Social Services Legislation Amendment (Strengthening Income Support) Bill 2021
In the past 12 months, many Australians have experienced for the first time what it’s like to be out of work.
For several years, the number of Australians receiving the JobSeeker payment was bouncing around about 700,000.
But in March of last year, when the pandemic hit, that number jumped to 1.2 million people, an increase of 54 per cent in a single month. Our country has never seen anything like it.
At the same time, the government did something extraordinary and temporarily doubled the rate of the JobSeeker payment to around $1100 a fortnight. They also introduced JobKeeper to support the business community.
These were two of the best decisions this government has made. And they did it because they recognised several things. They recognised that the hundreds of thousands of Australians who found themselves out of work, were suddenly unemployed through no fault of their own and that it would be good for small business to put more money in the pockets of people who will spend it locally.
Since that time, the government has slowly cut the rate of JobSeeker back close to its original rate.
This is despite the fact that from January, there were still 1.2 million JobSeekers in Australia – the number having barely budged since the pandemic hit. And the Bill before us will permanently enshrine yet another cut in the rate.
If this Bill passes, then on the first day of April, two things will happen. First, the permanent rate of JobSeeker, and several other social security payments, will rise by $50 a fortnight. Second, at the same time as the permanent rate is increasing, the coronavirus supplement, of $150 a fortnight, is ending.
This means that the actual rate of JobSeeker that people are receiving is being cut by around $100 a fortnight.
Right now, a single person with no kids who is receiving JobSeeker will be getting around $50 a day. In two weeks’ time, that same person will get just $44 a day.
I will support this Bill because, if it does not pass, the JobSeeker rate will simply go back to its old level of $40 a day. But I believe that this cut is overly punitive and counterproductive for our small businesses looking for employees. And I’d like to use this opportunity in Parliament to outline my reasons why.
I believe that the goal of our social security system should be to support people who can work to do so, and to support people who are unable to work to live decent lives.
Both of these things are important.
And I fear that this Bill, by cutting JobSeeker to such a low level, achieves neither goal.
It neither gives those people unable to work a decent life, nor does it encourage people who are able to work to do so. On the new JobSeeker rate, a person will receive just $44 a day. I don’t believe that there is any way to really survive on an income this low.
Before coming to this chamber, I checked on realestate.com to see what it costs to rent a place in some of the towns in my electorate. The cost of an average rental in Wodonga right now, is around $40 a day. In Bright, where there is basically nothing on the market, it’s $56 a day.
When I met with the Minister for Social Services a few weeks ago to be briefed on this Bill, she insisted that because the Government has other supplements available, that people really are given enough to live on.
And to an extent, it is true that the base rate of JobSeeker is not the only thing that determines the total amount of social security that an individual receives.
But even once you include these supplements, I simply do not see how we can plunge 1.2 million Australians into living like this.
Let’s take an example. With the new fortnightly JobSeeker rate, a single person with no children, who is renting a property, will receive $620 in basic JobSeeker, $9 in the energy supplement and $141 in rent assistance. That’s a total of around $770 a fortnight or $55 a day.
If you live in Wodonga, and you’re spending on average $40 a day on rent, you’re living on just $15 a day. But in some of the smaller towns, the lack of affordable housing is even worse.
The cheapest rental there is right now in Mansfield, not the average, but the cheapest, costs $740 a fortnight or $53 a day.
If you’re on JobSeeker in Mansfield, even with all the extra supplements that the government talks about, you’re looking at spending 96pc of your income in rent. After paying rent, there’s just $30 left a fortnight.
How is a person supposed to survive on JobSeeker if they live in a town like Mansfield where there simply are not the properties available to live in?
Now, the Minister also insisted to me that healthcare is, quote “free” in Australia, so people receiving social security are able to access healthcare at no cost. But this is simply incorrect. Particularly in regional Australia, people are not always able to access healthcare for free.
Fifty three per cent of patients in regional Australia face out-of-pocket costs to access Medicare, paying around $142 per person a year. I constantly hear from constituents who tell me that they cannot access mental healthcare in places like Wangaratta and Benalla because the only providers charge significant gap fees.
If you live in Benalla and you have a medical emergency, there is no Emergency Department to go to. Instead, you can only go to an Urgent Care Centre, which charges fee for service. As a result, some people in Benalla will drive half an hour up the road to Wangaratta, just to see a doctor in the emergency department.
These issues are not isolated to Indi. They happen right across regional Australia. The idea that we can afford to have such a low rate of social security because healthcare is free is not only incorrect, it is dangerous.
We have to be honest – putting the rate so low means that some people are unable to access the essentials of life, like a place to live and basic healthcare.
Cutting JobSeeker does not help people back into jobs
But I said at the beginning of this speech that giving people dignity in unemployment should not be the only goal of the social security system – that it should also encourage people who can work to do so.
And we have to be honest – if the rate of JobSeeker is too high, for some it is a disincentive to work.
But I believe that simply cutting JobSeeker is a crude way to try and get people into jobs. I don’t believe it does much to address the structural barriers that stop people from being able to work.
A few weeks ago, the Mansfield Courier ran a story reporting, accurately, that I was calling on the government to rethink its cuts to the JobSeeker rate.
And when I was in Mansfield last week, I was approached by a constituent named Dean Bell. Dean owns the popular Delatite Hotel and Mansfield produce Store. He is well-known in the Mansfield community and I hold him, like the Mansfield community, in the highest regard.
He told me that some of the small business owners in the Mansfield Main Street were concerned about what I’d said about the rate of JobSeeker because they are struggling to find enough people to work in their businesses.
He told me that he too, was struggling to find enough people willing to work in his pub and café. As a result, he and other business owners, had missed out on thousands of dollars in lost trade.
But Dean’s comments, while alarming, did not surprise me because, to be truthful, I hear this from many people.
In the last few weeks, I have heard this same message from small businesses in Tallangatta, Corryong, Bright and yes, in Mansfield.
One pub owner told me that he had to shut on the Sunday of the Labour Day long weekend because he was so understaffed that the few staff he did have were completely worn out by the huge crowds on Friday and Saturday.
I know Dean Bell. He is a model employer. So, too, is the IGA in Mansfield, and many other great local employers that can’t find people to work. There are businesses offering traineeships, they can’t find people to work. And many businesses tell me that one of the reasons they struggle to find workers is that it is easier to be on JobSeeker than it is to work.
The brutal truth is that in some cases, they are right.
There are some people sitting on JobSeeker turning down work when hard-working businesses are unable to fill their available spots – and that is deeply unacceptable.
But my view is that while there are a portion of people on JobSeeker who choose not to work, there is a slew of other reasons that prevent JobSeekers from being able to take up jobs. It is not a zero-sum game.
I hear from so many constituents about other structural barriers that stop them taking up jobs – barriers like housing, and that cutting the rate of JobSeeker actually addresses any of these key structural barriers – things like housing and transport.
Structural barriers to employment
There is an acute lack of affordable housing in many regional towns, making it essentially impossible for people to move there to take on jobs.
I said before that the cheapest property in Mansfield on realestate.com is $740 a fortnight. Just imagine you are living in Melbourne and unemployed, and there is a job going in Mansfield but the only place to live will cost you $740 a fortnight.
Not only is quite impossible for you to pay a security deposit out a of JobSeeker income, but if you are coming up for work as a casual waiter or a part-time job in a ski shop, you’re very unlikely to be able to afford that rent.
Lack of skills is another huge barrier.
Many small businesses need people with experience and training, skills which may not be available locally. Take Bright for example. The Bright-Mount Beauty area has seen the number of people of JobSeeker go up 96pc since March (last year), the highest increase of any place in Indi.
This is unsurprising – this is an area heavily-reliant tourism which was completely decimated by the pandemic. Many of the people who lost their jobs have now left the area.
But, now that tourism is coming back, many small businesses in Bright tell me that the jobs they are trying to hire for are roles for chefs, bar staff, and experienced waiters.
But the problem for these businesses is not the availability of people needing jobs, but the mismatch between the skills they need and the skills local people have.
Another barrier is childcare. In regional towns, we have extremely limited childcare options, especially flexible childcare for shift workers. If you are a single mother on JobSeeker, and there is a local pub offering you a shift on the bar at night, if you can’t find childcare, you simply can’t take the job. On top of that, even if you can find childcare, it might be so expensive that it’s not even worth it for you.
Fourth, transport. If you need a car to get to a job and you don’t have one, it’s essentially impossible to take on a job in a regional area with very limited public transport options. If you live in Eurobin and there’s a job in Porepunkah, and you don’t have a car, it’s pretty simple, you can’t take that job.
So housing, skills, childcare, transport. These are four structural barriers to employment that I hear from my constituents. But simply cutting the rate of JobSeeker doesn’t do anything to solve these four problems.
I am acutely conscious that these barriers don’t tell the full story.
We have to be honest – some people would prefer to receive money for nothing. I recently met with Uniting Care Wodonga Social Services, and they told me precisely this. But they also told me that these people are very much in the minority. Most people want to work.
Addressing these issues in a holistic way, I believe, would do far more to create jobs in the regions than simply cutting JobSeeker.
The government must be able to design public policy that allows our small businesses to thrive, but which does not condemn our fellow Australians to the indignity of poverty. The debate around what the rate of JobSeeker should be is a difficult one, mired in complexity and politics. But simply railing against JobSeekers, as some in the government do, is unhelpful.
I’ll support this Bill because I think we are a society that lends a hand to people down on their luck.
But I call on the government to offer a comprehensive regional investment agenda, one that is matched by the services that enable people to live, work, study and thrive in the regions.
It’s high time they did.