Updated
Unemployed Australians have welcomed a
coronavirus-led boost to payments, but despair that it has taken a
pandemic to increase their income to a level that lets them eat three
times a day.
Key points:
- The JobSeeker supplement has been called the biggest single increase in unemployment benefits since the 1940s
- Previously $550 a fortnight, it has risen to $1,100 a fortnight, which is above the poverty line
- More than a million people are believed to have become unemployed in the past two weeks due to public health measures
"I'm absolutely furious," said Avery Howard, 18, who has been part of a broad coalition of business leaders, union bosses and peak bodies who spent years campaigning to raise the Newstart rate from about $40 a day.
"There's been so much talk about how the payments are not liveable, and the big thing it took to change it was a major public health crisis. I'm furious."The Newstart allowance of around $550 a fortnight, re-named "JobSeeker", has effectively been doubled from today by a temporary Coronavirus Supplement.
It takes the baseline payment to $1,100 a fortnight — above the poverty line — and will also be automatically paid to people who receive the Sickness Allowance, Youth Allowance, Austudy and Parenting Payments.
Mr Howard has not been financially supported by his parents since the age of 15.
He has spent three years surviving on Youth Allowance.
"I said it to a friend the other day and it struck me how crazy it is, but I told them: 'I've just gotten used to not having as many meals as I'm supposed to'," Mr Howard said.
"It's been astoundingly difficult. I spend all my time watching every cent I have. I have to make sure I'm not [missing] a bill and going into debt."
'Newstart recipients were starving themselves'
Jeremy Poxon of the Australian Unemployed Workers' Union calls the supplement the biggest single increase in unemployment benefits since the 1940s."Before the rate was doubled we knew a majority of Newstart recipients were starving themselves to survive on the entitlement," he said.
"The rate was so brutally low that people just couldn't afford three square meals a day."More than a million people are estimated to have become unemployed in the past month because of public health measures to stop the spread of coronavirus, such as preventing large gatherings and shuttering bars and restaurants.
From today many of those people should receive the JobSeeker payment and the Coronavirus Supplement.
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The long-term unemployed and those already registered for Newstart will receive it too.
A surprising coalition of business groups — including the Business Council of Australia and the AI Group — joined social service organisations in unsuccessfully pushing Australia's major political parties to raise the $40 a day rate of unemployment payments, arguing the low payment was hampering economic growth and excluding people from being able to join the workforce.
"The minute the COVID-19 crisis hit people realised very, very quickly," said chief executive of the Victorian Council of Social Services, Emma King.
"We had people saying 'Well, we can't have people living on $40 a day', even though that's what had been happening to people who are finding themselves on unemployment benefits for the last 25 years."The way social distancing required the rapid shutdown of industries — and caused huge queues outside Centrelink overnight — had changed views, she noted.
"I think what we've seen before is real commentary around the 'deserving' and the 'non-deserving'," she observed.
"Instead we're seeing that anyone can find themselves out of a job and anyone knows that they simply cannot get by on $40 a day."
On behalf of his members, Mr Poxon is more blunt.
Your questions on coronavirus answered:
"Long-term unemployed Newstart recipients have been telling us how interesting it is that now that wealthier people — the people who are not 'meant' to be unemployed — are unemployed, that they're getting all these concessions," he said.
"That the Government can click their fingers and double the Newstart rate and waive now a lot of the punitive eligibility requirements."
But he is delighted that the boost has occurred, at least temporarily.
"Upwards of a million people are going to be able to regularly put food on the table, they're going to be able to afford to pay their bills," Mr Poxon said.
"A lot of people are already telling us they're lining up medical expenses and treatments that they've had to put off for years now."
'There's room to decide where my dollars are going'
Mr Howard is looking forward to building a small buffer of savings, saying this is "the dream", and not spending hours a day concerned about where his next meal is coming from."It's going to be a massive change. Just the psychological impact alone, I don't have to be as meticulous as I have been, there's room — not to be careless — but to have more of a decision to where my dollars are going," he said.
There is an economic benefit as well. Because low-income earners have such a small cushion of savings, money they are given gets spent — supporting business.
More than 6 million people who were already on Newstart, the Aged Pension and the Disability Support Pension received $750 stimulus cheques this month.
What the experts are saying about coronavirus:
Bank data shows nearly half of the $4.5 billion was spent in the first fortnight.
"We've seen really clear evidence that those recipients — and remember this was targeted to low-income groups who were more likely to spend the money — and those people did spend it," said Andrew Charlton, director of illion & AlphaBeta (part of Accenture).
Dr Charlton helped devise the stimulus package that helped Australia be the only developed economy to avoid a recession in the global financial crisis of 2008 and 2009.
He said stimulus packages had a bad reputation because people thought the money would be saved or spent on frivolous items and activities.
"People accuse it of being blown on pokies and flat screen TVs," he said. "What we've seen in this crisis, with real data, is that neither of those things are true.
How fast is coronavirus growing around the world?
"The stimulus has been well-targeted to low-income people who are going to spend it.
While the Coronavirus Supplement could be unwound, reducing the renamed JobSeeker payment to the historically low level of Newstart, Ms King is hoping that does not happen: for the people on it, and the broader economy.
"There's a double benefit here, that people can actually afford to rent somewhere and they can afford to participate in society in a way that they simply can't on $40 a day," she said.
"So there's both a moral and economic very strong argument as to why they should be left as it is."
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