Now is not the time for subsidy cuts, says ACTU
The timing of cuts to government welfare subsidy programs such as JobSeeker and JobKeeper still lacks an appropriate nature at the start of 2021 as the Australian economy still lags in times of a recession, the Australian Council of Trade Unions (ACTU) said in its New Year’s message.
Addressing the nation’s workforce, and speaking specifically to the plight of the unemployed, under-employed and those labouring in insecure jobs, Scott Connolly, the ACTU’s assistant secretary, said that while unemployment rates remain high, the Morrison government going ahead with its cuts to subsidy packages takes much-needed money out of the hands of those who can best boost the nation’s flagging economy.
Initially lauded for introducing subsidies to help the suddenly-unemployed when the COVID-19 pandemic was declared in March, the government under Prime Minister Scott Morrison and federal treasurer Josh Frydenberg has proceeded to slash JobSeeker recipients’ coronavirus subsidy from its original $550 per fortnight to complement the old NewStart base rate of $559.00 per fortnight, to $250 per fortnight as of 25 September to $150 per fortnight effective their first full fortnightly reporting interval in 2021.
Connolly cites that living on an average of $51.20 per day after the most recent cut leaves JobSeeker recipients struggling even further to spend money on life’s necessities of rent, bills, and groceries, let alone anything beyond them.
“After a year spent battling bushfires and surviving a pandemic, the last thing Australians should have to worry about now is how they will pay their bills or put food on the table,” Connolly said on Friday.
The JobKeeper subsidy is also meeting the government’s machete chops, to the tune of $100 per fortnight, taking it to $1000 per fortnight for workers that had performed part- or full-time positions, or $650 per fortnight for those working under 20 hours per week.
And Connolly stresses that the cuts add up, especially for those who had been used to the struggles of their normal everyday lives.
“For many Australians, the JobKeeper coronavirus supplement meant that for the first time, they were able to eat three meals a day, or purchase much-needed medications,” Connolly said.
“To take that away from them now as this difficult year draws to a close is both callous and heartbreaking,” he added.
As reported by the Australian Bureau of Statistics (ABS) last month in its November figures, the national unemployment rate continues to hover at 6.8 per cent – which represents an improvement of 0.2 per cent from October as workers who were put aside by their employers at the start of the pandemic returned to their duties represented a portion of those responsible for the improved numbers.
However, as the union movement and the Australian workforce continue to struggle with the impact of the current state of unemployed and under-employed as well as those embroiled in a spate of insecure jobs, Connolly also cites the recent resurgence of positive COVID-19 cases in New South Wales and Victoria as another factor as to why Morrison and Frydenberg would have been justified to delay the current round of cuts.
In fact, Connolly and the ACTU claim that the failure to even consider this action revealed a lack of proper initiative on the part of the government.
“With COVID-19 resurging in NSW and the national economic crisis far from over, cutting economic support to millions of struggling Australians is also an extremely irresponsible act,” Connolly said.
Bill Shorten, the former leader of the Labor party now serving Anthony Albanese’s shadow government as its minister for government services, concurs that the timing is poor to go ahead with the scheduled cuts.
“The government should reconsider it,” Shorten told Nine’s Today program on December 29.
“We are not out of the woods yet with this pandemic and the economic effects. They are reverberating around the economy, especially in regional towns and suburbs where there are a lot of casual workers who have bourne the biggest brunt.
“For the less well off, we shouldn’t be cutting their circumstances at this point in time,” Shorten added.
Youth unemployment remains another factor which the unions and government figures alike are grappling with, as the recent round of cuts will likely hit workers aged 16-to-24 years of age even worse.
According to the ABS in its November statistics on employment, youth unemployment currently sits at 15.6 per cent – and noting a 12-month increase of 4.1 per cent over the year before – and while that figure calculates to more than double of the national general rate of unemployment, fears abound of what impact that may have on the economy.
Especially when disabling demographics of people who are otherwise motivated to spend money to inspire a struggling economy.
“Cutting the rates of JobKeeper and JobSeeker is only going to worsen the impact of the coronavirus crisis on young workers and our community. We need jobs, not cuts,” Young Workers Centre manager Arian McVeigh said back in September, when the first cuts to JobSeeker and JobKeeper were on the eve of occurring.
Moreover, when the initial JobSeeker and JobKeeper cuts took effect, it was forecast to stifle the Australian economy by $31.2 billion according to a joint report from economics analysis firm Deloitte and the Australian Council of Social Services (ACOSS) – and while real figures to confirm the degree of impact have yet to be released, agreements range widely outside of government figures which confirm that consumers lack the confidence to spend money.
Advocates for the “Raise The Rate For Good” hashtag trending across social media would claim that a move to raising the old NewStart rate permanently – which has not occurred since 1994 – would help restore that confidence.
And while the ACTU has pushed for that payment to resemble the original JobSeeker amount, Labor ministers such as Shorten and Linda Burney, the ALP’s shadow minister for families and social services, have vowed to attack the issue when Parliament sits for the first time in 2021 next month before the current rate of JobSeeker and JobKeeper subsidies are set to expire at the end of March.
“Around two million Australians will be impacted by the government’s scheduled cut to the coronavirus supplement next March,” Burney said last month when announcing a similar bill to the upper house.
“Returning unemployment support to the old base rate places millions of Australians at risk of hardship and jeopardises local jobs,” added Burney.
Also by William Olson:
Qantas workers cannot be denied sick leave, says ACTU
MYEFO missing points on long-term recovery: ACTU
ASIO bill reforms aren’t enough, say MEAA and Greens
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