Lifeline for hundreds of thousands on JobSeeker: The huge changes coming to welfare payments - and unemployed Australians could end up getting MORE cash than they would usually
- Out-of-work Australians could see their dole payments permanently increased
- During coronavirus crisis, JobSeeker payments temporarily doubled to $1,100
- JobKeeper wage subsidies of $1,500 a fortnight are ending in late September
- Australia's unemployment rate surged to 19-year high of 7.1 per cent in May
- The number officially jobless stood at 927,600 last month - highest since 1993
- Here’s how to help people impacted by Covid-19
Australians without work could be given bigger welfare payments when the temporary six-month JobSeeker boost ends - with unemployment now at a two-decade high.
The unemployed have been receiving $1,115 a fortnight since April 27, including a $550 coronavirus supplement which effectively doubled the usual $565.70 JobSeeker rate.
The government is now considering a permanent increase to JobSeeker, beyond the old Newstart rate, when the temporary boost ends in September.
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People line up outside of a Centrelink office in Melbourne on April 20, after the coronavirus pandemic left thousands out of work
While it will be higher than the $565.70 payment, Daily Mail Australia understands it will be considerably less than the $1,115 they are receiving now.
Australia's unemployment rate surged to 7.1 per cent in May, the highest since October 2001 as 227,700 people last month either lost their job or gave up looking for one following the COVID-19 shutdowns.
The official jobless ranks now stand at 927,600 - the highest since December 1993.
Following the grim economic news, Prime Minister Scott declared: 'This is the biggest economic challenge this country has ever faced.'
He said the figures were 'heartbreaking,' adding: 'The sad truth is these numbers are not surprising in these circumstances.'
Treasurer Josh Frydenberg said he believed everyone who lost a job would be able to get back into work.
The JobSeeker change is expected to be included in a July 23 economic statement, with Mr Frydenberg repeatedly stressing the doubling of JobSeeker was temporary.
More than 1.64million Australians are now receiving JobSeeker, which covers sickness and bereavement recipients as well as the unemployed.
That number is expected to soar when the temporary JobKeeper program - which pays $1,500 a fortnight to those left temporarily unemployed by forced business closures during the coronavirus lockdown - ends in September.
The official number unemployed, where recipients are either receiving the dole or looking for work, rose in May by 85,700 to 927,600 - a 30.9 per cent increase compared with a year earlier.
The ranks of the unemployed is now at the highest level since December 1993, during an era when the jobless rate stayed in double-digit figures for almost three years after the last recession.
The Prime Minister and Mr Frydenberg, his Liberal Party deputy, have reportedly met with backbenchers to discuss the possible changes.
The Australian Council of Social Service has been calling for the payment to increase, claiming it was 'senseless cruelty' to keep it that low.
Hospitality workers were among the thousands of workers left without a job during the two-month shutdown (Pictured: A bartender pouring a pint)
'It's clear we need a permanent fix to our social safety net. Our income support system was cruel before this crisis began,' chief executive Cassandra Goldie said.
'We can never go back to the brutality of trying to survive on $40 a day. We need a secure safety net that protects us all from poverty.'
Ms Goldie warned that reducing the rate after the pandemic would stall economic recovery.
'We need a decent social security safety net in place that works at all times,' she said.
The coronavirus shutdowns have seen close to one million jobs disappear in just two months with new figures adding to fears Australia's unemployment will hit ten per cent for the first time since 1994.
Both the Reserve Bank of Australia and Treasury are expecting the official unemployment rate to hit double digits this month as the health pandemic caused an even faster downturn than the 1930s Great Depression.
This would see Australian sink into recession in the June quarter of 2020 for the first time in 29 years.
New official payroll figures show 980,000 jobs were lost between mid-March, before the coronavirus shutdowns, and the end of May.
The six-month boost to JobSeeker payments came into effect in April, alongside the $70billion JobKeeper package.
With businesses shut down during the pandemic, the usual JobSeeker rules on needing to apply for a minimum number of jobs have been temporarily suspended until July.
People are seen queuing outside a Centrelink office in Adelaide on April 16, with many more workers needing helping during the coronavirus crisis
From September, workers on JobKeeper wage subsidies are likely to be forced to look for work, to qualify for JobSeeker, should their employers decline to keep them on the payroll.
Inner-city Sydney and Melbourne have been the worst-hit by COVID-19, with new Australian Bureau of Statistics maps showing one in ten or 10.6 per cent of jobs in these areas were lost in just 11 weeks.
On the Gold Coast, 8.8 per cent of jobs were lost between March 14, before the border closure and coronavirus shutdowns, and May 30, the ABS payrolls data showed.
Tasmania's south east lost 10.5 per cent of jobs as Hobart and Launceston both saw a 9.3 per cent employment plunge.
Melbourne's north west and Victoria's south west, taking in Warrnambool on the Great Ocean Road, both suffered a 9.4 per cent decline while inner-city Perth suffered an 8.5 per cent drop during that period.
Job losses in these areas were well above the national average of 7.5 per cent.
While the cost of JobKeeper is far less than the $130billion price tag announced in March, Australian National University economist Professor Bruce Chapman said taxpayers shouldn't be expected to keep propping up struggling employers.
'It just costs a lot of money - it's not a good way to spend scarce, taxpayer resources,' he told Daily Mail Australia.
Inner-city Sydney and Melbourne have been the worst-hit by COVID-19 , with new Australian Bureau of Statistics maps showing one in ten or 10.6 per cent of jobs in these areas were lost in just 11 weeks
Melbourne's north west and Victoria's south west, taking in Warrnambool on the Great Ocean Road, both suffered a 9.4 per cent decline while inner-city Perth suffered an 8.5 per cent drop during that period
'The government will either stop it or they'll make it very selective.'
Professor Chapman is proposing a system whereby employers receiving JobKeeper after the September end date repay a government loan.
The idea is modelled on the old Higher Education Contribution Scheme, a student loan scheme he designed three decades ago for Bob Hawke's Labor government.
Under his 'revenue-contingent loan' plan, employers receiving JobKeeper during the final three months of 2020 would have to repay $1,000 of the $1,500 wage subsidy, provided they earned a certain level of income.
A shut down café for sale in Mollymook on the NSW south coast (pictured on April 7). The accommodation and food services industries have been hardest hit by strict social distancing
Professor Chapman said making business repay a JobKeeper loan would prevent taxpayers propping up insolvent companies.
'It's a very special loan: it's paid depending on their future revenue, it's not a bank loan,' he said. 'That protects them from default.'
National Australia Bank chief economist Alan Oster said the government would need to maintain JobKeeper for struggling sectors, like international tourism, universities and commercial property.
'You can't just turn it off,' he told Daily Mail Australia.
'There are large chunks that will basically still be almost dead by the time you get to the end of September.'
Deloitte Access Economics is predicting a $143billion budget deficit for 2019-20, that would comprise 7.3 per cent of gross domestic product - the largest since World War II.
It forecast a $133billion deficit for 2020-21 which would make up 7.2 per cent of GDP.
The Parliamentary Budget Office is forecasting a $191billion revenue collapse in the 2020-21 financial year, as royalties from mineral exports dried up.
The PBO also forecast debt at the end of this decade would be $620billion higher than the government's earlier forecasts, pushing outstanding public debt towards $1trillion.
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2020-06-18 04:40:30Z
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