JobSeeker cut to plunge Canberrans into poverty, new analysis

Just days after the JobKeeper program wound up, thousands of Canberrans are bracing for the removal of a top-up payment credited with lifting millions of people out of poverty at the height of the coronavirus crisis.

While the base rate for JobSeeker will be permanently increased by $25 a week from April 1, the axing of the $150 fortnightly supplement will represent a cut to overall income for recipients.

As the Morrison government continues to defend the new rate as the most significant rise in 30 years, progressive think tank The Australia Institute has released modelling on the number of people forecast to fall into poverty after the supplement is axed.

The analysis, prepared by consultants Communities in Numbers, estimated that a further 155,000 people Australia-wide would be pushed into poverty, bringing the total number to 4.5 million.

That would mean the number had increased by more than 1.05 million from last March, when the introduction of the supplement - then set at $550 per fortnight - almost instantly pulled 470,000 people above the poverty line.

The research estimated about 1000 Canberrans, including 300 children, would fall into poverty after April 1.

Had the supplement been restored to its original level, which almost doubled the old Newstart rate for single adults with no children, the modelling suggests about 9500 Canberrans would be lifted out of poverty.

The modelling used the Henderson formula, which currently sets the poverty line at $592 per week for single adults.

The base JobSeeker rate will rise to $620 per fortnight - or $310 a week - for single adults from April 1, up from $565 a fortnight.

In a report examining the research, Australia Institute senior economist Matt Grudnoff said the Morrison government's decision to axe the supplement was a "wasted opportunity".

"The coronavirus supplement was very successful in reducing poverty in Australia, including among Australian children," his report said.

"But the government's subsequent cutting of the supplement has wiped out those gains.

"The government showed how easy it was to substantially reduce poverty in Australia when it lifted almost half a million people out of poverty with a single policy change.

"By the time the coronavirus supplement ends, and JobSeeker base rate is increased by $25 per week, a million more Australians will be in poverty, than were a year ago, including over 200,000 children."

While the ACT has the nation's lowest unemployment rate, there were still more than 10,500 locals either on JobSeeker or Youth Allowance as of mid-March, according to the latest Department of Social Services figures.

That number might rise in the coming months, with Treasury estimating up to 150,000 Australians could be pushed onto the jobless queue after the JobKeeper wage subsidy was pulled on March 28.

Hackett resident Lachlan McGowan, who has been on unemployment benefits for the past six years, said the $550 per fortnight supplement had allowed him to pay for much-needed medical treatment and even an engagement ring for his long-time partner.

Cuts to the size of the supplement in September and December had resulted in a "slow stepping back from the actual functioning life" the pair had been able to lead when the payment was at its peak, he said.

Mr McGowan said when the payment was axed altogether on Thursday, rent, food and bills would consume all of his household income.

"That will be our life, that will consume the entire paycheck," he said.

Job seekers will also face new "mutual obligations" from April, including a requirement to apply for up to 15 jobs from next month. That number will rise to 20 per month in July.

A new hotline - which critics have dubbed "dob-in-a-seeker" - will also be set to up to allow employers to report welfare recipients who have turned down jobs.

Mr McGowan, who studied science and communications at university but has been unable to find a job since graduating, said the new regime would be "hell on earth".

The 28-year-old, who is a member of the Australian Unemployed Workers Union, said he was trying to set up his own business, having all but given up on someone hiring him.

"I have sent out thousands of resumes over the past six years. I've received no interviews and maybe two callbacks," he said.

"I can no longer believe that the job application process even works.

"I don't know how people get jobs anymore".

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The Canberra Times asked the office of Social Services Minister Anne Ruston if her department had modelled expected poverty levels after April 1, but did not receive a response.

Instead, Senator Ruston's office provided a statement which defended the changes in the context of Australia's strong economic recovery. The $50-per-fortnight increase to JobSeeker will cost the budget $9 billion over the next four years.

"The fact is that Australia has outperformed all major advanced economies on the economic front in the last 12 months," her spokeswoman said.

"Jobs are returning and the number of unemployed persons for every job vacancy has since fallen below pre lockdown levels to 4.2 unemployed persons per vacancy.

"The Morrison government has stood side-by-side all Australians during the pandemic and we will continue to do so with our delivery of the single biggest year on year increase to the rate of unemployment benefits in more than 30 years."

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