Treasurer 'leaning' towards JobSeeker extension

Treasurer Josh Frydenberg. Picture: Sitthixay Ditthavong
Treasurer Josh Frydenberg. Picture: Sitthixay Ditthavong

Treasurer Josh Frydenberg has hinted the JobSeeker coronavirus supplement could be extended into next year, as the payment began to wind down on Friday.

JobSeekers will be $300 per fortnight worse off after the coronavrius supplement was reduced from $550 to $250 per fortnight.

The temporary welfare top-up, introduced in March amid massive layoffs during the first coronavirus shutdown, is due to be discontinued at the end of the year.

But Mr Frydenberg indicated the payment could be extended beyond that date, as the country recovers from the pandemic-induced recession.

"As a government, later this year, we'll make a decision about further support for people in JobSeeker, but we're leaning in on continuing to provide support as required," Mr Frydenberg said.

Welfare and business groups have raised concerns about the impact of the reduction on the broader economy.

ACT Council of Social Service chief executive Dr Emma Campbell said more than 22,000 people in Canberra would fall below the poverty line when the payment was slashed.

Modelling from Deloitte Access Economics found the cut to the JobSeeker supplement in the ACT would reduce consumption per person by $504, and result in the loss of 1120 full-time equivalent jobs in Canberra in 2021-22.

However, Mr Frydenberg said the budget would contain other measures to boost the economy.

"We have many initiatives and many more that will be in place following the budget in just under two weeks' time to boost aggregate demand, to put money into the economy, to increase spending and economic activity and create jobs," Mr Frydenberg said.

Meanwhile, financial counsellors are bracing for a spike in calls, as JobSeeker and the JobKeeper are reduced.

From Monday, the wage subsidy will go from $1500 per fortnight to $1200 for full-time workers and $750 for part-timers.

CARE financial counselling and consumer law centre chief executive Carmel Franklin said demand for their services had fallen, due to the extra government support and hardship programs in place.

As those programs, as well as rent and mortgage moratoriums ended, Ms Franklin said more and more people were asking for help.

"[The coronavirus supplement] has put them in a position where they can actually afford to cover their household living expenses," Ms Franklin said.

"If that goes down again we're going to see people who have already spent many years doing it tough, just find it harder and harder to manage their ongoing costs, having to make decisions around medication versus food, really tough decisions because their income is going to go back to something that's really not sustainable to live off."

Ms Franklin was also concerned the increased complexity of the scheme could lead to more people misreporting their income, leading to debts down the track.

"I think there is confusion generally from people about whether the're eligible, what they need to report, so there's always risks about that," Ms Franklin said.

Monday also marks the return of mutual obligations reporting for JobSeekers.

Thinktank Per Capita warned the cost of the JobActive scheme could blow out to $2 billion, as 1 million Australians look for work.

Before COVID-19, there were around 600,000 people participating in the program, which was estimated to cost around $500 million per year.

"As the current caseload is now one million, this means there are an additional 400,000 people in JobActive and that the expenditure will need to increase by two thirds," their report said.

"With more than $800 million in extra funding required to accommodate this increased demand on the system, it seems likely that a figure in excess of $2 billion will need to be appropriated in the forthcoming federal budget."

This story Treasurer 'leaning' towards JobSeeker extension first appeared on The Canberra Times.