For years Australian policy makers have grappled with ways to eliminate poverty. Then the coronavirus came along and they managed, for a short time, to eliminate poverty by accident.
In response to the pandemic, the federal government temporarily doubled the JobSeeker unemployment allowance via the $550 a fortnight Coronavirus Supplement, and this raised the benefit above the poverty line:
However, the Coronavirus Supplement was reduced in late-September and again at the beginning of January, lowering it to just $100 a fortnight currently. This means that JobSeekers now receive a payment of $715.70 a fortnight for a single person with no children, equating to only $51 a day.
Worse, the Coronavirus Supplement is scheduled to be axed completely from 1 April, thus lowering the JobSeeker payment to a paltry $565.70 a fortnight, or just $40 a day. This compares to the Aged Pension rate of $860.60 a fortnight, or $61.50 a day.
In turn, millions of Australians will again be thrown back into poverty.
The solution to poverty is actually very simple and is illustrated clearly in the above chart: bring the JobSeeker payment up to parity with the Aged Pension and the poverty line.
There is simply no reason why people on JobSeeker should be paid a lower rate than those on the Aged Pension – many pensioners of whom are wealthy due to owning their home.
Allowing JobSeeker to fall back to its poverty level of $40 a day would also be economically harmful and self-defeating, as it would dampen domestic demand.
It would ensure a slower economic recovery, higher unemployment than necessary, and increased financial suffering and homelessness.
Permanently lifting JobSeeker to parity with the Aged Pension should be a national economic and social priority.