JobSeeker and the $50 ‘bonus’


Contrary to popular opinion, almost half the people in this study relied on NewStart (now JobSeeker) for less than a year. Graphic courtesy of Wes Mountain and The Conversation.

You know how it goes. You’ve finished ferrying 16 items down the checkout conveyor and the assistant says: $142.99 – cash or card?

“How do the poor people get by?” I ask of no-one in particular.

Later, I went to the butcher ($47) and the organic fruit and vegetable shop ($56), all up $245.

She Who Pays the Bills said: “But we only needed a few things”.

Now if we were on unemployment benefit, such profligacy would leave us with just $375 to cover the next 13 days (rent, bills, fuel and more groceries).

It is timely to write about the cost of living, and how the reality appears quite different to the official inflation rate (1.2% in December). The Federal Government’s superficially successful $100 billion wage subsidy programme (JobKeeper), ends on Monday. Businesses that claimed JobKeeper passed on the subsidy to people they employed, regardless of how turnover and profit was tracking through the year that the programme was in place.

The last day of March also signals an end to the scaled-down Covid-19 supplement paid through JobSeeker. In the first few months of its origins, JobSeeker initially doubled the benefits paid to unemployed people.

JobSeeker, which replaced NewStart and associated benefits from March 21, 2020, introduced three levels of supplements paid through the first year of the Corona virus. From April 27 2020 to September 25, recipients were paid $550 extra a fortnight. This was then reduced to $250 extra per fortnight until December 31, 2020. The final supplement of $150 a fortnight was paid from January 1 until it ends next week.

Welfare groups had long lobbied the government to raise the unemployment payment beyond the poverty level.

The government made much of its decision to raise the rate paid to those on JobSeeker by $50 a fortnight ($3.57 per day).

As of next week, welfare recipients will have to learn to live without the additional $150 a fortnight – reverting to $620 a fortnight, excluding other payments like rental assistance*.

Economist Ross Garnaut’s latest book proposes that successive Federal governments, in cahoots with the Reserve Bank, have deliberately kept unemployment high since the mid-1980s. He writes that governments  have ‘allowed’’ hundreds of thousands to languish in unemployment as a means of pursuing a policy to suppress wage growth and inflation.

Garnaut says this deliberate policy has ‘immiserated’ people.

He told ABC business reporter Gareth Hutchens that Australia should use its many resources to push the unemployment rate down to 3.5% by 2025. You may not remember, but unemployment was at this level or lower for decades between 1950 and 1975. This was an era when many Australians had permanent jobs in factories that made things.

Garnaut says the government and Reserve Bank have to stop guessing the level of ‘full employment’ (at which point the RBA starts lifting interest rates, as a means of combating inflation).

He says the budget deficits needed to sustain full employment should be funded directly or indirectly by the Reserve Bank. It is complex, but if you are interested, read more here.

The Conversation’s in-depth study of unemployment benefits busts a few myths. Research by a team drawn from the Brotherhood of St Lawrence, RMIT and ANU studied benefit payments between 2001 and 2016.

The premise of the report is that Australians receiving unemployment payments are often portrayed as “a relatively small group of people with personal or behavioural problems that stop them from getting a job.”

The research was conducted to challenge long-held perceptions of ‘us and them’.

One of the most startling conclusions clarifies myths about the long-term unemployed. The research found that nearly half of the Newstart population of 4.4 million (47%) received the payment for less than a year. Over two-thirds (68%), received it for less than two years. The study uncovered a concerning trend in the number of welfare payments suspended for not reporting income correctly or not meeting job-seeking targets.

Our study found rates of suspension increased dramatically over the study period, from 2% in 2001 to 11% to 2016.

Successive governments have increasingly sought to enforce this, leading to more uncertainty around the payment.

So, while the unemployed go forward living on a minimum $44 a day, how will things go with the end of JobKeeper, the flawed business subsidy scheme which kept 3.5 million people off the dole queue?

As business editor Ian Verrender noted in an analysis for the ABC, JobKeeper turned into a profit mill for businesses that boomed during the lockdown. Billions of taxpayers’ dollars were paid to wealthy businesses, without the mutual obligations associated with welfare. The only reason we know about this at all is the corporate regulator’s belated decision to force listed companies to disclose their taxpayer handouts in the December half corporate results.

Verrender, an investigative scribe, laments the lack of a public register of JobKeeper recipients – “despite the scheme being among the most ambitious (of its kind) in the world”.

But it is not just the blue chip public companies that scored a windfall; tens of thousands of private partnerships, sole traders, charities and small to medium-sized businesses also prospered.

Many of the heads of Australia’s biggest businesses feature in the timely release of the Top 250 Rich List by the Weekend Australian. I say timely because it suits my purposes to mock the rich. What else can you do when the 250 individuals named in this list are collectively worth  (in monetary terms- Ed.) $470 billion. As former journalist union chief Christopher Warren wrote in Crikey – that is equivalent to 25% of Australia’s GDP. Even the lower echelons on this list have a net worth of $450 million or more – $449 million more than the collective net worth of your average self-funded retiree couple..

Wish, the glossy magazine lift-out supported by full-page ads by Mercedes Benz, Cartier, Giorgio Armani and the like, is a supreme example of what The Australian calls ‘aspirational’ journalism.

For those on JobSeeker who aspire to getting best value from that extra $50 per fortnight, here’s a slow cooker recipe for lamb forequarters (large chops that are too tough for the barbeque). You can probably score a kilo for $15 or so. Buy 1.5 kilos each of onion, carrots, potatoes and the cheapest green vegetable (about $10 all up). Add a can of red kidney beans ($1.67) to flesh it out and cook the lot in a slow cooker while you are out applying for one of the 15 jobs a month needed to justify your welfare payment.

If you chucked in the right combo of herbs and garlic and made a gravy worthy of ‘Sir’ Paul (Kelly), the lamb will just fall off the bone and you’ll be eating this for days.

Buy an $8 bottle of red while you still can (he said, one eye on the coming of the cashless welfare card). Invite someone over (‘a loaf of bread would be great, thanks’).

Enjoy every casserole.

More reading

*Welfare payments quoted here are for single people, no dependants. Families obviously receive more.

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