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Unemployed Australians will receive $100 less a fortnight after Scott Morrison announced a three-month extension to the jobseeker coronavirus supplement but at a reduced rate.
The prime minister told reporters in Canberra the supplement, which was due to expire in December, will be cut from $250 to $150 a fortnight and extended to March at a cost of $3.2bn.
He gave no commitment that “elevated and temporary” economic support would continue, arguing that jobs are returning to the Australian economy and the government can’t allow the “lifeline [to] hold Australia back as we move into the next phases of recovery”.
There is widespread concern within the welfare sector that the old jobseeker rate of $40 a day is inadequate, and the business sector warns that removing the coronavirus supplement will cost jobs.
But Morrison has been under pressure from Coalition backbenchers who believe the elevated rate of jobseeker and the jobkeeper wage subsidy are putting people off returning to work and running up the deficit.
The cut to $150 a fortnight from January is the second cut to the coronavirus supplement, which originally doubled jobseeker with an extra $550 a fortnight in March before being slashed to $250 a fortnight in September.
Morrison said the government’s first instinct when it doubled jobseeker had been to “cushion the blow” of the Covid-19 recession but it now wanted to have the “right settings in place” to support employers who “are looking for people to come back” to work.
“We cannot stay stuck in neutral in this country, we have got to keep moving forward,” he said, arguing that cuts to jobkeeper had helped businesses “graduate” from needing economic support.
The social services minister, Anne Ruston, added that the government would extend measures to increase eligibility for jobseeker.
These include the ability for a jobseeker to earn up to $300 a fortnight or for their partner to earn up to $80,000 a year before a person loses jobseeker, and shorter waiting periods.
Morrison said no decision had been made about the rate of jobseeker beyond March “but right now what matters is the supports that will continue to be provided at these elevated and temporary levels”.
He said the government had restored “mutual obligations” to jobseekers, including the requirement that they search for work. Between August and October some 260,000 jobseeker payments were suspended because people failed these requirements.
Despite Morrison’s claims that “jobs are returning”, unemployment nudged higher to 6.9% in October, with 29,500 more people out of work.
The Reserve Bank of Australia still expects unemployment to peak at a little below 8% by the end of 2020, with “a very high level of spare capacity in the labour market” until unemployment gradually declines to 6% in 2022.
Labor’s shadow treasurer, Jim Chalmers, has argued that the reserve bank has cut interest rates to a record low 0.1% because the government has not done enough to help 1 million unemployed Australians back into work, with “another 160,000 expected to join them between now and Christmas”.
Morrison said in the latest October statistics job advertisements had “doubled” in comparison with March, the onset of the Covid-19 recession.
In September the Australian Council of Social Services calculated that there were still 13 jobseekers for every vacancy; while Anglicare puts the figure at eight disadvantaged jobseekers for every entry-level position.
In June Guardian Australia revealed claims that jobseekers were turning down work were based on a handful of responses from among 2,324 surveyed employers.
Welfare groups have reported that increasing jobseeker has made a “striking difference” to rates of poverty in Australia, while economists agree the budget can afford a permanent increase.
Asked about the adequacy of payments, Morrison replied: “That is why we are extending jobseeker.” He pointed to other measures to help people into jobs, including the jobmaker hiring credits program.
Ruston cited more than $200m in support to emergency relief and food relief providers as another element of the social safety net.
Source: The Guardian
Keyword: Jobseeker Covid payment extended till March but will be cut to $150 a fortnight | Welfare