JobSeeker Cut Cruel and Economically Reckless

Australia Institute

The reported Government increase to JobSeeker of $50 per fortnight, expected to be announced today, is inadequate and will see tens of thousands of people fall into poverty at the end of March.

“An increase to the JobSeeker base rate of $50 per fortnight, while cutting the $150 per fortnight increase to JobSeeker supplement for those unemployed over the worst of COVID-19, will mean a $100 cut per fortnight,” said Matt Grudnoff, senior economist at the Australia Institute.

“The Government’s original decision to effectively double the rate of JobSeeker with a $550 per fortnight coronavirus supplement was an admission that JobSeeker is simply not enough to live on. This decision helped lift 425,000 people out of poverty.

“The Government’s subsequent cuts to JobSeeker pushed almost 200,000 people back into poverty, including 50,000 children.

“Make no mistake. This is a cut to JobSeeker and it will push even more people into poverty, including thousands of children.

“It is estimated that this will cost the Budget approximately $9 billion over four years. To put this in context, the tax cuts for high-income earners the Government has announced over the last few years will cost the Budget almost 10 times more ($83 billion) over the same four years.

“Common sense tells us that out of necessity, low income households spend all of their income. At a time when the economic recovery is still weak, this cut to low income households income will remove valuable stimulus from the economy.

“The Government’s decision to cut the incomes of the poorest Australians is both cruel and economically reckless. It is cruel to push tens of thousands more Australians into poverty, including thousands of children. And it is economically reckless because it will take billions of stimulus out of local economies right when the economy is getting back on its feet.

“Poverty and inequality are becoming worse in Australia. Australia is a wealthy nation and as a nation we can afford to look after the poorest households including tens of thousands of children.

“If JobSeeker was restored to its original level when the coronavirus supplement was first introduced, the $80 per day rate would allow unemployed people and their families to live with dignity and avoid being pushed into poverty while looking for work.”

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