I urge the inquiry to reflect on those currently in this position of relying on JobSeeker. I'm living in fear of what my life will go back to once it's cut back. Yes, we live in a country that has opportunity, and that opportunity is not always available for all … Raising the rate to a liveable income will benefit all, and I hope the inquiry will consider the many different situations out there and the difficulties we face trying to live off $43.50 a day.
The Social Services Legislation Amendment (Strengthening Income Support) Bill 2021 will increase the single base rate of the Jobseeker Payment from $40.40 a day to $43.97 a day from 1 April 2021.
The Australian Greens strongly reject the majority committee view that 'the taxpayer-funded increase of $50 to income support payments balances the need to ensure payments encourage and enable workforce participation with the need for the welfare system to be fiscally sustainable for future generations'. It is our view that this Bill does not provide adequate support for unemployed and underemployed Australians to engage in the workforce.
The Government had months to prepare this legislation with the knowledge that the reduced Coronavirus Supplement was coming to an end on 31 March 2021. Yet they chose to introduce this Bill as late as possible in an attempt to suppress debate and dissent. This resulted in a wholly inadequate two-and-a-half-hour hearing being held with limited time to hear from people with lived experience and key community groups. The limited time for hearings also meant we did not hear from a variety of people who will be directly impacted by this Bill including unemployed workers, disabled people, single parents, young people, and migrants and asylum seekers.
This Bill introduces the first real permanent increase in the Jobseeker Payment since 1994. The Australian Greens are deeply disappointed in the lack of time provided to consider and scrutinise such a significant change to Australia’s social security system.
Impact of this Bill on Australians
The introduction of this Bill will mean that Jobseeker recipients who have experienced the benefits of a payment for 6 months over the poverty line will now be condemned to living far below the poverty line. This is going to have a devastating impact on people across Australia.
At the inquiry hearing, we heard from Ms Julie Stephen who has been receiving Jobseeker (previously Newstart) since 2008. Ms Stephen shared her personal experience of living on Jobseeker Payment:
I'm a really determined woman and I've tried my best to stay away from welfare. And it is not a nice experience. It's not easy to get up and show up every day and make out you're okay when inside you just feel like you're worthless. It's isolating and it's confidence stripping. Basically, it is very hard work. I'm not a dole bludger. I'm a woman in her 50s whose situation changed because she had a hysterectomy operation.
I'm really worried that we won't survive when it cuts back to $43.50 a day, and my worst fear is that I will need to sell my house with no hope of starting my business or finding affordable rent.
Ms Stephen also explained how her health and wellbeing will be impacted when the Coronavirus Supplement ends:
I'll definitely have to forgo my healthy holistic treatment that I've been taking, like vitamins and aloe vera juice. I'll definitely have to forgo going out and using my car too much, because I won't be able to afford the petrol. I definitely won't be going and meeting up and having a coffee anywhere, unless my friends shout me. And maintenance on the house, well that's just a no-go. It's a no-go now, really. I don't buy clothes. If I do buy something, it's usually at the op shop. Food—my cholesterol went up last time because I was just eating lots of pasta and starchy foods. It's expensive to buy fresh fruit and [vegetables]. So, yes, things will change a great deal.
Dr Cassandra Goldie, Chief Executive Officer, Australian Council of Social Service, also articulated the impossible decisions people will be forced to make when Jobseeker Payment is reduced to $44 a day:
What people need is for you to give people a sense of hope and that, as a very wealthy country, we will do the right thing to at least provide the basic support of a level of income, so that people can then try to get ahead—whether those decisions are about how to continue to deal with the situation Julie's dealing with or whether it's about a decision of: 'Do I need to move, because I can't get a job where I live now? Do I need to sell my house? Do I need to change my children's school?' All these are terrible decisions that people will have to make. The one thing that you can do is at least give people basic economic security…
A $25 a week increase to the base rate of Jobseeker Payment and Youth Allowance will not lift Australians out of poverty, it condemns them to further poverty. The committee received submissions from hundreds of individuals and community organisations noting this move will return Australians on income support payments to living in poverty.
The Aboriginal Peak Organisations Northern Territory explained the significant impact the Coronavirus Supplement had on remote communities including enabling people to buy healthy food, purchase essential items for households, provide additional support for schooling, and participate in cultural activities. Ms Leanne Caton noted:
This proposed increase of just $3.57 per day is wildly inadequate and a slap in the face to those who receive income support, including many Aboriginal Territorians.
The Australian Greens are strongly concerned that the reduction in income support payments, coupled with a continuation of the punitive Community Development Program, may result in greater numbers of First Nations peoples dropping out of the social security system altogether. As Professor Jon Altman noted:
Francis Markham and I estimated that not only did ‘no show no pay’ penalties result in a decline of income support payments by 4.5 to 6.0 per cent, but it also resulted in CDP participants disengaging from the income support system placing additional financial burden on their immediate families. We noted in this earlier submission that deep poverty has been statistically linked in the NT to lower life expectancy, so returning Indigenous people in remote Australia to deep poverty will potentially have dire implications.
Impact of this Bill on poverty and the economy
By keeping income support payments below the poverty line, this Government is wilfully choosing to condemn Australians to living in poverty.
The poverty rate for households whose main source of income is allowances dropped to 26% following the introduction of the $550 a fortnight Coronavirus Supplement. Researchers estimate the poverty rate for these households will skyrocket back up to 85% after this Bill is introduced.
The Australian Unemployed Workers Union noted that poverty is a policy choice being implemented by the Government:
We are a prosperous society, yet the government forces millions to rely on poverty payments. Their plan is for 5–6% unemployment, which will leave about a million people and their kids stuck on unemployment payments. It is their responsibility to make sure everyone has enough to cover the basics.
The Government is choosing to entrench poverty while handing out tax cuts to billionaires. This was highlighted by Dr Cassandra Goldie:
Can I also highlight that anybody who suggests that this is an issue about fiscal responsibility completely ignores that the Australian parliament has legislated to deliver billions in tax cuts to people who already have jobs. Overwhelmingly those dollars will go to wealthier men who already have jobs. These are the choices the Australian parliament is making today.
At a time when the Government should be focusing on economic recovery, they are making choices that will slow down our recovery from the recession.
Researchers at the Grattan Institute estimate that the Government’s plans to cut the rate of Jobseeker Payment by $50 a week will remove $5 billion from the economy over the next year and result in up to 40,000 fewer jobs. We also know that millions will be ripped from the retail sector as people on income support payments spend an estimated 58% of their payments on retail goods or services.
The evidence is clear – there simply aren’t enough jobs for the number of unemployed and underemployed Australians.
The AUWU explained there were 60 people on unemployment payments for every entry level job advertised in January:
There are 1,371,563 people on unemployment payments. As 31 March looms it is expected that hundreds of thousands more people will be pushed on to these payments when JobKeeper ends. There were 60 people on unemployment payments for every entry level job advertised in January 2021.
Anglicare Australia also noted the actual rate of joblessness could be higher than we realise:
At the time of writing, just over 1.23 million Australians are receiving JobSeeker payments. These jobseekers are competing for just 175,100 job vacancies. Anglicare Australia notes that over 1.12 million people are underemployed and seeking further work. Many will be competing for the same vacancies. We also note that the actual number of people without work may be masked by the JobKeeper scheme, which is due to be cut at the same time as the provisions in this Bill are enacted. The actual rate of joblessness could be much higher than we realise.
Instead of supporting unemployed and underemployed Australians to find work, the Government is peddling the myth that higher unemployment payments will create a disincentive for people to find work.
The Australia Institute and Centre for Future Work recently compared unemployment payments and work incentives among 33 OECD countries and found countries with higher unemployment payments are more likely to have lower unemployment rates:
It also shows that there is no statistical relationship between a nation’s rate of unemployment and the level of their unemployment benefits. This analysis refutes the argument that by providing unemployment benefits commensurate with a dignified life, free of poverty, governments will be disincentivising the unemployed from seeking work.
Even when the rate of Jobseeker Payment was doubled following the introduction of the Coronavirus Supplement, there was little change in the proportion of unemployed Australians who found work each month, or in the rate of advertised job vacancies.
The Australian Greens strongly refute the Government’s claims that a higher rate of Jobseeker Payment would act as a disincentive to find work. In reality, keeping people in poverty entrenches disadvantage and acts as a barrier to finding work.
Impact of this Bill on the social services sector
The committee heard from countless organisations who are concerned that demand will only continue to climb after the cut to Jobseeker Payment is introduced.
St Vincent de Paul noted there was a 75% decrease in calls for help when the $550 Coronavirus Supplement was in place:
In 2020, more than a third of people who sought assistance from Vinnies NSW were receiving JobSeeker or its predecessor Newstart, and about half of them needed help to buy food. When the full COVID Supplement was being paid, calls for help from people receiving JobSeeker dropped by 75 percent.
However, demand for help from people receiving unemployment benefits has climbed back up each time the Coronavirus supplement was reduced. People receiving JobSeeker should not be forced into a position where they require help from charities to get by.
There is strong agreement among financial counsellors that demands for assistance will now increase:
Indeed, there is unanimous agreement among financial counsellors and emergency relief agencies polled by Anglicare Australia that further cuts will lead many more clients to financial distress.
The sector has also expressed concerns about the impact of the cuts on vulnerable children, adults and families and the flow on effects on organisations delivering family and relationship services.
Australians have a right to access a strong social safety net. The Government is currently failing its responsibility to provide an adequate standard of living to people receiving income support payments. It shouldn’t be up to community service organisations to provide the support that Government won’t.
Mutual obligations will only hurt people
The changes introduced to mutual obligations will only serve to hurt Australians on income support payments. It is deeply disappointing that the Government has tied a permanent increase in the base rate of working age payments with increased punitive compliance measures.
We echo the concerns of organisations and individuals across Australia regarding the introduction of more onerous mutual obligations, job application audits and a hotline that allows employers to report Jobseekers.
As the Human Rights Law Centre noted:
The introduction of more onerous mutual obligation requirements serves no valid purpose. People will only be more successful in applying for jobs when there are more job opportunities available, in industries and at skill levels appropriate to their circumstances. Tougher requirements and harsher penalties will only see more people struggling to make ends meet, and further entrench the cycles of disadvantage that lead to longer-term needs for social security.
Industry groups have also expressed concerns about the jobseeker hotline. The CEO of the Australian Retailers Association, Mr Paul Zahra, noted they haven’t had many positive conversations with retailers about it and they believe it will drive anxiety.
It is well known that being on Jobseeker is harder for disabled people. The Australian Greens are particularly concerned about how sick and disabled Jobseekers are going to be able to meet these increased mutual obligation requirements.
Conclusion
The Government had an opportunity to provide an adequate, permanent increase to Jobseeker and related payments to lift Australians out of poverty. The pitiful increase of $25 a week, which is in effect a cut from the current rate of Jobseeker Payment, is cruel and mean spirited.
This inquiry did not provide adequate answers as to why the Government chose the dollar figure of $25 a week. It appears to be an arbitrary choice driven by the absolute bare minimum the Government could get through Cabinet. This decision will have a huge impact on millions of Australians and their families by locking in poverty and inequality.
Australia is a wealthy country; we can afford to set income support payments above the poverty line. The Australian Greens urge the Government to provide a permanent increase to Jobseeker and related payments so that they are above the poverty line.
Recommendation
The Australian Greens recommend that the bill be amended to increase all income support payments to $1115 a fortnight, which is in line with the Henderson Poverty Line.
Recommendation
The Australian Greens recommend that the bill be amended to retain the current income free threshold of $300 a fortnight.
Recommendation
The Australian Greens recommend that compulsory income management be abolished.
Recommendation
The Australian Greens recommend that Mutual Obligations be abolished.