restrictions would see 850,000 people back in work, boosting the economy by $9.4 billion a month.
Prime Minister Morrison confirmed the government would review JobKeeper, which currently has six million recipients, in June. “[It was] put in place in anticipation of this day because we knew it would come and more would follow, and these supports will remain vital in the months ahead as Australia works its way through,” he said on Thursday.
Some Liberal MPs are urging him to both expand and extend it, concerned at the dire impact coronavirus restrictions have had on small businesses in particular, which they emphasise are core Liberal constituents.
On Tuesday, the day the government had been scheduled to hand down the federal budget and reveal the first surplus in more than a decade, Frydenberg told parliament unemployment was expected to hit 10 per cent – double its pre-virus level – by the end of June.
He said that as of the end of March, the underlying cash deficit was $22.4 billion, nearly $10 billion more than was forecast last December.
But Frydenberg did not put a figure on the likely deficit by financial year’s end.
Deloitte Access Economics estimated national income for this financial year would come in $35 billion below what was forecast in December. It estimated that shortfall would be $200 billion by mid-2021 and didn’t foresee unemployment returning to 5 per cent before 2024.
Deferred because of the pandemic, the budget is now due to be handed down in October.
Fierravanti-Wells’s bipartisan committee is taking submissions on its inquiry until June 25.
This article was first published in the print edition of The Saturday Paper on May 16, 2020 as "Please explain".
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