The Government’s $25 per week increase to the Jobseeker payment is simply not enough. It is an insult to people trying to get by on the inadequate payment. The accompanying ‘dob in a dole bludger’ hotline and requirement to apply for 20 jobs a month are cruel and ridiculous. These policy choices typify the Liberal’s approach to the most vulnerable and to our social safety net. When the remaining $150 of the coronavirus supplement is removed completely from 31 March it will mean a net, and deep, cut to people’s incomes.
Twenty-five dollars per week falls far short of the rates that have been called for now for many years. ACOSS is currently calling for JobSeeker to be permanently increased to at least $65 a day – that is an increase of $25 per day.
When the JobSeeker Payment was temporarily doubled in response to the pandemic, it was a clear admission from the Government of two things – that $40 a day is not enough to live on, and that an adequate unemployment benefit is not only essential to keep citizens out of poverty but plays an important role in stabilising the economy. This move actually reduced the rate of poverty in Australia, at a time of peak unemployment. Recipients talked of finally being able to have many things most of us take for granted - eating proper meals, heating their homes, getting a haircut. This demonstrated the power of social security policy to combat poverty, and the Government had an opportunity to provide a permanent increase that continued to lift people out of destitution.
Labor has long advocated for a permanent increase to the JobSeeker payment. At the last election we committed to review the payment. This review was to determine how much to increase the payment by, as well as looking at how indexation and income tests should be adjusted.
Before politics my career was in social security policy including as a researcher at NATSEM analysing the impacts of social security changes on poverty and inequality. There are many complexities in getting the rate right, including how it compares to the poverty line, the minimum wage and other payments such as the Age and Disability Support pensions. For example, the last time that the unemployment benefit was increased in real terms, in 1994 under Paul Keating, the rate was 90 per cent of the Age Pension. It’s now 60 per cent. It is also important to investigate how the income tests and other requirements interact with the current labour market.
The most important consideration is whether the payment allows people out of work to have a decent and dignified standard of living. In my opinion the best way to determine this is by taking a budget standards approach.
Budget standards analysis involves looking at the costs of a basket of goods and services that enable a given household type (e.g. a single person, family with children etc) to have a decent standard of living. Professor Peter Saunders from UNSW has done detailed analysis of budget standards published in 2017, which formed the basis for ACOSS’s previous calls for an increase of $75, then $95 per week – both significantly higher than the Government’s $25 per week.
It is important that all these things are considered together so that we get the rate right, as well as the income tests, indexation, and interaction with other payments. People who argue that this work is not necessary are ignoring the depth of the current inadequacy of the system, as well as the economic implications of setting a rate that is too high or too low.
Independent reviews have played an important role in major changes to Australia’s social security systems throughout its history. Amid broad concern about poverty in Australia in the early 1970s, the Commission of Inquiry into Poverty, chaired by Professor Ronald Henderson, led to broad ranging improvements including increasing the unemployment benefit, rent assistance and improving payment conditions for sole parents. The Rudd Government commissioned the Harmer Review of pensions. In response the then Labor Government delivered the largest increase to the Age Pension in its history, lifting over a million pensioners above the poverty line.
For too long our social security system has been seen as nothing more than a source of savings for the Federal Budget. Australia’s social security system is in need of a comprehensive review of this nature to give it the reset required. With one in six Australian children living in poverty, family payments should also be included with a view to improvement.
By doing a comprehensive review, we will also set the standard for JobSeeker increases into the future – it should be about what people need, not politics. In this vein, ACOSS and its members have advocated for all social security rates and thresholds to be set and continually reviewed by an independent body for this reason.
The Government has the resources and data to do such a review right now. Instead they have decided to put forward an increase that falls well short of any amount that budget standards or other forms of analysis have shown to be required.
We need a permanent increase that allows people to live in health and dignity.
Alicia Payne is the Federal Member for Canberra.
