Parliament Updates

Zali Steggall MP says the proposed rate for Jobseeker is not fair or dignified

17 March, 2021


I rise to speak on the Social Services Legislation Amendment (Strengthening Income Support) Bill 2021. This increase to what was called Newstart, now renamed JobSeeker, has been long called for, but it is disappointing and, unfortunately, what is being put forward by the government is not a solution.

To provide baseline understanding in our discussion of this bill, I note that JobSeeker is due to return to the pre-COVID rate of Newstart, at $40 a day. In this bill, the proposal is that that be increased to $43.50 a day. Even with concession rates, that won't even get you to the city on the Manly ferry. So people living on JobSeeker and other payment types need a greater level of support to help them transition back into the workforce. This is a measly measure by the government that falls short of what is needed, and I've impressed upon the minister that much more is needed and this doesn't even begin to resolve this issue. People need to be able to pay the bills and still get the ferry to the city. They need to be able to go to the job interviews. If they are not, we will not get them back into the workplace.

We need to return to a more dignified approach to social security, going back to the roots of the Liberal Party. Sir Robert Menzies, who so many in this government revere and often quote, said:

The purpose of all social security measures is not only to provide citizens with reasonable protection against misfortune, but also to reconcile that provision with their proud independence and dignity as democratic citizens.

I do not believe maintaining the rate of JobSeeker significantly below the poverty line can be reconciled with the proud independence and dignity of Australians.

In my view, JobSeeker should be at least $60 a day. That's under 90 per cent of the pension rate and on the upper end of the bracket put forward by the Business Council of Australia. The Australian Council of Social Service recommends that the rate should be $65 a day, just under the pension, which is $67. Chris Richardson of Deloitte Access Economics argues that it should be around $58 a day to be comparable to when the rate was indexed to inflation in 1994. So it's clear that, at $43.50, the government is way off the mark from all advice. All of these rates proposed by business, the social sector and economists are significantly higher than the proposal of $43.50 a day by the government.

The government emphasises that the increase in this legislation is a $9 billion direct cost to the budget over the forward estimates—four years—but completely fails to recognise that you get back a dividend of $2 for every $3 by way of a bigger economy. It's an argument we hear in relation to so many other spending measures, but, when it comes to this measure, the government is conveniently silent about it. People with less money are more likely to spend it, because they need to. They buy food, pay rent and buy other essential items. Rebekah, a JobSeeker recipient, said:

The businesses that would receive the money as soon as I get it are no longer going to get that money, so that's going to affect my local shops.

It comes back to the economy and boosts it from the bottom up. In Australia, we have one of the world's highest minimum wages, but, relative to that, we have one of the lowest rates of unemployment benefit. The disincentive to work is not there, as claimed by so many members of government. The high rate of minimum wage is a huge incentive to work. When working two days a week at the minimum wage you will earn more than you can earn on JobSeeker. The incentive is there.

Jeff Borland of the University of Melbourne told The Australian:

To be honest, I can't remember a policy change I have been more disappointed about … Here was an opportunity—by giving a significant increase—to have a real impact on living standards of people experiencing hardship and provide a macroeconomic benefit without there being any likelihood of a negative effect on incentives for unemployed jobseekers to find work.

Independent economist Nicki Hutley estimates that we could lose 100,000 jobs as a result of the combined end of the coronavirus supplement and JobKeeper. I would argue it is mismanagement by the government to be ending both measures at the same time. Nicki Hutley said:

… we've got millions, literally, of people both on the JobSeeker supplement and on the JobKeeper allowance, and pulling those out of the economy… it's probably equivalent to around $5 billion a month … That's equivalent to roughly 3 per cent of GDP—

that's going to be pulled out. That is a very significant hit to the economy. The economists lined up with the business groups, including the Business Council of Australia and the Council of Small Business Organisations Australia, to say that we need to increase the JobSeeker permanently to 'a reasonable level'. This is not it.

In Warringah, we saw the number of people on JobSeeker and youth allowance triple during COVID-19. That's more than 2,000 individuals who had not been on payments prior to the pandemic who now are. We also have over 4,000 businesses on JobKeeper. Many of those receiving JobKeeper will likely shift over to JobSeeker at the end of the month. This drop-off in support places people in Warringah in a very difficult position.

In Warringah, we have amongst the highest cost of living in the country. We've also got a large tourism and hospitality sector that's been devastated by the pandemic, especially through the Christmas lockdown, without any support from the government. Our electorate will feel the end of JobKeeper and, at the end of the coronavirus supplement, the move to other payments acutely. The events industry is still struggling. There are no plans, and there are no packages put forward by the government. There are more than 17 travel agents in the electorate with little to no work as a result of the international borders still being closed, and I should note that the recent announcements in relation to travel subsidies does not automatically flow to travel agents in all industries; it has gone to airlines, essentially. And we still do not have any long-term policy in relation to our borders from the government. There is an indefinite wait for borders to reopen and for Australians caught abroad to be able to come home, so we actually need some long-term planning.

I can accept that for the first month, March of 2020, an immediate response was needed, but we are 12 months on and we are still in a situation of closed borders, impeded travel and Australians being unable to return. It is, with respect, not good management and not acceptable. Ending the coronavirus supplement at the same time as ending the JobKeeper wage subsidy is a mistake. It will hurt both businesses and individuals, and this bill does little to alleviate that pain.

This bill is a permanent increase of $50 per fortnight to the base rate of JobSeeker. To be very clear to people listening, that's actually a decrease of $100 a fortnight from what they are currently receiving today. They will also soon have their payments impacted by other income. If any jobseeker starts earning an income, they are currently able to earn up to $300 per fortnight before their JobSeeker payments are impacted. Under this bill, that is halved to $150 per fortnight. That means if you get just one eight-hour shift in a local cafe at minimum wage in a fortnight your payments are already impacted. Surely people should be able to get at least a shift per week before their payments start going down, especially given that, even with one shift and the base rate of JobSeeker, you're still below the poverty line. The poverty line in Australia is currently around $457 per week. If you're on JobSeeker and you get one shift at a minimum wage, you will receive a grand total of $382 per week, still below the poverty line. Adding in rent assistance, which is a maximum of $78 a week, you are pretty much on the poverty line. But I should note that in Warringah, the median rent was, at the time of the census in 2016, $580 a week. So unemployed people in Warringah have no chance under the government support in this package.

The conversation about who is on JobSeeker and other payments is incredibly important as it provides some guidance about where we need to inject stimulus into the economy. It is all too often demeaning and incredibly insulting when members of government describe this in a very dismissive way, and really, I would say, prey on the more vulnerable in our society that are needing the assistance. Older people represent a growing proportion of those on JobSeeker. Let's be clear: ageism is real. As of September last year, 42.6 per cent of those on JobSeeker were aged over 45, and 32,000 people on JobSeeker were over 65. These people are increasingly making up the long-term unemployed. With respect to the government, it is incredibly hard for older people to find a job, particularly when there are programs that are incentivising the employment of younger people. It is not for lack of trying. Older people are trying to either find new professions, pivot, adapt to new professions or find new opportunities, but they are looking for work. Once losing work, they find it incredibly difficult to find employment again. For some, their skills don't match the needs of the workforce of today. For others, they're seen as overqualified for the roles available and not likely to be a good long-term employee. There has not been the shift to properly appreciate their experience and what they can contribute. This group are at a great risk, and without adequate support, they face a very uncertain future. It's no wonder, therefore, that women over 55 years of age represent the fastest growing group suffering from homelessness. That should be an incredible shame and stain on everyone in this place. We need to find employment solutions for this older generation, opportunities to retrain and policies to incentivise employers to take them on.

Women will be greatly impacted by the removal of the coronavirus supplement. In a month where the government's issues with women have been highlighted, this should be a very clear focus of the government as it prepares for its May budget. Jenny Davidson, the Chief Executive Officer of the Council of Single Mothers and their Children says:

The struggle to feed, house and provide for their families on so little money takes up time and energy that then can't be invested in parenting, studying, or seeking work.

So let's be very clear: by not adequately supporting older women, the government is also impacting the outcomes of their children and their families. Local and state services will be left to try to fill the gap with emergency relief and food packages and expect to be overwhelmed from April. As at September 2020, 46 per cent of people on JobSeeker were women. Among the parenting payment singles, that proportion is 95 per cent. Over a million children live in homes receiving the coronavirus supplement. The supplement has been the game changer for so many women and their families. There have been so many who have finally had the financial stability to leave abusive relationships. There are others who have been able to afford new clothes for their children for the first time.

The financial empowerment that has been delivered by the increased supplement cannot be underestimated. This is the benefit of treating all jobseekers with dignity and fostering their proud independence. We need to deliver this security on an ongoing basis to make sure that people remain functioning members of society. Without the additional support, people suffer, and children suffer, and they're unable to maintain functional positions in society or achieve their full potential—and this ultimately costs more down the line. Let's be very clear. Our health services and many other aspects of our society pay the price when we are not adequately supporting the cohort that find themselves unemployed.

I implore the government to do more to help women and older workers as you deliberate and consider prebudget submissions before the budget in May. It is so important that this be the focus of the budget this year. Without additional support, people suffer and they're simply unable to maintain functional positions within society and achieve their full potential, and we will all pay the price for that. If you won't listen to so many sectors and raise the JobSeeker rate by a substantial amount permanently, look closely at those most at risk and deliver tailored packages for them in the next budget.

Unfortunately, we're in a position where there is no choice but to support the bill, because we would not begrudge the small increase, the meagre increase, that is being provided. But it is so disappointing when there was an opportunity to lead on this. The government had an opportunity, post the coronavirus supplements, to actually implement a policy that could bring dignity and an adequate level of support—and this level of support has been called for by so many in our community. Treat those on social security with dignity and develop their proud independence. There are economic and health benefits to a more substantial safety net. Ripping all this stimulus away at the same time will have dire consequences. I urge the government: listen to your communities.