‘Inadequate and needs bolstering’: Here’s how Australia is reacting to the government’s JobKeeper and JobSeeker changes

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  • The Australian government will slash JobKeeper and JobKeeper payments from September under new versions of the programs.
  • The revised JobSeeker will run from September to December, while a modifed JobKeeper will taper off through to March.
  • Unions, peak bodies and activists have given the changes a thoroughly mixed reception.

The Australian government has kicked the can down the road for the economy, extending income support for three to six more months.

With the JobSeeker allowance and JobKeeper wage subsidy due to end in their original form in September, the Morrison government confirmed it would allow revised versions of each to run to December and March respectively.

Tuesday’s announcement presents both good and bad news for the Australian economy. On one hand, reductions in both programs will see support tapered back, putting more financial pressure on households. On the other, the extension means stimulus measures aren’t simply going to disappear come September.

Accordingly, the changes have been met with both criticism and cautious support from various bodies. Here’s what they’re saying.

The unions have welcomed JobKeeper extensions but question cuts

The Australian Council of Trade Unions (ACTU) has rated the introduction of JobKeeper 2.0 as necessary but insufficient.

“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,” ACTU secretary Sally McManus said in a statement to Business Insider Australia.

The unions have suggested that part-time workers will be particularly hurt by the changes, already being on lower wages and having lost second and third jobs during the crisis.

By reducing the subsidy McManus argues that businesses may begin cutting back their workforce as they grapple with reduced turnovers.

“They’ve got to now look at their finances and whether they can keep going with less money.”

Hard hit industries are less happy with support being cut

Those sectors struggling the most as a result of the coronavirus crisis are less sanguine.

“This announcement confirms that the federal government is happy for aviation to collapse and with it thousands of jobs,” Transport Workers Union (TWU) national secretary Michael Kaine said.

“The announcement to cut payments and that thousands of aviation workers will again miss out on JobKeeper shows how Scott Morrison is failing to understand the serious situation aviation is in.”

Kaine warned that without further support redundancies were imminent, from airlines to aviation service companies.

While continued support is welcome, extra stimulus will be needed

While the building industry has benefited from extra measures such as the HomeBuilder and JobTrainer scheme, it still recognises the need for more spending.

“There is no question as to the effectiveness of JobKeeper and JobTrainer [but] a pipeline of work is essential to the recovery of the industry and the economy,” Denita Wawn, CEO of Master Builders Australia, said.

“The massive contraction in demand that we are experiencing is due to the restrictions on economic activity imposed to save lives and therefore more successful stimulus measures such as HomeBuilder will be required to underpin recovery.”

The measures should businesses carry on for now and avoid the feared September ‘fiscal cliff’

Markets appeared to welcome the extension on Tuesday, with the ASX gaining around 1.4% by 1 pm, with investors seeing it as offering stability to the broader economy.

“When considered alongside the banks’ decision to extend the bank loan deferral period past September, the measures announced today, should help small businesses across the bridge and allow impacted households room to recover,” AMP Capital Australian equities portfolio manager Dermot Ryan said.

“[The changes] should smooth the path to the return to work of the large proportion of the population who have been impacted by the lockdown.”

JobSeeker cuts will plunge more than one million Australians into poverty

JobSeeker, formerly Newstart, hasn’t increased in real terms in around two decades. The fortnightly $550 coronavirus supplement had, however, helped lift it to a level in line with the rising cost of living.

The move to cut that payment has unsurprisingly been met with much criticism on Tuesday.

“Slashing income support in the middle of a recession won’t put a single additional person in a job – but it will push millions into poverty and put businesses out of work,” GetUp economic campaign director Ed Miller said.

Activists also don’t buy the Morrison government’s argument that heightened social security acts as a disincentive to out-of-work Australians.

“There are currently 1.7 million people on JobSeeker, and only 110,000 private sector vacancies. This data is a clear signal that the government’s stimulus has been inadequate and needs bolstering – not wind back,” Miller said.

He argues that a return to ‘mutual obligations’ — which require recipients to apply for a predetermined number of jobs to qualify — is a pointless exercise when applicants outnumber jobs 13-to-one.

While McManus is on a unity ticket with GetUp on these “punitive” measures, she welcomed the new capacity of welfare recipients to earn an additional $300 a fortnight through work.

Of course, it’s increasingly unclear who might actually be hiring the 1.6 million Australians on the allowance.

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