SUNDAY, 9 AUGUST 2020
SUBJECTS: Beirut; Coronavirus; Fraud; Government’s disastrous early-withdrawal of superannuation scheme; young people; nursing homes; 2020 Budget; JobKeeper
STEPHEN JONES, SHADOW MINISTER FOR FINANCIAL SERVICES: Thank you all for coming out here on a cold, wet Canberra afternoon.
I want to start by expressing, on behalf of the Australian Labor Party, our sympathy for the family of Isaac Oehlers, who passed away in that devastating blast in Beirut earlier this week. We also want to extend our sympathy to the families of the 17 Victorians who has been revealed by the premium passed away overnight.
Now, a few moments ago, it was revealed that three Queenslanders have been arrested in a further episode of fraud, through the government's trouble-plagued early release of superannuation scheme. It's quite clear that the problems of theft and fraud arising from this scheme are much bigger than the government has revealed. It's time for the government to come clean.
We know that over 2.5 million Australians have accessed their superannuation through the early release scheme. In, part because there was insufficient support or timely support otherwise coming to them. Of those 2.5 million Australians, over 600,000 have completely wiped out their retirement savings, and we know that young Australians are the majority of that group.
Today, we can reveal that the total cost to these young Australians that is people under the age of 35 is $44 billion in retirement savings. That is $44 billion that has been wiped out in retirement savings for young Australians. And it was revealed earlier this week by the Reserve Bank of Australia that young Australians and the superannuation sector are doing the heavy lifting in economic stimulus. Without the contribution of that early release from the superannuation sector, the economy wouldn't be going as well as it is, and it's already in a poor state. So, for these young Australians, the message from the government is quite clear. The consequences are: $44 billion dollars lost in retirement savings and there's are going to have to work longer. That means they're going to be paying higher taxes, but also means they're going to have less available for them in retirement potentially a lower pension.
They're going to look back on this and think of this superannuation policy as being as dumb as the introduction of cane toads in Australia. This is the legacy of this government policy.
Happy to take this any questions.
JOURNALIST: The government says that the amount of people actually using the super scheme is very small. So far, they've only arrested three people. What's your reaction to that that the majority of people are using it for our agency?
STEPHEN JONES: Well, actually that's not quite right. The tax office revealed in the COVID committee last week that there are at least hundreds of instances of fraud. That number could be growing, but we need full transparency from the government. We need transparency from the government about: how many instances of fraud, what they're doing to prevent further instances of fraud, and how the individuals going to be compensated for the money that has been stolen from their superannuation accounts. The answers to each of those questions have not been forthcoming.
JOURNALIST: What is it about the scheme that you think’s making it more susceptible to fraud, than any other ATO administered scheme?
STEPHEN JONES: There's a number of problems with this scheme. Firstly, they created a cargo cult, and you've had government members running around the country somehow promoting that “it’s free cash”. And no doubt that has been part of it. You’ve also got the automated self-assessment scheme, so that you're able to access the scheme. I don’t want to use this forum as a mechanism to provide a user's guide on how to engage in fraud yourselves, but the design of the scheme and the way it’s been administered has left it open to the frauds that we’ve seen.
JOURNALIST: Now, the Prime Minister has repeatedly said that a high proportion of the young people who are taking out money have invested it wisely, for example to sure up their mortgage and the like.
STEPHEN JONES: Look, the government should release data that's its assertion, but frankly that’s not the purpose of the scheme. The purpose of the scheme when the Prime Minister and the Treasurer stood up in Parliament and said we are introducing a scheme to deal with hardship. That is the scheme that was legislated by Parliament. That should be the scheme that the tax office and the government are implementing. If they wanted to introduce some sort of general stimulus scheme or some alternative investment scheme, they should have stood up in Parliament and said that that's what they were doing. But they weren’t. That's not the purpose of this scheme. We 100% percent support the original purpose of the scheme, that is to make money available to Australians for hardship
If money is being withdrawn for other purposes. It's an indication that it hasn't been withdrawn in accordance with the law.
JOURNALIST: But as you say supported the policy at the time, and saw that there was some benefit in doing it? So how else would you have structured it?
STEPHEN JONES: We warned the Government at the time: the only thing worse than a bad policy, is a bad policy that was poorly implemented. And this is a bad policy that has been poorly implemented. They have been more focused on getting money out the door than they have been on checking on instances of fraud or theft or whether the scheme has been complied with.
JOURNALIST: There’s been significant problems with Victorian nursing homes, which have been blamed on the Commonwealth Government. But we’ve got control cases from around the country where this hasn’t happened. Doesn’t this show that the fault lies with the Victorian Government?
STEPHEN JONES: We’re dealing with a significant crisis in Victoria, and they’ve just gone into stage 4 lock-down. Clearly there is a significant problem in aged care, and there are problems in other areas throughout the state. I think, at a time when there's a crack in the dam, and everyone is working around the clock to catch that up, I don't think it's a time when we should be searching for who’s responsible for putting the crack in the dam. I think we've got to work on ensuring that we are fixing the problem. There's a judicial review that has been appointed in Victoria, and other reviews around the country that are underway. Let them do their work.
I think the Andrews government is doing the right thing: working cooperatively with the federal government to ensure that we could deal with the crisis at hand.
JOURNALIST: On another issue – Mathias Cormann didn’t rule out corporate tax cuts being in the October budget. Would you consider supporting tax cuts for bigger companies?
STEPHEN JONES: Look, we think that there are bigger priorities and ways to stimulate the economy. We don't think that we are going to see a tax cut led recovery. We’re more interested in ensuring that the government has got a plan for jobs and a plan to get us out of the economic woes that we're in at the moment. We don't think that is going to be a tax cut led plan.
JOURNALIST: The finance minister also alluded to flexibility in terms of JobKeeper and further changes should the situation in Victoria warrant it. What do you think of that, and do you think that’s fair in terms of providing Victorians with certainty?
STEPHEN JONES: Well, clearly, the numbers the government released in its budget update a few days ago were wildly optimistic. It's been revealed by the government themselves that they weren't based on health advice. So clearly, they were wrong. We will work with operatively with the government to ensure that JobKeeper and JobSeeker are adequate to the needs of the Australian community. Whether that is the level, or whether that is the dates on which JobKeeper is phased in and out, we will work cooperatively with the government on each of these things. But I do want to make this point: tinkering with the guidelines is not a plan for jobs, and it's not a plan for economic recovery. What want to see from the government is a plan for jobs and a plan for economic recovery.
JOURNALIST: Do you think that, in terms of certainty, it’s fair to be making decisions like this on the fly?
STEPHEN JONES: We think that their absolutely were problems with the JobKeeper arrangements. We said to the government that it could be better targeted. It didn't make sense, for example, that there some people who are getting a pay rise, where other people were being excluded from the JobKeeper arrangements.
Understandably, when you're moving quickly, as the government was in those early days, a scheme need to be put in place to get things moving.
But when problems are obvious, when the opposition is willing to work with you on fixing some of those obvious problems, they should have moved quicker than they did to change some of those guidelines. We’’ work more effectively with them on improving the scheme, but I've got to say some of the assumptions that the government put in place around employment and around economic activity are wildly, wildly, optimistic. For example, I don't think anyone will assume or should be assuming that international air travel and our borders are international borders are going to be open on the 1st of January, as was assumed in the economic update. If that is what the government is basing its assumptions around JobKeeper, then it obviously has to go back to the drawing board.