JobSeeker Hypocrisy: ‘rule of law’ for Porter but not for those below poverty line

by | Mar 12, 2021 | Economy & Markets

Eight people are competing for every available job yet the Morrison Government continues to blame people themselves for being unemployed, putting the Coalition in breach of a key international treaty for as long as it refuses to raise JobSeeker to the poverty line. A Senate Committee hands down its report into JobSeeker when Parliament resumes next week. A clear commitment to increase the rate by of $250 a fortnight is vital to put pressure on the Government to do the right thing, legally and morally. Emma Dawson reports.

So much talk from the Coalition Government about the importance of the rule of law. So much hypocrisy because the Coalition continues to be in breach of a key international legal treaty yet is showing no desire to rectify that breach.

The right to an “adequate standard of living” and the right to social security are key planks of the International Covenant on Economic, Social and Cultural Rights. The Covenant is legally binding on nations that have ratified it, which Australia did in 1975. In fact Australia was a key driver in creating the Treaty.

Yet far from providing an adequate standard of living, government policy has, for 25 years, deliberately kept in poverty people reliant on unemployment benefits. The base rate of JobSeeker is $570.80 per fortnight, and the government recently announced a $50 a fortnight boost to lift it to just $620.80.

Back to 2007

While this first real increase since the 1980s is welcome, this amount is manifestly inadequate and simply takes it back to where it was in 2007 – at 41% of the minimum wage. It will keep those reliant on it living well below the poverty line.

There are a number of ways to calculate the poverty line. We have used the measure that offers the lowest increase the government needs to put on the table so it can claim JobSeeker is above poverty levels.

Researchers at the Centre for Social Research and Methods (CSRM) at the Australian National University define the poverty line as being one in which a household’s income “is less than half the value of the median household disposable income across all households”.

By this calculation, which is lower than some other poverty line measures, the increase to JobSeeker needs to be at least $250 a fortnight. In defending its paltry $50 a fortnight offer, the Government argues that a low rate is necessary to provide an incentive for people to work.

This claim has been thoroughly debunked by labour market experts. Professor Jeff Borland at the University of Melbourne has found that “[t]he size of the JobSeeker payment could increase by a substantial amount without significantly reducing the relative monetary returns from working compared to receiving only the payment”.

Indeed, Borland’s research shows that an increase of $250 per fortnight would put JobSeeker at only 54.1 per cent of the national minimum wage. With 99 per cent of full time workers in Australia earning more than the increased payment, there would still be a significant financial incentive for people to seek more hours of work.

And although the Government trots out claims that employers are finding it hard to fill minimum wage jobs because people are “better off” on JobSeeker, there is no empirical evidence of this.

Even at the much higher rate of JobSeeker under the full Coronavirus Supplement of $550 a fortnight in place last year, labour force data showed the number of people moving off JobSeeker and into (more) paid work did not fall.

Cuts to JobSeeker, Jobkeeper: out of the frying pan and into the fire

Unemployment benefits have fallen so far below the poverty line since the 1990s is because of the way cost-of-living increases are calculated. In 1997, the Howard Government introduced automatic benchmarking of the age pension to 25% of Male Total Average Weekly Earnings, but deliberately did not include working age income support payments in the relevant legislation, instead leaving them linked to the Consumer Price Index (CPI).

It is wages, not CPI, that establishes living standards in Australia. Because wages grow faster than the rate of CPI increase, John Howard’s decision has seen the standard of living of people who are unemployed fall far behind those not just of working Australians but also of age pensioners over the past 24 years.

It is critical that the rate of JobSeeker be indexed to wages. If not, un- and under-employed Australians will continue to fall further into relative poverty – and remain there for increasing periods of time.

For far too many people, unemployment is not a short-term experience. In fact, since the Coalition Government came to power in 2013, the number of people who rely on unemployment payments for more than five years has doubled to more than 200,000.

Where are the jobs, PM?

On average, eight people are competing for every available job. The jobs needed to provide work to all who it just aren’t there. Meaningful job creation policies from the Morrison Government are hard to find, beyond its ill-conceived JobMaker hiring credit.

The Senate Community Affairs Committee met this past week to consider the Government’s legislation to increase the rate of working age income support payments, including JobSeeker, by just $50 per fortnight.

The Senate has already passed a motion calling on the Government to increase JobSeeker to at least the poverty line, with only government senators voting against it. The Community Affairs Committee hands down its report before Parliament resumes next week. We should expect it to support of an increase of at least $250 a fortnight – the minimum required to meet the poverty line.

A clear alternative figure, one that is grounded in economic fact and supported by the Labor Opposition, is needed to put pressure on the Morrison Government to do the right thing, legally and morally.

ABOUT THE AUTHOR

Emma Dawson

Emma Dawson

Emma Dawson is Executive Director of public policy think tank Per Capita. She has worked as a researcher at Monash University and the University of Melbourne; in policy and public affairs for SBS and Telstra; and as a senior policy adviser in the Rudd and Gillard Governments. Emma is a regular contributor to Guardian Australia and The Australian Financial Review and a frequent guest on ABC radio programs nationally. Emma is the co-author of Per Capita’s report "Measure for Measure: Gender Equality in Australia", and co-editor of the collection of essays "What happens next? Reconstructing Australia after COVID-19", published by Melbourne University Press.

8 Comments

  1. Avatar

    Will somebody PLEASE mention the partner income threshold? My partner grosses roughly equivalent to the partnered rate of “the dole”, so I get nothing. Not even counted as unemployed. They lowered the threshold for COVID, but now it’s gone back up.

    • Avatar

      Exactly! Has always been that way for as long as I can remember.

  2. Avatar

    Yes! My partner earns too much for me to qualify but we cannot live off his wage alone. Rent wipes out so much, we have a one year old and I just got made redundant. The threshold also needs to be raised, along with the rate, we all pay so much in taxes, give to those who need help!

  3. Avatar

    It actually gets worse if you become too sick for your nomal occupation. Centrelink claims to have their own medical experts and claims that your Doctor has an incorrect diagnosis and prognosis. After a number of years of shuffling cash to pay essentials you have no way of even getting to interviews for things that you are not physically able to do. They have a policy that if you give them 3 medical certificates with the same condition they even reject your doctors opinion and send you back to work for the dole projects. For me they once rejected a certificate that had been written by an Orthopedic Surgeon, and on appeal, they had a Physio that also thought they knew better, so ended up back on crutches in under 5 days back at WftDole activity. Nearly 11 years now, after 37 years of working, farmer lobby people say they have no workers yet around here there is people attending work for the dole while they bus in travellers because some supervisors are lazy and want eager destitute people (they are easier to abuse) instead of willing workers.

    • Avatar

      I had the same thing happen , then the person I was talking to at centrelink said “apply for the DSP” , so I did and got rejected asI was not deemed disabled enough and ended up back where I started , still sick and not really well enough to work and not sick enough to get the DSP .

  4. Avatar

    HOward ..oh and COSTello …? say no more .

  5. Avatar

    The unemployment figures are never correct. Like many , my husband earns too much for us to receive any benefits, however we are not able to sustain our living on his wage alone. Our mortgage and general living means we go backwards every month, and despite applying for over 150 jobs in the past 12 months, (after being made redundant) I have had 4 interviews and still not secured any work.
    My status of unemployment is not in the current figures therefore the rate of people looking for jobs must be way higher.

    Another investigation into this is the wages these companies are offering, for experienced people. Almost all jobs I apply for the salaries are so low, and part of the application process is they ask you to state the annual salary or hourly rate expectation , and if you pitch it incorrect you are often overlooked. How is this fair?

    Searching for work is demoralising whether experienced or not , shame on the government for thinking we are sitting back and not trying, let them walk in my shoes

  6. Avatar

    During his annual conference with the Prosecutor General’s Office Board Putin said,

    “First of all, I would like to say that the prosecution authorities, just like all other agencies of the law enforcement system, are faced
    with the crucial task of protecting law and order, and, moreover, they are authorised, by virtue of their position, to make a considerable, significant contribution to Russia’s development as a law-based and community-focused democratic state.

    “During the past year, which was far from simple, you managed to improve a number of vital indicators. For example, prosecutors upheld the social rights of over a million citizens….

    “During the previous board meeting, I instructed you to redouble efforts to protect the most vulnerable groups of the population.
    I am asking you to continue monitoring this priority sphere. I would like to point out that in 2020 there was an increase in the number of violations exposed and, most importantly, remedied concerning the rights of disabled persons and pensioners….

    “Your task is to ensure, together with other government agencies, the unconditional fulfilment of social guarantees, so that our senior citizens and people with disabilities can receive promptly and without any ordeals what is due to them, including social benefits, free medication and access to medical services and convalescent care facilities.

    “And of course, matters such as support for large families, low-income families, orphans and single mothers should remain under
    close review. We must immediately respond to unlawful non-payment of benefits, compensations or other types of material support that people are entitled to.”

    It is impossible to imagine these sentiments being expressed by an Australian politician.

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