As we reported yesterday, the Morrison Government has announced a $50 a fortnight lift in the base JobSeeker rate, which will lift base payments to the unemployed by $3.60 a day to around $44.
The increase is scheduled to come into effect on 1 April 2020 and will cost the federal budget around $9 billion over four years. However, because the $150 a fortnight Coronavirus Supplement will be removed at the same time (end-March), those currently unemployed will effectively receive a $50 a week ($7.14 a day) cut in income.
After the announcement, I claimed the new rate of JobSeeker would still be among the lowest unemployment benefits in the world, would throw 1.3 million currently unemployed Australians into poverty, and would be $17.50 a day less than what single aged pensioners receive ($61.50 a day).
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Moreover, because JobKeeper will also be abolished at the same time, a million more Australians could be thrown onto JobSeeker, living on just $44 a day.
Today, the Grattan Institute has released the below chart illustrating how the new permanent rate of JobSeeker compares against official measures of Australia’s poverty line:
Grattan estimates that the new JobSeeker rate would be “$138 below the relative poverty line”, whereas the “gap between the payment and the Henderson poverty line is even bigger”.
Grattan also shows that the new rate of JobSeeker will be only “41 per cent of the minimum wage”, and it will fall to just “66 per cent of the pension”, down from “89 per cent of the single pension” in 2000:
Moreover, even after the increase, Australia’s unemployment benefits will be the second lowest in the OECD, only ahead of Greece:
To add further insult to injury, JobSeeker will continue to be pegged to inflation (the Consumer Price Index). This is at odds with the Aged Pension, which rises by the greater of male wages, CPI or the pensioner cost of living index.
Therefore, the gap between JobSeeker and the Aged Pension will continue to increase over time.
MB strongly believes that JobSeeker should have been pegged to the Aged Pension level of $61.50 a day. There is simply no reason why unemployed Australians should receive less welfare assistance than pensioners, many of whom own their home and are ‘asset rich’.
Cutting JobSeeker back to only $44 a day is both cruel and will hamper Australia’s economic recovery.