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Progressives fear welfare cuts may deepen poverty lines

By William Olson  

The Australian Council of Trade Unions (ACTU) has come out with a two-minded approach to the Morrison government’s announcement to upcoming changes to the JobKeeper and JobSeeker schemes: grateful that they will still be around, but wary that the cuts could place millions of Australians in danger of being in threat of greater poverty during and after the COVID-19 pandemic.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg, in fronting the Canberra press corps on Tuesday, announced that the two programs would be incurring respective $300-per-fortnight reductions from the end of September.

Additionally, in the case of the revised JobKeeper, it will now be a case of being a two-tiered system with payments based on the number of hours an employee within a business had averaged prior to the start of the pandemic – thereby placing employees in the lower category liable to lose more welfare entitlements compared to those on the current JobKeeper award.

And to help confuse the situation further on JobKeeper, there will be two windows of payments before the Commonwealth government reviews it again in March 2021.

From late September until December 31, the two tiers will consist of one which pays workers $1200 per fortnight, minus tax, and $750 per fortnight, minus tax, on the other tier for those employees working fewer than 20 hours per week.

Then from January 1 until the March review, the two tiers reduce themselves to paying a company’s workers $1000 per fortnight, minus tax, with the exception of those working 20 hours per week or less, who will receive $650 per fortnight pre-tax.

As for JobSeeker, the base rate – otherwise known as the old NewStart entitlement – remains at $565.70 per fortnight for single recipients without dependants, not counting entitlements such as rent assistance or the energy supplement, while the coronavirus supplement which created the JobSeeker scheme has been cut from $550 per fortnight to $250 per fortnight.

Therefore, the maximum pre-entitlement amount a JobSeeker recipient could receive from Centrelink will be $815.70 per fortnight from October, whereas the current amount sits at $1,115.70 per fortnight.

The window on that new payment expires as of December 31, after which time it will come back up for government review.

The ACTU had harboured fears over the JobKeeper and JobSeeker schemes being completely dashed after their September 27 expiry dates, but Sally McManus, the ACTU’s national secretary, has held firm on the belief that the government’s cuts have been too severe when the nation’s workers and unemployed need as much help as they can get in the middle of the pandemic-influenced recession.

“This announcement has delayed the economic catastrophe that would have resulted from pushing these programs off the cliff during the pandemic, but we need far-reaching government investment to create a path out of recession and to create the jobs we will need to rebuild the economy,” McManus said.

The actions of the government on cutting JobKeeper and JobSeeker, when weighed against the growth aims of McManus and the ACTU – confirmed the day before in a wide-ranging jobs-based skeletal program designed to reinvigorate the economy – have drawn concerns from other organisations as well.

GetUp!, a progressive community action and advocacy group seen by some as a political lobbying organisation, outlined the impact of what the changes of JobSeeker would have on the nation’s unemployed and under-employed workers.

On their social media outlets immediately following the media conference, GetUp! broke down what the changes mean for the underclasses.

“The poverty line is around $457 per week for a single adult.

“The new rate of JobSeeker [is] $405 per week.

“During this pandemic recession, we need to be protecting people forced out of their jobs, not putting them in poverty,” GetUp!, through its national managing director Paul Oosting, said on its Twitter timeline.

Morrison and Frydenberg did announce that the JobSeeker threshold of earnings while on the entitlement – that is, money that one may earn before other earnings are taken dollar-for-dollar off the remainder of the payment – has been increased to $300.

However, GetUp! and Oosting view that as being of little other benefit for its recipients.

“The government is going to force 1.7 million people below the poverty line, and force them into pointless job searches while there are 13 job-seekers for every job available.

“The new $300 income threshold will be no relief to millions for whom there is no work,” they tweeted.

And beyond any further statistical analysis, GetUp! and Oosting point to the real human cost of the cuts to JobSeeker – and to some extent, JobKeeper as well.

“The JobKeeper focus in this presser distracts from the fact that unemployment is getting worse, and the government is throwing people who lose their jobs under a bus.

“The economic data is saying that the stimulus is woefully inadequate to support a fast recovery,” they tweeted.

 

Moreover, the return of Centrelink’s old NewStart wrinkles such as the mutual obligation agreement and the income test for any new JobSeeker claims strikes McManus as putting poverty-level individuals in a series of compromising positions.

“The union movement has been campaigning for continuing the JobKeeper and JobSeeker programs, the gaps also need to be closed so everyone who has been badly affected by the pandemic is supported,” McManus said, while seeing the obstacles the jobless and under-employed face.

And those obstacles are more mental and emotional than they are physical, upon those people.

“The increase of the income-free threshold to $300 for JobSeeker is welcome but the reintroduction of mutual obligations is a worrying return to the punitive approach to welfare payments which we hoped the Morrison Government had left behind,” she said.

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15 comments

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  1. Phil Pryor

    There is a future looming, accelerating due to this crisis, of no good work, less professional and trade solid work. Casualisation, fragmentation, gigging, hustling, many little shitty jobs, ever poorer security, conditions, regularity, assured social and economic postions. Owning a home is related to security, to guarantees, to regular good work. There are detached and alienated and fearful people, our citizens..who cannot approach the money controllers for the essential loan. This government is the face of greed, profiteering, accumulation, hoarding, off shoreing, outsourcing, cheap compliant labour, donations, patrons, networks of old boys who have done well, who own the racehorses, limos, yachts, holiday homes, geared rental real estate portfolios, have advisors to retain it all. Actually making all citizens safe and prosperous enough, making the very environment safe, restored, protected, is not at all likely, because GREED limits one’s perceptions and focus to the tip of the nose or knob, no further. We can all get stuffed, except as a source of profiteering…

  2. Jack Cade

    Phil Pryor

    Yes. The virus has allowed businesses to do what they didn’t dare do but what the Coalition has been aiming for for 20 years. Destroy job security and allow the workforce to be sifted and manipulated with impunity.
    Trumps premise in 2016 was to bring back jobs, as if the Chinese, for example, had stolen them. The reality is that corporates trawled the world for cheap and undemanding labour, and moved their manufacturing where the cheap labour was. And Nike, the doyen of sportswear, twigged that all THEY needed to do was sell their name. No factories like Puma, or Adidas, just get some coolies to do the actual work at their own expense and ‘swoosh’, you make a fortune.

  3. Jack Cade

    I note, from the Guardian, today, that we are expected to get into a lather about the Chinese FORCING Uighurs to make face masks, and WE are buying them. Poor, put upon Uighurs – badly treated Muslims, who are being interned for rehabilitation by China because a sizeable cell of Al-Qaeda has been among them.
    The US – and Australia, and Britain, has MURDERED MILLIONS of Muslims -,in Afghanistan, Iraq, Syria, Libya, etc., and is not sorry about it.
    And the United States FORCES prisoners to make goods which Uncle Sam sells for a profit. But making masks, under duress!! My GOD!!

  4. crypt0

    I don’t believe Morrison has one iota of concern re millions of Australians trying to survive on income below the poverty line.
    Maybe on election day, as when you are starving you are less likely to vote Lieberal.
    As I recall, just about everyone, including John Howard, (of all people!) thought the old $40/day Newstart was due for a rise.
    Everyone that is, with the conspicuous exception of Scotty from Marketing.
    No … I think we know what Morrison stands for, and it’s certainly not for the advancement of workers, the unemployed, the homeless and any other marginalized groups. Despite all the bullshit he spouted forth in his maiden speech to the parliament.
    With an estimated Net Worth of least $38.8 Million dollars as of 15 July 2020, why would he?
    https://wallmine.com/people/28211/scott-c-morrison

  5. Barry Thompson.

    crypt0.
    Unless I read your post incorrectly, you are saying Morrison has a net worth of $38.8 million.
    Are you sure it is our Scott Morrison?

  6. Jack Cade

    How does a bloke who gets sacked regularly accumulate $38 mil? Or is that why he got sacked?

  7. Matters Not

    Enough of this bullshit.

    https://ballcorp.gcs-web.com/management/scott-morrison

    Next we’ll hear that Indue is owned by the Liberal and National Parties and donates large sums to their coffers (without telling the AEC).

    Some people will believe anything. They hear what they want to hear – and disregard the rest. Hilarious.

  8. andy56

    i am amazed that nobody has cottoned on that the proposed tax cuts is in fact a PAY RISE for pollies of about $11,000.
    One rule for us and another for the IPA crew. Sorry pollies alligned with or ex IPA.

    The next ideological brain fart is the thinking that no Super increases is like a pay rise. Because employers will pay it as a rise instead of into the super. What they are unknowingly acknowledging is that super is taking a lot of money out of the economy, they aint smart enough to put two and two together yet. Let alone the fact they have screamed blue murder whenever a pay rise occurs. A couple of screws loose in their brains i think. They want their cake and not only eat it, regurgitate it and eat it again.

    Phil, its obvious that what has made us ” prosperous” its cheap overseas labour. When china runs out it will be india’s turn, unless automation gets to the bottom line first. Capitalism as espoused these days is dog eat dog to the bottom. Globalisation sure has lifted millions out of poverty but its a ponzi scheme at best. It has to run out of suckers eventually. It hasnt done us any favours at all. Oh sure we had higher wages but thats because everything from housing to a beer was/is so fucking expensive. A T shirt that costs $1 to make is sold back to us at $50 . We have been conned.

  9. Matters Not

    andy56 you keep repeating this claim (or some variation):

    super is taking a lot of money out of the economy,

    How so? Perhaps you’d like to unpack that a little? If super (money/wealth) is going out of the economy, then where is it going? Overseas? Where – that’s not part of the economy?

  10. Michael Taylor

    MN, according to Paul Keating (about 8 years ago now) his compulsory employer contribution scheme (brought in 1992) has contributed one trillion dollars to the Australian economy.

    I’m sure there’s a link, but I don’t have it on hand (I heard it on the news).

    You will do me a compliment by taking my word for it. 😁

    But that didn’t answer your question.

  11. Matters Not

    MT I’m a strong supporter of Super so I’m not going to question Keating’s general point of view. Most of my money is tied up in super and because I’m still invested in ‘growth’ assets I’ve taken a significant hit with the arrival of Covid-19. But over the years, super returns have been rather kind. QSuper (my fund) invests significant dollars across the world and then returns dollars to me which I spend in the local economy. Look at this link to find that QSuper has more than $10 billion in infrastructure (like Heathrow Airport ).

    https://qsuper.qld.gov.au/news-hub/articles/2019/04/29/01/14/qsuper-and-heathrow

    Could write pages but I won’t because I gave up writing 20 odd years ago. My advice – make sure you are in a Union and invest in Super – both for your own good and that of the Nation, (But the current super arrangements are unsustainable in the longer term. No country can afford to have so many having a tax free income while being a burden on the public purse, Can’t and shouldn’t last. Everyone should pay tax – including those on a pension. But that’s another story.)

  12. Jack Cade

    MN

    I agree.
    At the last federal election, an acquaintance of mine voted for the Coalition for the first ever time because of the ALPs proposal to tax dividends.
    I have a share portfolio and don’t see why I get the franking refunds when I haven’t paid them in the first place. So there you have an example of a one- issue voter. Throw in Browns caravan and you’ve won an election.

  13. Phil

    Everyone should pay tax – including those on a pension. But that’s another story.)

    Well Hello………………Out there….

    What a stupid statement… Everyone apart from babies suckling on their mothers tits, already does pay tax and wow what a windfall that tax is, for the government. The tax I pay on beer alone, would pay for Bronwyn Bishops wrinkle cream and hair dye for Kevin Andrews. Well I might be stretching credulity saying it would cover Andrews hair dye. Lucky I don’t smoke. Umm now your talking tax theft on a grand scale. Ned Kelly with out the mask. Not to mention the taxes I paid putting my three kids through school.

    I have bought and sold three house’s in retirement paying about 30 grand in stamp duty. Not to mention the new jam jar I bought last year. I bought an an article on a web site last night, 27 dollars GST thanks for coming you mug.

    So MN wants pensioners who have already paid into a pension fund to now pay tax on the pittance the old age pension is.? They’ll be making me take a loan out against the home I own next. Oh but wait, that rumour was put out months ago to test the waters. Wow and my wife wants to know why I drink.

  14. andy56

    Matters Not, the reason for super is to provide a reasonably comfortable retirement. The side effects are supposedly 1/ revenue to the government, 15% on way in and 15% of earnings. 2/ a drop in government payments as a pension at some unforseeable future date. What we are seeing is a cost to government of $17b a year and rising.

    “As at the end of the March 2020 quarter, 47.5 per cent of the $1.7 trillion investments were invested in equities; with 18.7 per cent in Australian listed equities, 24.1 per cent in international listed equities and 4.6 per cent in unlisted equities. Fixed income and cash investments accounted for 34.6 per cent of investments; 21.1 per cent in fixed income and 13.6 per cent in cash. The cash allocation increased from 9.5 per cent during the quarter due to a number of factors, including the equity market downturn, member switching between investment options and funds increasing liquidity ahead of the start of the Early Release scheme.” ref https://www.superannuation.asn.au/resources/superannuation-statistics.

    47.5% in equities and 13.6 in cash. Only 21.1% in fixed income. So 47.5% is invested in over inflated assets.
    We currently put $120b into super every year.

    I am not opposed to super, i have my own. What i am saying is that super was a solution to an ideological problem, ie the libs dont want to pay a cent more as a pension than obliged. So labor came up with a patch.
    Just doing basic sums tells me its not the best way to distribute wealth. A UBI fixed at a good rate would eliminate the need for super, then $120b extra could flow into the economy increasing demand rather than supporting supply. Demand will create jobs. Buying bank shares doesnt increase the job demand. Having so much free capital only increases asset values. Money being spent creates demand. If you were to design an economy from scratch, super wouldnt be in the mix. If your trying to patch an economy thats just functioning , then super is an idea.
    Not saying abolish super WITHOUT first fixing a UBI, the two go together or not at all.

    Hope that clears it up a bit Matters not.

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