30 June 2020
The ACTU is calling for an extension of JobKeeper payments and for the current Coronavirus JobSeeker payments to be made the new base rate post-COVID, arguing the pre-COVID rate of $40 a day keeps people in poverty and actively prevents them from participating in work and society.
The ACTU is encouraging ANMF (SA Branch) members to sign its petition calling for the retention of JobSeeker and extension of JobKeeper
Sign our petition to extend JobKeeper and retain JobSeeker
- There should be an extension of the program to cover a 6-month period.
- JobKeeper, which requires employees be paid at least $1500 per fortnight by their employer, is due to expire on 27 September 2020
- In order to ensure that the program is correctly targeted, it should include a quarterly assessment of the company continuing to meet the revenue loss threshold. This could be done through quarterly GST reporting processes.
- The program should be expanded to achieve universal coverage. This would mean that any employer that met the loss thresholds and then any employee of that employer that could have reasonably been expected to be employed would be eligible. This would allow the inclusion of those workers left out of the program by government, including:
- Short-tenure casual workers
- Foreign visa workers
- Workers with non-traditional employment status (eg. workers who worked ‘gigs’ and their employers no longer formally exist)
- Companies owned by foreign governments (E.g. Dnata)
- Public-sector entities (TAFEs, local governments)
- We need a fast and accessible adjudication mechanism (improving on what is in place at the FWC) to allow workers to appeal the non-provision of benefits.
- There should be a publicly available register of companies which have received JobKeeper support to assist with compliance.
- Why the scheme should be extended - The economy is not back to normal and is showing no signs of being back to normal by September.
- Unemployment continues to rise, reaching 7.1% with nearly 1 million Australians officially unemployed. Unemployment is approaching the highest it has been this millennium.
- But the reality is worse because many people who have lost their jobs are not counted as ‘unemployed’ because they have left the labour market entirely. Since March, 835,100 people have stopped being employed, but the number of unemployed has “only” risen 211,500. The missing 623,600 are no longer in the labour force.
- When we include this group, Australia’s current unemployment rate is more like 11.3% and the rate of unemployment among teenagers is as high as 35.6%.
- AMP Capital estimates that economic activity is down 26% year on year and forecasts an 8% drop in GDP over the June quarter. A drop in economic activity and growth of this extent is not short-term recoverable.
- Lockdowns in some states, including Victoria, are still in effect and are not being relaxed due to fears of secondary outbreaks. Many sectors of the economy are still far from operating in normal conditions. It is unclear if some, entertainment and events for example, will be able return to normalcy without a COVID-19 vaccine.
- Why we don’t support sector by sector or industry by industry approaches to continuing the program
- There has been wide variation within industries in terms of impact – meaning these approaches are not desirable. For example:
- Some manufacturing businesses have experienced very little impact while others have experienced a dramatic drop in revenue.
- Impact on businesses in tourism-reliant locations has been greater than other areas regardless of industry.
- The test for whether support should be ongoing should be the basic test of the impact of COVID on the individual business (whether they meet the loss threshold). This provides the fairest support for workers.
- Why the scheme should be expanded
- The decision to exclude certain workers from JobKeeper has had a devastating effect on those workers. For example:
- International students queueing for hours in the rain for food in Melbourne. 17,000 applications for a food program for visa workers designed for 1,000 recipients.
- Many casual workers who didn’t qualify for JobKeeper were immediately laid off. This had placed many in housing stress and left them unable to afford basic necessities like food and medications.
- Lay-offs and pay reductions being experienced by university staff, local government workers and workers for foreign-government-owned enterprises.
- The Government has been forced to admit that JobKeeper will cost approximately half of its original estimate – this has removed the last excuse not to expand the scheme to all eligible employers and workers.
- JobSeeker absolutely cannot snap back to its previous $40 a day rate. The ACTU has long called for a significant increase to the rate of income support.
- The current Jobseeker rate of $1115.70 a fortnight is due to expire on 27 September 2020. It is made up of:
- $565.70 – the base rate of JobSeeker
- $550 – the Coronavirus supplement.
- On 27 September 2020, the Coronavirus supplement will end and the JobSeeker rate will revert to just the base rate – effectively halving the payment.
- Post-COVID, the current Coronavirus supplement should be made permanent and the current value of JobSeeker made the new base rate.
- This creates some complexity when comparing this new rate of JobSeeker to the rates of other payments in the social support system such as the aged and disability pensions. We should encourage Government undertaking a review of those payments, using the JobSeeker rate that they considered adequate during the COVID crisis as a benchmark.
- The Aged and Disability Support Pensions (single) are currently 860.60 a fortnight, though most people will get supplements to bring it up to $944.30 a fortnight.
- The previous rate of $40 a day has been unacceptably low for too long. This is a rate that keeps people in poverty and which everyone from ACOSS to the BCA agree actively prevents people from participating in work and society.
- The rate has not increased, in real terms, for more than 2 decades.
- The Shelter Rental Affordability index has found repeatedly that Newstart is insufficient for people to afford adequate housing. The 2019 report found that a person receiving Newstart would have to spend 77% of their income to live in any capital city and would be required to spend 135% and 106% of their income to live in Greater Sydney or Greater Melbourne respectively.
- Keeping the current rate
- By raising the rate as a response to COVID-19, the Government has virtually admitted both that the old rate was inadequate and that it needs to be doubled in order to become adequate.
- There is no clear argument for why the new rate should be considered adequate under the current crisis but it would become needlessly generous under normal circumstances. Those that became unemployed during this crisis are no more at fault for their situation and no more deserving than those who were already unemployed prior to the pandemic.
- It is often argued that the new rate cannot be retained because it is too high compared to other payments such as the Disability Support Pension or the Aged Pension. This is an indication that these payments, like JobSeeker, have fallen behind the level of support required and they should be reviewed – not an argument to keep the unemployed in poverty.