The Morrison government has announced a permanent increase in jobseeker payments of $50 per fortnight – just $3.57 per day – when the coronavirus supplement expires at the end of March.
Scott Morrison said the measure, to cost $9bn over four years, would lift unemployment benefits back to 41.2% of the national minimum wage, in line with the level during the Howard government.
After Guardian Australia first revealed the scale of the base increase earlier on Tuesday, welfare organisations warned that job seekers would be plunged back into poverty when the pandemic supplement ends and once again be forced to choose between basics such as food and medicine.
Earlier, the shadow social services minister, Linda Burney, told the Labor caucus meeting it would study the detail but the opposition had no intention of standing in the way of any increase in jobseeker.
Changes in the level of jobseeker will be accompanied by an enlargement of the income-free area – the amount recipients can earn before it cuts into their benefit – and restoration of mutual obligations requiring jobseekers to attend face-to-face meetings and apply for jobs.
At a press conference in Canberra, Morrison presented “rebasing the payment” – reducing it from the pandemic level of $715 per fortnight to $620.80, including indexation – as a necessary change as the economy “changes gears” and recovers jobs.
Asked about the adequacy of the payment, the prime minister recognised that “there will always be suggestions by some that it should be more”.
Morrison said indexation in March would further lift jobseeker to $44.35 per day. He cited a range of other supplements including rent assistance of $140 per fortnight and standalone supplements (such as the energy supplement) worth an average of $13.
The social services minister, Anne Ruston, said that 1.95 million people received jobseeker and other working age payments. Ruston said that 240,000 single parents, 220,000 people who are over the age of 60 or who have a caring responsibility for a child over the age of eight, and 290,000 on commonwealth rent assistance will receive higher payments.
Ruston said the level of the payment was “fair and sustainable” and the government needed to balance “support for people while they’re looking for work” with the incentive to look for work.
Ruston said the government would extend the waiver of the waiting period for jobseeker until 30 June and set the income-free area for jobkeeper and youth allowance at $150 per fortnight, creating a “greater incentive” for people to “put their toe in the water and test the job market”.
Although unemployment has dropped to 6.4%, there were still 877,600 people unemployed and looking for work in January. In November, there were 254,000 job vacancies.
The skills and employment minister, Michaelia Cash, announced that mutual obligations would be reinstated including a requirement to attend face-to-face appointments with job service providers. Job seekers will have to apply for 15 jobs a month, which will rise to the pre-pandemic level of 20 in July.
Cash said that after six months job seekers will be required to “enter into an intensive training stage”, such as attending a short course.
Cash also announced a new employer hotline to dob in people who turn down a job offer – something she said “you often hear” happening.
The Greens’ social services spokeswoman, Rachel Siewert, said the measure, which could mean job seekers have payments docked, was “just awful” and described mutual obligations as an “insidious” system.
This is just awful. An employer reporting line so employers can dob in people who are already heavily monitored with demerit points and the constant threat of payment suspensions.
— Rachel Siewert (@SenatorSiewert) February 23, 2021
What is the Government doing about the #Jobactive system that is fundamentally broken?
Despite concerns in the Coalition that jobseeker and jobkeeper wage subsidies are a disincentive to work, in June Guardian Australia revealed claims that business owners were struggling to recruit staff because of a lack of applications were based on just 72 responses from a survey of 2,324 employers.
The rest were either not hiring, were able to find staff, or did not attribute the failure to lack of applications.
Although Labor has yet to nominate its preferred level for unemployment benefits, Burney told caucus jobseeker should ensure dignity, alleviate poverty and help people into jobs.
The Australian Council of Social Service chief executive, Cassandra Goldie, said even at the elevated coronavirus supplement rate of $51 per day “people on jobseeker are being forced to make impossible decisions, choosing between housing, food, medications, basic toiletries and paying bills”.
“This is a heartless betrayal of millions of people with the least, including hundreds of thousands of children, single parents, people with disability, older people, students, people dealing with illness and injury, and others relying on income support.”
Goldie noted there is currently “only one job available for every nine people looking, with even less in regional areas”.
Kristin O’Connell, a spokesperson for the Australian Unemployed Workers’ Union, said “the government showed last year that they can lift millions out of poverty overnight, and they can easily do the same now”.
“There are not enough jobs,” O’Connell said, and called for billions of dollars given to job service providers to be redirected to “care for people who are locked out of work”.
Anglicare Australia’s executive director, Kasy Chambers, said jobseekers had been “lifted out of poverty in 2020” with the $550 fortnightly coronavirus supplement “only to have their payments cut again and again with no certainty”.
“Now their payments will be cut to almost half of the poverty line,” she said. “That’s not good enough.”
Lyn Edge, the head of the Salvation Army’s social services, said the increase “does not even begin to address the depths of disadvantage in Australia”.
“This cannot be the end of the conversation.”