Tuesday, 12 May 2020
Pensions and Benefits
In March this year the government made one of the most significant changes to our social security system in Australia's history, doubling the rate of the jobseeker payment by providing the coronavirus supplement. The temporary increase to the jobseeker payment to $1,115 a fortnight was the first real increase in a long, long time. It's the first time the jobseeker payment—and before that, of course, Newstart—is above the poverty line for a long, long, long time. Unemployed Australians are finally able to afford basic daily expenses and essentials like food, utility bills, transport and clothing. That is a very, very important point to note.
There were also other changes made, such as suspending mutual obligations, changing income thresholds for partners on a number of payments and changing waiting times, and a number of other things were also dropped, highlighting the fact that the government knows these issues work as barriers to people getting quick support. Other waiting times for payments when people need ready access to an income are also very important. But the changes highlight the fact that the government knew these were a problem and needed to be dealt with. My argument here is: they're a problem when we aren't in crisis as well, when people lose their jobs and need to be able to access our income support system.
I will also note here that there are a number of groups and cohorts of people that in fact have not been able to access enough support. Those under 22 who don't live at home—some of whom are alienated from their families—are not able to access income support. People on DSP and carers payment have not had access to the supplement. I will talk about that further at a later stage. Visa holders are not able to access either jobseeker or JobKeeper.
The fact the jobseeker payment was increased by the government after years and years of resistance is an admission that people can't survive on $40 a day, especially during a recession. As we navigate our way out of a global pandemic, there are many things about the future that are uncertain, but one thing is crystal clear: we cannot go back to a world where people are forced to live, to try and survive, on $40 a day. We can't go back to the old rate, because when income support payments are that low people are trapped in poverty. It means they don't have the capacity to look for work because they are focused on where their next meal is coming from, how they will pay the rent, how they will pay the mortgage and how they are able to afford to send their children to school. Low income support payments are leading to poverty and have in fact led to poverty, and poverty, in and of itself, is a barrier to employment.
The Faces of unemployment 2020 report demonstrated that when someone has been unemployed for over a year their chances of getting a job fall by 40 per cent. In 2018 one in four jobseekers experienced long-term unemployment. We know that long-term unemployment has devastating consequences for people's wellbeing. Pushing jobseekers below the poverty line can condemn people to a cycle of long-term unemployment. The twin health and economic crises are not going to go away on 25 September this year, when the coronavirus supplement is due to end. There are over 1.4 million Australians on jobseeker at the moment, and some experts are saying it could go higher. Even the DSS, at the COVID inquiry hearing on the 30 April, said they were using estimates of 1.7 million by the end of September. In other words, we don't know if we're going to have more people on jobseeker by September. We will certainly have a large number of people on jobseeker come 25 September.
The economy is not going to miraculously snap back in September. This is a crisis that will have an enduring impact on our economy and on jobs for quite a long time to come. Many industries experiencing significant downturns will take time to recover. The coronavirus is already hurting those who are worst off. Those in the gig economy—precarious work—were the first to lose their jobs when the virus hit and unemployment figures started rising. But they had nothing to fall back on—no sick leave, no annual leave. The young have lost more jobs than other cohorts. Low-income workers are twice as likely to be out of work as high-income earners. In the week ending 18 April, almost twice as many women lost their jobs than men. While we plan for the recovery phase of this crisis, our responsibility is to look after people, to ensure that those on low-income payments are properly supported and to ensure that we do not leave people behind.
An Essential poll from last week indicated that 57 per cent of Australians believe that the jobseeker payment should not be cut down to the old Newstart rate. So what does keeping the jobseeker payment above the poverty line really mean for unemployed workers? Last week I asked those workers, what doubling of the jobseeker payment means for them. Here are a few of their responses: 'Dental for me; maybe save for braces for my boys; replace old broken furniture and one of my kids' beds; and, definitely not have to worry about food and bills for a while.' Another person said, 'My son has been able to not worry about putting petrol in his car for casual employment, as well as eating better than cheap, rubbish foods; buy shoes, socks and underwear; and pay his car registration without forgoing food.' Somebody else said that it means that they don't have to choose between going to the dentist or going to the psychologist.
These are the real, lived experiences of people who are now able to get that higher payment of jobseeker. These are everyday essential costs for anyone, and anybody should be able to afford them, whether they are on income support or not, and I would argue are very critical if you are looking for work. I find it untenable that the government is already so committed to ending the coronavirus supplement in September. While I don't know what the economy will look like in September, I do know that cutting income support is simply not the answer.
However, it's not only the rate of jobseeker payment that's important; employment services, which have always been so essential, are going to be even more essential with so many people looking for work. They are going to play an absolutely critical role in helping and supporting unemployed workers back into employment. Unfortunately, Australia has been massively underspending and underinvesting in employment services. Yes, I can hear people saying, 'We already spend quite a bit of money on employment services.' Unfortunately, we spend less than half the OECD average amount as a share of GDP on employment programs.
We have a system that puts compliance and penalties ahead of genuine support and assistance. People are cut off from their payments, very often through no fault of their own. Under our current system, providers are responsible for compliance at the same time as they are supposed to be building a trusting, supportive relationship with people in order to support them into work, to help them establish what their barriers are and to help them address them with wraparound services that are individualised, not a stamped-out job plan, which is what we are seeing—and we know that from the evidence. We know from the evidence—for example, through the targeted compliance framework—that, for a number of people who get penalty points, when it is looked at, it is found that the person's job plan is in error or does not meet their needs. It is time that we invested more in our employment services, that we provided that supportive wraparound, individualised support for people looking for work. It has never been more important than now to make sure we get that right. But it's also absolutely critical that we don't go back to $40 a day—that we retain the rate for good for both jobseeker and youth allowance. Retain the rate.