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The government announced this week it would boost the base rate of JobSeeker by $50 a fortnight once the Covid-19 supplement ends. Welfare advocacy groups warn such a token amount will only throw the unemployed into abject poverty. By Rachel Withers.

JobSeeker increase ‘a disgrace’

Minister for Employment Michaelia Cash in the senate on Thursday.
Credit: AAP Image / Mick Tsikas

On Tuesday, those holding out for a substantial increase to the base rate of JobSeeker were delivered a crushing blow. The government announced a $50 a fortnight rise once the coronavirus supplement expires – well below the figures proposed by welfare advocates, business groups and economists.

The increase, which will see the rate rise from about $40 to $44 a day, is reportedly the “bare minimum” that could satisfy public demand – the lowest figure the government believed would be palatable. Labor, the Greens, business, union and welfare advocates have condemned the increase as inadequate. Groups have also raised concerns about plans to establish a hotline to “dob in” unemployed Australians who refuse job offers, which was announced alongside the new rate.

From April 1, the JobSeeker base rate will be raised to $615.70 a fortnight. While this is up from the pre-pandemic rate of $565 a fortnight, it will be $100 below the $715.70 recipients are currently receiving, and far below the $1115.70 provided at the peak of the Covid-19 pandemic. The $50 a fortnight base increase will also be applied to the youth allowance, Austudy, ABSTUDY and parenting payments, all of which will also lose the $150 coronavirus supplement at the end of March.

According to Peter Whiteford of the Australian National University and Bruce Bradbury of the University of New South Wales, the new rate will bring Australia’s welfare payment up from the lowest in the OECD to the second lowest, after Greece.

There have been some concessions. The government has announced the waiting period will continue to be waived until June 30, while the income-free area – the amount of income someone can receive before it affects their payment – will be increased to $150, a “greater incentive”, according to Social Services Minister Anne Ruston, for people to “put their toe in the water and test their opportunity in the jobs market”. However, mutual obligations will be increased, with jobseekers required to attend face-to-face job service appointments and to apply for a minimum of 15 jobs a month, increasing from July 1 to the pre-pandemic level of 20 jobs a month.

Hopes of a long-awaited boost to the support payment had grown in the weeks leading up to the announcement, with reports that the Treasury was providing advice to the government on a “range of options” for the payment when the coronavirus supplement ended. Prime Minister Scott Morrison had even confirmed the government was “still considering” an increase.

Treasurer Josh Frydenberg also hinted at a raise. “We want all Australians to live with dignity,” he said on ABC Radio last week, but conceded the rate might not be as high as anticipated. Welfare groups had been joined by Labor, the Greens and the Reserve Bank of Australia in calling for an increase on the pre-pandemic rate. The Greens have backed the Australian Unemployed Workers’ Union campaign for $80 a day, while the Australian Council of Social Service (ACOSS) was calling for at least $65 a day. In Australia, the poverty line is considered to be somewhere between $58.29 and $77.56 a day, depending on the definition.

For its part, Labor has refused to nominate what figure it sees as appropriate, although some opposition backbenchers voiced support for a $75 a week increase before the pandemic. Even some Coalition MPs have called publicly for a boost, with Nationals MPs Anne Webster and Barnaby Joyce and Liberal MP Russell Broadbent acknowledging the existing rate was unlivable. Former prime ministers John Howard and Tony Abbott have also previously called for a permanent increase.

The government has framed the raise as generous, while still low enough to incentivise work. Morrison told a press conference it was the largest year-on-year increase to the payment since the mid-1980s. “But I think the more relevant feature to focus on is its percentage of the minimum wage,” he said, noting it was being brought from 37.5 per cent to 41.2 per cent – “commensurate with what it was during the Howard government.”

Morrison said the increase would cost an extra $9 billion over four years – too much, according to one member of the party room, reportedly – and called it a “contract with Australians and Australian taxpayers”. He said, “Australian taxpayers believe in this system – I believe in this system – and they know it is important for many people who really need it.” Both the prime minister and the Social Services minister, Anne Ruston, have pointed to the other supplements and allowances paid to some welfare recipients as a way of claiming the base rate isn’t the only thing that counts.

They have not been able to persuade welfare advocates of this. In a statement, ACOSS called the increase “a heartless betrayal”, with its chief executive, Cassandra Goldie, saying the government had “missed its opportunity to be a government that stood for human decency”. GetUp!’s national director, Paul Oosting, said $50 a fortnight was “throw[ing] people on JobSeeker some crumbs and call[ing] it a raise”. The president of the Australian Council of Trade Unions, Michele O’Neil, said it was “manifestly inadequate”, arguing $44 a day is not enough to live with dignity – let alone pay rent, eat or look for work.

“Bringing welfare back to Howard levels is a disgrace,” Australian Unemployed Workers’ Union spokesperson Kristin O’Connell said. Meanwhile, the percentage-of-the-minimum-wage figure does not account for real-time cost of living, with the minimum wage not having kept up with cost of living either. Goldie said we should be ashamed, rather than proud, of the fact this was the first real increase in 27 years.

The rise, which the AUWU says is a cut in real terms, also comes with an increase in mutual obligations, at a time when there are roughly 1.4 million people on unemployment payments and just 160,000 jobs advertised on Seek.

When outlining the mutual obligations, Employment Minister Michaelia Cash also announced the establishment of a new “employer reporting line”. It would be used to report those who “are not genuine about their job search or decline the offer of a job” so her department can “follow up” and cancel their support if they do not have a valid reason for turning down work. Cash claimed “you often hear” that jobseekers regularly turn down jobs, but she failed to provide any evidence to support this.

“The figures are just incredibly low of people who actually turn down work,” Kristin O’Connell of the AUWU said. “People are desperate for work. Because living in poverty is not good.” The most recent jobseeker compliance data from the Department of Education, Skills and Employment appears to support this statement – there were only 114 financial penalties for work refusals in the first half of 2020, with 1.1 million people in employment services.

O’Connell is concerned the hotline “will enable job agencies to collude with dodgy employers”. She said it will allow employers to take advantage of jobseekers – offering them inadequate pay and conditions and threatening to report them if they say no. “Jobseekers are allowed to say no to work,” she said.

Goldie said the hotline would encourage people to turn on each other when they are at their most vulnerable. The government should instead be asking employers to work with community services and leaders on opening up job opportunities, she said. “We need a culture of collaboration in Australia, not a culture of fear and abuse.”

On Wednesday afternoon, a Greens motion calling on the government to increase the JobSeeker rate to be above the poverty line passed in the senate, backed by Labor. But the government has said the increase is “take it or leave it”, insisting it won’t budge on the $615.70 a fortnight figure. In the end, Labor is likely to vote in favour of the government’s figure, with an opposition source saying that “any rise is better than nothing”.

But in some ways, said welfare advocates, the increase is actually worse than nothing. “If [Tuesday] hadn’t happened, if this announcement hadn’t happened, I genuinely believe that we would have more hope [of getting an adequate rise to JobSeeker],” said O’Connell. “What they did [on Tuesday] was not only rip away hope for people to have a meaningful increase, but they’ve also introduced these new brutal measures that are going to weaponise our fear.”

Despite the disappointment, Goldie believed this was an opportunity to mobilise. “This has only further brought together people who are committed to the kind of Australia we want.”

This article was first published in the print edition of The Saturday Paper on Feb 27, 2021 as "More is less".

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Rachel Withers is the contributing editor of The Monthly Today.