Cutting the coronavirus supplement will push many to the brink

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The Morrison government’s decision to cut the JobSeeker coronavirus supplement down to just $150 per fortnight will throw hundreds of thousands of Australians back into poverty.

Two different sets of modelling were released on Wednesday showing that the cuts, announced by the government last week and set to come into effect from January 2021, would be disastrous for many Australians who had come to rely on the payment.

Figures from The Australia Institute revealed that the decision would push an additional 190,000 below the poverty line, while Australian National University (ANU) modelling revealed a much worse fate, with 330,000 people expected to fall below the line.

The coronavirus supplement will be extended beyond the current 31 December cut-off, for a further three months but at a reduced rate of just $150 per fortnight, down from the $550 a fortnight when it was first introduced, and $100 a fortnight less than the rate at which it has been paid since 25 September.

The Australia Institute’s state-by-state breakdown shows the cut to the supplement will see:

  • 53,000 more people in Queensland pushed into poverty
  • 52,000 more people in Victoria pushed into poverty
  • 51,000 more people in New South Wales pushed into poverty
  • 19,000 more people in Western Australia pushed into poverty
  • 12,000 more people in South Australia pushed into poverty
  • 5000 more people in Tasmania pushed into poverty.

The Australia Institute’s Matt Grudnoff said that government risked undoing all the good work that helped many Australians through a difficult time.

“The JobSeeker supplement has been the only thing standing between many recently jobless Australians and poverty,” Mr Grudnoff said.

“(Reducing) the JobSeeker supplement will result in hundreds of thousands of Australian families being pushed below the poverty line – it means a struggle to put food on the table, to pay rent or service mortgages, and it will cause acute pressure on people in an already turbulent time. 

“No other government has ever lifted so many people out of poverty so quickly than the Morrison government did with the coronavirus supplement.”

He said the supplement had been an essential part of the response to the recession that had improved the lives of nearly half a million Australians and it was disappointing to see the government now intent on pushing them back below the poverty line.

“Punishing the unemployed during a recession, when there are more than 10 unemployed people competing for every one job vacancy, is simply cruel. Now is the time to support the unemployed, not punish them for losing their job,” he said.

The ANU modelling, which was released to The Guardian, forecasts that the number of people living in poverty would increase from 3.49 million to 3.82 million by January as a result of the cuts.

Ben Phillips, from the ANU, said that his modelling sets the poverty line at $370 per week, which is 50 per cent of median income, after housing costs.

The ANU modelling also takes into account Treasury forecasts that predict the number of people receiving the JobSeeker payment would increase from about 1.5 million to 1.8 million by Christmas.

Mr Phillips told The Guardian that the decision to cut the supplement risked creating different classes of welfare recipients.

 “You’ve got the JobSeeker rate of $715 per fortnight and the JobKeeper rate at $1200 per fortnight,” he said.

“Initially there was a gap of $380 per fortnight, now that’s really ballooned. Those on JobKeeper are above the poverty line, those on JobSeeker are below it.”

Should the government be doing more to encourage spending during a recession? Do you support a permanent increase to the JobSeeker payment? 

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Written by Ben

55 Comments

Total Comments: 55
  1. 0
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    Australia has the resources to do this as long as the very wealthy pay their fare share. I believe in rewarding knowledge, experience and darn hard work but multi-million dollar salaries and bonuses with so many tax lurks! What’s that about? News for you people: you’re going to die eventually and you can’t take it with you!! Pay your taxes and treat your employees with respect and generosity and you’ll be rewarded with even more success!

    • 0
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      Good point Johno….will it ever happen no,there are people on big salaries that do the right thing and share the wealth for the good of the country….but there are more that are just greedy selfish care about only me..myself and I.

    • 0
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      I wish people would stop whinging about the so-called tax dodgers. The truth is that the top 10% of taxpayers pay 50% of the tax income in Australia. Big business pays all of the tax required by the current tax laws including income tax, payroll tax and royalties where applicable. Aim your complaints to all of the governments since Federation which have enacted the laws for collection of taxes, not those who obey the laws.

  2. 0
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    If Ben Phillips thinks that living on less than $370 per week after housing costs is below the poverty line, he should talk to some pensioners… I have $180 per week after housing costs, Ben… and I bet I’m not the only one!

    • 0
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      Difficult Cherie. They have to help people like you improve your quality of life! Wrong Government in power to do that unfortunately.

    • 0
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      Yes rent is the biggest taker of my income, along with the other living costs, those who think they can live on less than $370 should try it and see how hard it is. I can only afford the rent because my son lives with me while he is a student. He does not get rent assistance because Centrelink deems he is living with a parent.

    • 0
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      Rent assistance??? You are whinging about rent assistance for your son?? The majority of students study as well as work. I was one of those!!!

      Your son can get off his behind and find a few hours work – so can you.

  3. 0
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    Got to stop pandering to some of these so called job seekers who do not even attempt to seek a job. Employers all over Australia are struggling to find enough workers as it is and little wonder when our government is giving them enough so they can sit around idle.
    Nations service could be another option as well .

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      Total rubbish Jaydee. Like President Trump, you are wont to make outrageous statements without any evidence.
      I have a near relative who applied for a 3-day a week casual administrative job and won it. One of her first tasks after she started was to collate and file around 220 applications for her new job. Just before last Christmas a neighbour of mine was retrenched from his job at age 58 to be replaced by a labour-hire company who employed overseas students with a work visa. Not the first time I have heard of similar stories where Australian workforces were replaced by labour-hire.
      Seems these labour-hire companies sign-up students on contracts that severely undercut Australian workers conditions, like casualisation with no sick leave or paid holidays, reduced hourly rate, no penalty rates for overtime or working outside ‘normal’ hours and in some cases working on piece rates rather than hourly rates.
      Those Jaydee are the hurdles many willing workers face when applying for jobs. All our government can do is reduce assistance to the unemployed and give tax cuts to those who are well off. Sometimes I wonder how our Prime Minister can reconcile his touted Christian beliefs with such un-Christian disdain for the underprivileged.

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      You are not in the real world Jaydee, go and talk to those lining up at Centrelink and you will find the majority do want to work, stop putting them all in the same basket. 1 job for every 10 people, not possible for everyone to be employed and it will get worse it is predicted with so many businesses relying on JobKeeper and will not recover when that is taken away they will be registered as unemployed. Also need to consider the many who are underemployed but not registered on the jobless rate.

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      I agree too Jaydee as hardly a day goes by without someone telling me they can’t get staff.

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      Really Willie? I find that hard to believe, give me the proof, what kind of jobs and who with, how much do they pay, are they contract and temporary, because that is an issue for those on unemployment benefits it is very hard to get back on them without a long wait, so any money they save from working a few months over Christmas will be lost when they have to spend it while waiting until they can get back on the dole, this needs to be fixed, we need more permanent jobs with sick leave etc. Most jobs are now on contracts without any benefits.

    • 0
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      Jaydee is right on the money. It’s you who are not in the real world. As long as there is a free lunch some will take it. There are jobs all over the place.

      Many students at my uni find them because they have pride. How come your son can’t find one? As a parent, might be a good idea to look for a few hours work yourself to help out the poor diddums!!!!

  4. 0
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    Let’s look at these payments without the hysteria.
    Jobkeeper whilst above the Jobseeker rate, is not only taxed but has no supplementary benefits ( this is always conveniently omitted from reports) Supplementary benefits such as rental assistance, free health card, electricity benefits, child payments etc and it is All Tax Free ( as opposed to Jobkeeper) I wish that instead of reporting about the unfairness of the two payments that the report gives as more information on jobs that Are available to especially the young. Which I might add are very hesitant to go for if the Jobseeker rates remain at a level that discourage job seeking. The government should make allowances for the seniors below age pension age ie maybe 50 and above. If you get a bunch of young people sharing houses or apartments and pool their unemployment benefits they will survive very nicely as is evident from the many previous years long before this pandemic.During the Depression ( not that I was around!) I was led to believe that people did what it took to survive and with little assistance from the Government. Perhaps different payment amounts for different age ranges? Especially as the prospect of getting a job diminishes substantially as you turn 50? No silver bullet on this one.

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      No, you can’t provide different welfare based on the age of the recipient. It must be according to circumstances and need with all relevant information taken into account. After all, there may be differences between a single 50-year-old and a single 20-year-old which may not mean the 50-year-old should automatically receive more or be treated differently just because they are 50!

    • 0
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      You also have not considered that an unemployed person can work and earn up to $300 a fortnight before it effects their payment but they cannot get a job because there is too many unemployed and if you are over 35 Scomo has made sure that will even be harder while employers line up for the subsidize for 18-35 year olds.

  5. 0
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    So listen up all you dickheads out there who voted for these mongel Liberal swine last election, DON’T DO IT NEXT TIME !

    • 0
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      You are that deep in ALP arses you better start sucking, mate. BTW mongrel does have an “r” in the word. Go back to school, you might get a job!

    • 0
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      Dipshit! You might notice there’s no capability to go back and edit your post when you realise you’ve made a mistake. And. BTW, I’m retired from my lifelong high tech career job in the IT industry.

  6. 0
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    “Punishing the unemployed during a recession, when there are more than 10 unemployed people competing for every one job vacancy, is simply cruel. Now is the time to support the unemployed, not punish them for losing their job..”

    Exactly.
    Lack of compassion and ‘austerity measures in tough times’ are part and parcel of the economic ethos (neoliberalism) that has promoted and allowed deregulation and tax loopholes for multinational corporations and the very wealthy.
    Wealth inequality has increased in Australia and globally over the last four decades with the myth of ‘trickle down economics’ (which relies basically on personal/corporate good will and lack of greed and selfishness to work…which clearly hasn’t worked). There are some very fine philanthropists and ethical companies out there, but also many that aren’t, that have a parasitic relationship to overall economic wealth and societal well-being.

    There is no shortage of money flowing around, it’s just a matter of distribution, that requires a change of perspective in those governing ostensibly ‘for the people, by the people’. Everyone struggling to get by could be lifted out of poverty in the proverbial blink of an eye, where there is the will and a strong enough desire to do so.

    It can be done…our neighbours in NZ have taken the first steps. When the current NZ govt came into office, one of the first Bills they passed closed corporate tax loopholes, bringing hundreds of millions of dollars more revenue to NZ per annum (which for a population of 4 million, is considerable).

    Biden’s platform coming into the US election included increasing corporate and wealth taxes to tackle the poverty existing in the world’s richest nation. If the USA goes that way, perhaps our government might get a bit more motivated?

    It’s easy to be cynical, but historically, positive change can happen very fast…it just requires heart and will in the halls of power, coupled with a change of perspective.

    • 0
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      Couple of points, Rowena, Biden’s promise has to pass the Federal government and there is no guarantee that his promises will ever be more than that. Secondly, the NZ government is unicameral, no upper house of review and no state governments so any election promises don’t have to be looked at by any other parties. In Australia positive change cannot happen very fast, any proposed legislation has to be passed by a majority in the Senate and in the case of the GST, all of the states and territories have a say in any changes.

    • 0
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      “Governing for the people by the people..”

      “In NZ…”

      “In the US….”

      A pity the focus is on countries other than Australia with very very different political systems, welfare systems, population, and even different societal problems. Australia must find its own solutions to its own problems and that should not automatically divest funds from those who have worked hard and built businesses just to satisfy those who didn’t and now want the same spoils.

      There are always going to be some who need lifelong support and of course, they should have it. BUT they are the huge minority of our society. The rest need to put more effort into looking after themselves and their children. That means getting a job, putting the kids through school and stop thinking everyone else owes them a living.

  7. 0
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    Nice posting Rowena,a breath of fresh air on a Friday

  8. 0
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    The real problem is that people conveniently ‘forget’ the Government introduced TEMPORARY assistance measures that were originally to be in place for 6 months. That time frame came and went, handouts were lowered slightly and extended for another TEMPORARY period.
    What do people not understand about TEMPORARY?

    Whenever assistance is handed out people very quickly become accustomed to receiving it and in their mind it becomes a ‘right’ not a safety net. This is what we are seeing now. There are undoubtedly people doing far better during COVID than before. Savings have increased, debt has been repaid, credit car use is down etc etc. Where is this sudden wealth coming from?

    Jaydee is right too. There are literally thousands of jobs on offer around Australia but fit, healthy unemployed just don’t want to do the work. Time to start applying pressure on those people and if they don’t make an effort then they don’t get the welfare at any level.

    • 0
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      Credit card payments have been paid off and people are using After pay now.
      The temporary period that you put in capital letters was because they estimated it would be only six months of hardship during the pandemic, now it is lingering they need to extend it further, with many loses of businesses and 10 people per 1 job, we have long way to go before jobless rate goes down, it is expected to go up in the new year,
      Also if you are over 35 you have much less chance of employment due to the Jobmaker plan put in place.
      Jaydee is not right,not in the real world, the jobs you may be talking about are in the middle of the outback and highly skilled jobs, many people cannot handle living in such harsh conditions and away from family and friends. Housing is also and issue when you have to move for employment.
      It is not time to put more pressure on unfortunate people KSS it is time to support them more, and it is good for the economy. Economists have said it is a disaster to lower their income right not as it is keeping the economy going. It is not the unemployed that is saving money, it is those who usually take overseas holiday.
      Please talk to real people who have lost their jobs and find out the real problems they face. Majority of unemployed do want to work so stop putting them all in the same basket. It is not like the old days of walking out of one job straight into another it is months of writing hundreds of applications, fronting up for numerous interviews along with hundreds of others and getting rejection after rejection, which wears people down and sends them into a depression then seeking medication to cope, unemployed people have always taken the blame and it is about time we see it for what it really is and give them more support.

  9. 0
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    don’t worry Queenslanders you voted for labour and the greens I am sure they will look after you if not you deserve what you voted for.

  10. 0
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    problem is all the leaners in society (going by income); that is govt employees esp at the upper levels and C levels overpaid in private arena

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