Who the supplement cut will hurt most

The Morrison government’s decision to cut the JobSeeker coronavirus supplement down to just $150 per fortnight will throw hundreds of thousands of Australians back into poverty.

Two different sets of modelling were released on Wednesday showing that the cuts, announced by the government last week and set to come into effect from January 2021, would be disastrous for many Australians who had come to rely on the payment.

Figures from The Australia Institute revealed that the decision would push an additional 190,000 below the poverty line, while Australian National University (ANU) modelling revealed a much worse fate, with 330,000 people expected to fall below the line.

The coronavirus supplement will be extended beyond the current 31 December cut-off, for a further three months but at a reduced rate of just $150 per fortnight, down from the $550 a fortnight when it was first introduced, and $100 a fortnight less than the rate at which it has been paid since 25 September.

The Australia Institute’s state-by-state breakdown shows the cut to the supplement will see:

    • 53,000 more people in Queensland pushed into poverty

    • 52,000 more people in Victoria pushed into poverty

    • 51,000 more people in New South Wales pushed into poverty

    • 19,000 more people in Western Australia pushed into poverty

    • 12,000 more people in South Australia pushed into poverty

    • 5000 more people in Tasmania pushed into poverty.

The Australia Institute’s Matt Grudnoff said that government risked undoing all the good work that helped many Australians through a difficult time.

“The JobSeeker supplement has been the only thing standing between many recently jobless Australians and poverty,” Mr Grudnoff said.

“(Reducing) the JobSeeker supplement will result in hundreds of thousands of Australian families being pushed below the poverty line – it means a struggle to put food on the table, to pay rent or service mortgages, and it will cause acute pressure on people in an already turbulent time.

“No other government has ever lifted so many people out of poverty so quickly than the Morrison government did with the coronavirus supplement.”

He said the supplement had been an essential part of the response to the recession that had improved the lives of nearly half a million Australians and it was disappointing to see the government now intent on pushing them back below the poverty line.

“Punishing the unemployed during a recession, when there are more than 10 unemployed people competing for every one job vacancy, is simply cruel. Now is the time to support the unemployed, not punish them for losing their job,” he said.

The ANU modelling, which was released to The Guardian, forecasts that the number of people living in poverty would increase from 3.49 million to 3.82 million by January as a result of the cuts.

Ben Phillips, from the ANU, said that his modelling sets the poverty line at $370 per week, which is 50 per cent of median income, after housing costs.

The ANU modelling also takes into account Treasury forecasts that predict the number of people receiving the JobSeeker payment would increase from about 1.5 million to 1.8 million by Christmas.

Mr Phillips told The Guardian that the decision to cut the supplement risked creating different classes of welfare recipients.

“You’ve got the JobSeeker rate of $715 per fortnight and the JobKeeper rate at $1200 per fortnight,” he said.

“Initially there was a gap of $380 per fortnight, now that’s really ballooned. Those on JobKeeper are above the poverty line, those on JobSeeker are below it.”

Should the government be doing more to encourage spending during a recession? Do you support a permanent increase to the JobSeeker payment?

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Written by Ben