More bold policy action needed to recover jobs and incomes – ACOSS on Economic Statement

ACOSS says the Federal Government’s Economic Statement released today shows the positive impact that decisive government action has had in preventing further job losses and cushioning the financial impact of the pandemic on households and the economy. Further bold action is needed now to generate jobs and to provide certainty for those with low incomes in order to prevent further recession.

Australian Council of Social Service CEO Dr Cassandra Goldie said:

“Today’s statement shows that bold government action averted even deeper economic pain, but also spells out the ongoing depth of the crisis, with 700,000 jobs lost and unemployment to reach 9.25% in December. The Government’s plans need to respond to the scale of the health, economic and social crisis we must continue to confront.

“The statement confirms the depth of the crisis we face and the likely persistence of high unemployment into 2021. This news will be hard to take for many people who don’t have paid work and are looking for the light at the end of the tunnel.

“Three months ago the Government acted quickly and boldly to set up the income supports – JobSeeker and JobKeeper – that have saved many jobs and kept food on the table and a roof over head for millions of people.

“Instead of cutting JobSeeker Payments by $300 per fortnight, the Government must permanently secure the basics, including incomes and housing; create jobs and restore employment, avoiding another recession. This requires the certainty of a permanent, adequate increase to the JobSeeker payment, and public investment in job-creating projects like building housing for people with low incomes, retrofitting homes to reduce energy bills and carbon emissions, and funding for care services that are in high demand.

“Taking action to create jobs requires public investment. The cost of this action is much less than the cost of failing to take it, which would put the nation at great risk of slipping into a deeper, longer recession.

“We also need the Government to scale up training for people for the jobs that will become available in the recovery phase, which for many won’t be the same as the ones they had before, and to stem the inexorable rise in long-term unemployment. There are already 700,000 people on JobSeeker and Youth Allowance for over a year, and this is likely to increase to over a million people next year if we don’t act now. In addition to much-needed economic stimulus, the government should announce a jobs and training guarantee for young people unemployed for over 6 months and those over 25 years old unemployed for over 12-24 months.

“It is important that the Government avoids wasteful policies which will not help us out of unemployment crisis, like bringing forward tax cuts that mainly go to people with high incomes.

“The burdens of the present crisis must be shared fairly. Bringing forward tax cuts for those with the highest incomes while cutting income support for those with the lowest would be grossly unfair. The slated ‘Stage 2’ tax cuts go mainly to people earning more than $100,000 per year and would cost the budget about $16 billion per year. This makes no economic sense. Throughout the crisis, people with higher incomes have been saving their money; while those with low incomes have been propping up the real economy, showing the great value the doubling of the JobSeeker payment has had. The reality is that people with low incomes have no choice but to spend payments straight away in order to survive day-to-day.

“It is immeasurably better to use government revenue on guaranteed job creation – such as low income housing, reducing energy bills, care services like aged and disability care, as well as permanent increases to social security to protect incomes – rather than wasting public revenue on allowing people on higher incomes to save through high-end tax cuts,” Dr Goldie said.