JobSeeker cuts will hammer economy

MB has spent a lot of time focusing on the ‘fiscal cliff’ facing Australian households once emergency income support is wound back from October, specifically:

JobKeeper will be reduced from $1500 to $1200 ($750 part-time); and
JobSeeker will be reduced from $1100 to $815.

This ‘fiscal cliff’ is illustrated nicely below by the Grattan Institute, which estimates that these changes will reduce income support from $18 billion a month (10.7% of monthly GDP) to $3 billion a month (1.9% of GDP) for the six months beyond:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.