Cuts will plunge millions further into poverty

28 March 2021

ACOSS condemns the government decisions on JobKeeper and JobSeeker that will see nearly 3 million people including one million children plunge into poverty, while those with more, get more.

The end of JobKeeper will see up to 250,000 people joining the unemployment queue – with many seeing their weekly income drop from $500 a week to just $314 per week or $44/day.

From 1 April, JobSeeker will be cut by $50 a week seeing people go from $51/day to $44/day because of the loss of the $75 a week Coronavirus Supplement.

1.3m people on JobSeeker will lose $50 a week. Another 343,000 single parents, mostly women will lose $50/week. The Government’s actions will drive nearly 3 million people, including a million children, into dire poverty.

ANU researcher Ben Phillips showed during the Senate Inquiry into the JobSeeker cuts that before COVID-19, the poverty rate for people receiving Newstart was 88%. When the JobSeeker payments were doubled, this dropped to 26%. From 1 April, poverty will balloon out again to 85%, because payments are almost returning to their pre-COVID rates.

ACOSS CEO Dr Cassandra Goldie said:

“It is a scandal and international disgrace that Australia is back to having one of the lowest rates of unemployment payment in the OECD – the second lowest behind Greece.

“We know from personal testimonies and surveys that the majority of people on these very low income support payments will go back to a daily struggle to feed their families and keep a roof over their head.

“They sink into debt because they can’t pay their energy bills, keep a car on the road or meet unexpected costs for appliances or computers.

“We are facing a homelessness and housing affordability crisis as more people struggle to pay increasing rents.

“With the stronger than expected recovery the Government should have kept targeted JobKeeper support in place for the hardest hit industries – in the Tourism, Hospitality and Arts sectors, instead of a mish-mash of grants and subsidies.

“ACOSS proposed that JobSeeker should be increased to at least $65 per day which would raise it to just above the poverty line.

“It is unconscionable that about 3 million people will return to extreme poverty while people with property will see their investments boom and those on medium to high incomes will reap $2 billion per month in tax cuts between now and the end of September.”