The latest Treasury figures forecast the jobless rate will double in the June quarter from 5.1 per cent to 10 per cent – with almost 1.5 million out of work – prompting welfare agencies to call on the federal government to permanently increase the JobSeeker (Newstart) payment.
In March, in response to the pandemic, JobSeeker was doubled, rising from $550 to $1100 with a time limit of six months. Initially the temporary measure was applauded but as unemployment numbers skyrocketed and the economic reality sank in, calls for the JobSeeker rate to be raised permanently have grown louder by the week.
CatholicCare Social Services Hunter-Manning director Gary Christensen says the pre-coronavirus Newstart allowance was completely insufficient for people to live on and should have been raised years ago. “The pandemic has led to record numbers of unemployment and tens of thousands of people facing incredibly difficult times financially and otherwise,” he said.
Treasury figures show almost half of Australia’s pre-COVID-19 workforce is now on a government payment, with five million people on the JobKeeper allowance and 1.4 million on JobSeeker.
Mr Christensen says people are under enormous financial pressure and are likely to continue to be for a long period of time. “This will mean governments need to be looking at providing increased funding in a whole range of areas including mental health services, community housing and for individuals and families who have lost their livelihoods – not cutting financial support back,” he said.
Catholic Social Services Australia deputy chief executive Joe Zabar says welfare organisations are becoming increasingly concerned about the September finish date set by the government.
“Halving JobSeeker and cutting JobKeeper altogether at the end of September would be a calamity for millions of people,” he said. “For those on JobSeeker, aside from having to once again survive on $40 a day, it will also mean a return to ‘activity tests’ where there is a requirement to apply for jobs that often won’t exist due to social distancing and government restrictions.”
The Reserve Bank made a similar observation in its quarterly statement last month: “The outlook for the domestic economy depends on how long social distancing remains in place,” it said.
Birmingham Gardens resident Kagombe migrated to Australia from Africa two years ago with his family and receives general assistance from CatholicCare and DARA. He learnt English, completed several TAFE courses, and was close to securing a job before the pandemic struck.
“I’m on JobSeeker and I’m looking for a job anywhere but it’s very hard now because of the virus,” said Kagombe. The $550 supplement is a big help, but he still can’t afford some essential household items. “I don’t have a fridge and the washing machine recently broke down.”
Life is challenging with the JobSeeker supplement, so it’s hard to imagine how Kagombe and his family will manage without it, especially if the job market continues to deteriorate.
Labor Party spokesperson for families and social services Linda Burney says it is a “recipe for disaster” for the Newstart allowance to revert back to $40 a day in September. She is calling for the government to release modelling figures showing the potential economic shock that would result from the move. Australian Council of Social Service (ACOSS) chief Cassandra Goldie says the government must retain the JobSeeker supplement to ensure those without paid work can cover the basics – food, housing, electricity.
St Vincent de Paul Society National Council chief Toby O'Connor joins ACOSS in urging the federal government to permanently raise JobSeeker and is also calling for an inquiry into the adequacy of the Commonwealth Rent Assistance Program and Youth Allowance.
In a sign this issue has broad support, Business Council of Australia chief executive Jennifer Westacott threw her support behind the welfare agencies.
"There's no doubt the (pre-COVID-19) JobSeeker payment is too low,” Ms Westacott said. “But we also have to make sure we don't just increase the allowance. We have to make sure the system moves to a demand-led program where people can see the jobs.”
To date, the Morrison government has not been receptive to extending increased welfare benefits beyond September.
“Australians know there is no money tree. What we borrow today, we must repay in the future," Treasurer Josh Frydenberg said in the May budget update speech. “Temporary and targeted, the new spending measures were not designed to go forever but to build a bridge to the recovery phase."
Millions are now praying that bridge isn’t pulled down too early.