Reducing JobSeeker payments will make it more difficult for people to seek employment, an expert on work and economic security has said.
Dr Dina Bowman, Honorary Principal Fellow at the University of Melbourne, said that JobSeeker has been widely recognised as being “woefully inadequate”.
“It plunges people into poverty, it’s counterproductive, it means people can’t currently seek work because they’re so impoverished,” she said.
“They can’t afford internet access or pay for transport, so it undermines people’s efforts.”
The government has been under pressure to increase the base rate of JobSeeker from $40 a day to ensure that unemployed Australians will have enough to live on once the coronavirus supplement ends in March.
The supplement, which was introduced last April, doubled the rate of JobSeeker to $557.85 per week, as reported by AAP.
However, it was cut in September to $407.85 per week, and reduced again in December to $357.85 per week.
When it ends on March 31, JobSeeker payments will return to the pre-pandemic levels of $40 a day.
The coronavirus supplement made a big difference to unemployed Australians, according to Dr Bowman.
“They were able to eat three meals a day for the first time, not have to worry about the rent and have some sense of stability upon which they could build,” she said.
Dr Bowman believes that a decent base rate is needed to help people seek work.
“Looking for work costs; you’ve got to make sure you’re presentable, you’ve got to be able to have transport to get to a job interview,” she said.
“And you’ve got to have internet access, and so all of these things cost money.”
The Brotherhood of St Laurence, a social justice organisation working to prevent and alleviate poverty across Australia, is calling for the base rate of JobSeeker to be permanently increased.
Dr Bowman, who also leads the work and economic security team at the BSL Research and Policy Centre, said BSL is calling for an increase of at least $25 a day on top of the base $40 a day, taking the total to at least $65 a day.
“[This] would bring us above the poverty line and enable people to live with dignity while they seek work,” she said.
Furthermore, according to Dr Bowman, to ensure fairness and adequacy in the future, there should also be an independent social security commission to review and set rates.
Most social security payments are usually increased in March and September every year to maintain their real value over time to align with increases in costs of living and wages, this process is known as indexation.
For pensions, this is done by adjusting payments in line with movements in the Consumer Price Index, which measures changes in the price of a fixed basket of goods and services, or the Pensioner and Beneficiary Living Cost Index (PBLC). They are then benchmarked against the Male Total Average Weekly Wages.
However, allowances or payments, like JobSeeker Payment, are only adjusted by the CPI.
“The problem is that there’s a difference between indexation arrangements for pensions and for allowances,” Ms Bowman said.
“So, JobSeeker payment, which is an allowance, is only indexed to CPI not to wages, and that’s why this gap has grown and it should really be indexed through CPI and wages.”
