93 Australian economists and policy experts have signed an open letter, coordinated by the Centre for Future Work at the Australia Institute, supporting a government wage subsidy to prevent mass unemployment during the coming economic downturn resulting from the COVID-19 pandemic.
Signatories to the open letter include Bernie Fraser, former Secretary to the Treasury and Governor of the Reserve Bank; Professor Roy Green, former Dean of Business at UTS; Professor Andrew Stewart, Professor of Law at the University of Adelaide; RMIT Distinguished Professor Sara Charlesworth; Professor John Howe, Director of the University of Melbourne School of Government; and Rae Cooper, Professor of Gender, Work and Employment Relations at the University of Sydney.
The open letter states, in part:
“The coming recession will be unprecedented in Australian history – in both its speed and its depth. Without immediate action, we expect that 1-2 million workers, or even more, could lose their jobs in coming weeks. That would drive unemployment to 15% or higher, overwhelm income support programs, and leave hundreds of thousands of businesses unable to function – even after the immediate health danger passes.
“We recommend that the Commonwealth government immediately implement a large-scale wage subsidy scheme, similar to those already enacted in several other industrial countries.”
“The breadth of support we received on this open letter confirms the proposal is supported by a broad cross-section of Australian stakeholders. The Government needs to move quickly now to implement this measure, and ease this pandemic’s devastating economic effects,” said Dr Jim Stanford, Director of the Centre for Future Work at the Australia Institute, and author of the open letter.
The wage subsidy proposal has also been supported by many Australian unions, business peak bodies, and other stakeholders.
Bernie Fraser, former Secretary to the Treasury and Reserve Bank Governor said, “Australia’s post-corona economic resurrection requires the on-going preservation both of the skills and self-esteem of our workforces, and of our business and entrepreneurial talents. If Australia is serious about ensuring the readiness of our work-forces to spring into action when the time comes, it should provide appropriate support direct to those workforces, as several other countries appear to be doing.”
Professor John Howe, Director of the Melbourne School of Government, said, “Wage subsidies are a longstanding and legitimate form of government support for job creation and retention. In the context of the current crisis, an urgently implemented wage subsidy program will help workers retain income and stay in employment, unlike direct welfare payments. And they are more accountable than boosting cash flow to employers, which may or may not be used to save jobs.”
Professor Roy Green, former Dean of Business at UTS, said, “The duty of the Australian Government in these extraordinary times is to ensure that a short term crisis does not become a long term disaster for the nation. In fact, the Prime Minister has referenced the need to build a ‘bridge’ to a better, stronger economy. For this to happen, the bridge must include substantial wage subsidies to retain workforces for the recovery and provide them with an income as they reskill and reposition our industries for the future.”
The full open letter and list of signatories can be viewed here.
A catalogue of international initiatives to support workers, compiled by the Centre for Future Work, is available here.