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Labor Splits Over Jobkeeper

On Sunday, Sky News Chief Political Reporter, Andrew Clennell, revealed that a split had developed in the federal Labor Party over Jobkeeper. According to Clennell, Shadow Treasurer Jim Chalmers believes Jobkeeper should be extended to include workers employed by foreign companies and universities.

The split developed because Dr. Chalmers wanted Senate leader, Penny Wong to move a disallowance motion in the Senate last week to end Jobkeeper unless the additional workers were covered. Senator Wong told him the matter had to go the Shadow Expenditure Review Committee. When it was tabled in the Shadow ERC; Mr. Albanese, Senator Wong, Deputy Leader Richard Marles, and Tony Burke spoke against the proposal, while Dr. Chalmers and Tanya Plibersek spoke in support.

The split has given rise to speculation that Dr. Chalmers may be positioning himself for a leadership challenge if Labor loses the Eden-Monaro by-election. Some Labor members are commenting that the Shadow Treasurer seems to be cultivating the left faction, where there is grumbling that Mr. Albanese lacks cut through and is surrendering political territory to the Greens. Other complaints are that the Opposition Leader is surrendering media attention to the Government and the state premiers.

The senior members of the Opposition believe that Labor has to engage in a prudent course of limiting spending proposals and focusing on unemployment. Labor is in a difficult position, it wants to differentiate itself from the Government but the Government is working hand in glove with the premiers including the Labor premiers.

The premiers are in an impossible position: they are not generating enough economic activity to sustain state services let alone employ their citizens. At the moment 60% of Australian workers derive their income from government assistance packages, another 25% are employed as public servants. This means that 85% of the working population is being supported by 15% of people currently employed in the private sector, mainly mining and agriculture.

Obviously this is unsustainable into the future. On the other hand, there is a large slice of the public that is perfectly content to draw on the public purse, while not engaged in gainful employment, indefinitely.

The state premiers are concerned about the revival of their economies so they can generate the revenue they need to keep their schools and hospitals operating. They are therefore likely to be predisposed towards a Federal Government plan for economic recovery. The Coalition favors a revival led by the private sector supported by tax cuts and other government supports.

On the other hand, Labor’s preference is for a government-led revival based on a big spend on infrastructure, including Mr. Albanese’s hobby horse of high-speed rail. Labor will argue that this approach will rapidly reduce unemployment as opposed to the Government’s ‘trickle-down’ private sector-led approach.

In the event that the Labor premiers adopt a unity ticket with the Prime Minister, Scott Morrison, on a reform package adopted by the National Cabinet, then the Opposition will be isolated in the run-up to the next election.

This is Mr. Albanese’s fear. He doesn’t want to fight a ‘Labor against the rest’ election. On the other hand, Dr. Chalmers wants to fight an election on ‘fairness and wealth redistribution’. This schism will not be papered over easily.

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