Despite the deepening economic crisis and economists agreeing that there is little hope of a quick rebound, the federal government has decided those with the least should manage with less.
Prime Minister Scott Morrison announced on July 21 that the JobSeeker coronavirus supplement will be reduced from $550 a fortnight to $250 a fortnight from the end of September. This will take the daily payment rate to $59 a day (down from $80).
He also said the JobKeeper subsidy will be cut from $1500 a fortnight to $1200 a fortnight for full-time workers and $750 a fortnight for part-time workers.
These changes to people’s livelihoods will disproportionately impact low-income workers, who are already struggling to make ends meet during the COVID-19 pandemic. It will affect women worse because they make up more of the part-time workforce.
The number of unemployed people has hit a 22-year high and the country is on course for its first recession in nearly three decades. Nearly 1 million people are out of work and changes to the pandemic supplements will not help, say unions and welfare groups.
The JobSeeker changes will allow people to earn up to $300 a week without the payment being affected from the end of September. But this is hardly generous. Centre for Future Work senior economist Alison Pennington pointed out it is a “blatant admission” by government that unemployment benefits will be used to “subsidise and expand low-wage precarious work”.
Australian Council of Social Service (ACOSS) spokesperson Cassandra Goldie said the cut to JobSeeker will have a severe impact on millions. “It means from September 25, a person on JobSeeker will lose $300 per fortnight or $150 per week, and face the prospect of a further cut just after Christmas.”
ACOSS is calling for the full coronavirus supplement to be “maintained until it is replaced with a permanent, adequate increase”.
The government has only committed to extend it to December 31, meaning that the prospect of returning to surviving on $40 a day is a major concern for many.
Goldie said while the government’s relaxation of JobSeeker income tests is “welcome”, it provides little benefit while jobs are scarce. ACOSS estimates that 13 people on JobSeeker apply for every one job available.
She urged the Coalition government not to bring forward its promised tax cuts which, she said, “would mainly benefit people earning more than $100,000 per year”.
The tax cuts would do “nothing to help the millions in desperate financial need” Goldie said, adding “their economic impact would be minimal as evidence from the last round of cuts showed”.
While she supports a greater targeting of JobKeeper, Goldie said it “needs to be very carefully calibrated”.
ACOSS is also unhappy the government has not closed any gaps in the scheme: temporary migrants and international students still do not have access to JobKeeper, JobSeeker or Medicare.
“What we needed from the government today was an adequate, permanent fix to income support, not a temporary, lowered extension,” Goldie said.
The Australian Council of Trade Unions (ACTU) questioned the justification for cutting JobKeeper payments, especially to those working fewer than 20 hours, many of whom are very low paid, having lost second and third jobs.
ACTU secretary Sally McManus described the decision as “misguided” and said its plan will “cause financial hardship to huge numbers of working people”.
She said the government may have “delayed the economic catastrophe that would have resulted from pushing these programs off the cliff during the pandemic”, but that there needs to be “far-reaching government investment” to “create the jobs we will need to rebuild the economy”.
“The increase of the income-free threshold to $300 for JobSeeker is welcome, but the reintroduction of mutual obligations is a worrying return to the punitive approach to welfare payments which we hoped the Morrison government had left behind,” McManus said.
Socialist Alliance councillor Sue Bolton told Green Left: “It’s amazing how much money the Coalition government found when it wanted to and how quickly it can turn off the tap.
“It would not raise the dole to livable levels six months ago, but suddenly found billions for the various coronavirus packages when the health and political crises hit.
“Now, as the recession starts to bite, and Victoria has had to return to lockdown, the federal government thinks it can wind back support for those who need it most.
“It’s good that working people have forced the extensions to these programs, but we must continue to campaign against the cuts and restrictions, especially as tax cuts and other handouts continue to flow to the rich.
"In addition, some companies, such as the supermarket giants, Harvey Norman and big logistics corporations, have made extra profits out of the pandemic. They should be forced to pay more tax.
“This will only happen, however, if we continue to organise to ensure working people, and especially the unemployed, are not left behind.”
Bolton said the Socialist Alliance supports a secure income guarantee, and an end to exclusions, waiting periods, cashless debit cards and “mutual obligation” activities when it comes to JobSeeker.
Australian Greens’ leader Adam Bandt has also criticised the cuts. He pointed out that the proposed extended schemes are still $44 billion under budget, meaning there is no excuse to cut it back further. He said the government should be expanding the jobs payment to all workers who need it.
Bandt also criticised Labor leader Anthony Albanese who seemed more concerned with about 900,000 workers who have received a little bit more on the JobKeeper program than before the pandemic. Albanese complained on ABC Radio National Breakfast on July 21 that this would have added billions to the public debt.
Anglicare Australia has added its support to calls to support the estimated 1.6 million people who are locked out of work, as well as the thousands who were out of work and living in poverty before the pandemic hit. It says the JobSeeker rate should be raised to above the poverty line permanently.
Anglicare spokesperson Imogen Ebsworth said: “People will be recovering from this pandemic for months and years to come. They need certainty. That means a permanent increase — not a delayed cut-off.
“Instead of helping people plan for their future, these changes will simply ‘phase-in’ poverty,” she said.