Yahoo Finance ‘Inadequate’: The major problem with JobSeeker’s $300 cut
Australian unions, social service groups, charities and political figures have criticised Prime Minister Scott Morrison’s revised JobSeeker scheme for not going far enough to support Australians in the long-term.
Morrison and Treasurer Josh Frydenberg yesterday announced cuts to the JobSeeker and JobKeeper schemes that would see JobSeeker’s coronavirus supplement slashed by $300 to $250, and JobKeeper brought down to $1,200 a fortnight for full-time workers.
While those who have long advocated for a permanent increase to the JobSeeker base rate have cautiously welcomed the supplement extension, they argue it still falls short and that an eventual return to the original rate would push even more Australians into poverty.
Also read: Children, renters, home owners: 650,000 face poverty in September
Also read: ‘A win’: JobSeekers welcome ‘encouraging’ boost news
Also read: ‘Poverty trap’: Renewed pleas to increase JobSeeker permanently
“With the JobSeeker COVID supplement slated to be reduced from September but continued until at least December, we are incredibly disappointed the Federal Government hasn’t taken this opportunity to lock in a permanent floor to income support that keeps people out of poverty,” said Mission Australia chief executive James Toomey.
“A permanent increase to income support payments would go a long way in injecting more money into the economy and relieve the pressure on organisations like Mission Australia who provide emergency relief and homelessness services,” he said.
“We can’t turn back to $40 a day at the end of the year.
“This will return people to poverty and leave them unable to meet their basic needs, including housing at Christmas and into 2021.”
A recent report by the Australia Institute prior to the announcement of the revised JobSeeker and JobKeeper schemes found that 650,000 more Australians would have been pushed into poverty at the end of September.
Mozo research found that 1.3 million Australians would’ve been unable to afford their homes if JobKeeper and JobSeeker had ended in September.
“As the number of people who are unemployed rises, we urge the Federal Government to commit to permanently lifting income support payments to not only lift people out of poverty, but also ensure they can regain control of their finances, access transport, and other resources to look for work and be job ready,” said Toomey.
Opposition leader Anthony Albanese said he was “very concerned” the government has not increased JobSeeker’s base rate.
“$40 a day is not enough to live on, the current [JobSeeker] rate. And to just say that once we're through this pandemic, it'll just go back to that figure is, in my view, completely unacceptable,” he said.
Shadow Minister for Families and Social Services Linda Burney added that the JobSeeker extension was a “step in the right direction”, but warned about the dangers of a return to the old rate of $565.70 a fortnight.
“A permanent increase is required that will help keep people out of poverty and into secure work. The government’s introduction of the Coronavirus Supplement was a clear acknowledgement that the old Newstart base rate of the payment was inadequate,” she said.
“It trapped people in poverty and stopped them getting work – with many unable to afford things as basic as fresh food, school excursions, clothes or transport costs. Snapping back to the old JobSeeker rate would also threaten our economic recovery and hurt local businesses and jobs.”
PM, Treasurer respond
The prime minister has indicated the government is not currently considering a permanent increase to the base rate.
“That’s not a matter that we’re looking at, at the moment,” Morrison said yesterday.
“We’ve increased JobSeeker significantly through the pandemic and we’re still in the pandemic phase.
“And given that we have no … intention of that going back to the original JobSeeker base payment certainly by the end of December … I would be very surprised if we weren’t to extend it beyond then.”
Speaking this morning on Sunrise, Frydenberg responded to critics of the scaled-back JobSeeker scheme and said it was “not unreasonable” for the government to bring back former requirements for the income support payments.
“Seeking up to four job searches a month I don’t think is unreasonable, engaging with your employment services provider is not unreasonable,” he said.
“We want to give the public who are on JobSeeker the best possible chance of getting into a job.
“The Prime Minister has also announced a couple of billion dollars for additional training and skills programs and that’s going to be a great help to people who may not be in employment today, because we understand they may need to reskill and retrain to find work.”
Business lobby group the Business Council of Australia (BCA) welcomed the JobSeeker boost extension as “a sensible approach”.
“We welcome a sensible and targeted approach to phasing out the critical support which has helped keep people connected to their employers and position us for a strong recovery,” said BCA CEO Jennifer Westacott.
“It is absolutely right for the government to take a responsible approach.
“The continuing temporary payment to JobSeeker recipients is welcome, but at the end of the day most people don’t want to be on welfare, they want a job.”
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, economy, property and work news.
Follow Yahoo Finance Australia on Facebook, Twitter, Instagram and LinkedIn.
