Steven Kennedy has addressed Adam Morton’s report on the leaked Covid commission manufacturing taskforce’s massive plan to expand the gas sector.
Kennedy said he’s aware of the news report, but hasn’t read the draft briefing paper, and takes on notice whether anyone else in Treasury is aware of it.
Kennedy said the National Covid-19 Coordination Commission has not commissioned work from Treasury. “We haven’t been asked to model their proposals,” he said.
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Centre Alliance senator Rex Patrick has accused Treasury of “obstructing” the Covid-19 inquiry by refusing to release modelling about projected unemployment, labelling it “disrespectful”.
Patrick said he will start using freedom of information to get at the modelling.
The chair, Katy Gallagher, says the committee will be “responding to you more formally than that” – which indicates Labor and other members share their concerns and plan to write to the Treasury secretary, Steven Kennedy.
Kennedy suggests the committee include the Department of the Prime Minister and Cabinet in any correspondence, because he had been “guided” by its view on consideration of material.
Gallagher asks if PMC had instructed Treasury not to release the modelling. Kennedy says Treasury “sought advice on the treatment of documents” and PMC advised they should be treated as cabinet documents which Treasury “wouldn’t usually release”. So basically: yes.
Earlier, Kennedy said Australia is “well past” what would be called a recession, but is cautious about using the term “depression” because the Covid-19 contraction is a “disease-led shock”. Unlike a depression, there is no “massive misallocation of capital or highly dysfunctional credit markets”.
He said:
“I’m not predicting a V-shape recovery. But given the nature of the shock – if the government responds well with its fiscal levers, we needn’t have an L shaped recovery, which is what people would think when it comes to a depression.”
All the people are there after the shock … All the productive capital at the beginning sits there at end. [The question is] Have you avoided the destructive cycle of firms going broke, running out of cash, and people losing confidence and becoming very precautionary.”
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Steven Kennedy, the Treasury secretary, is at the Covid-19 committee addressing April’s labour force statistics showing a loss of 600,000 jobs and unemployment rate of 6.2%.
Kennedy said that “roughly speaking” the figures were in line with Treasury’s estimates that unemployment would reach 10%, or 15% if it weren’t for the jobkeeper wage subsidy.
Kennedy noted the second week of April was one with “lots of restrictions” on the economy, and the ABS stats showed there were 489,000 people who had left the labour market ie were not looking for work.
He said:
“If we put that plus the unemployed, we’d get an unemployment rate of about 9.6%, that’s roughly equivalent to the 10% we expected to see. The thing that we missed was there was a much larger withdrawal from the labour force than we anticipated. I expect they will go back into the labour force and be counted unemployed.”
Kennedy noted that mutual obligations have been suspended, but argues workers were “simply unavailable” to work because they were advised to stay home, and he “wouldn’t be surprised” if there is a significant rise in unemployment when the economy reopens and they start looking for work.
Kennedy also noted a “dramatic” fall in the number of hours worked, and said the UNDERemployment work is 19.9%.
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