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Big hit to SA economy if pandemic payments cut: Labor

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South Australia risks losing $370 million from its economy each fortnight if the Federal Government axes JobKeeper and reduces JobSeeker payments in September, with Labor saying official figures show the state has one job vacancy for every 18 people unemployed.

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Labor said data compiled from the Department of Social Services and Australian Bureau of Statistics showed there were 126,300 unemployed South Australians and 6800 job vacancies in May – equal to one job vacancy for every 18 jobseekers.

Labor said SA was second only to Tasmania, which had one job opening for every 20 unemployed.

The national unemployment average was one job vacancy for every 13 people on the payment.

Labor said figures also showed that in June, 53,219 South Australian businesses were using the Federal Government’s JobKeeper payment to pay staff wages.

Based on data from the ATO, Labor estimated JobKeeper was keeping about 202,232 South Australian employees at work.

Under JobKeeper, eligible businesses received $1500 per fortnight for each employee the business had kept on the books.

The Government also doubled Centrelink’s JobSeeker payment, previously called NewStart, from $560 per fortnight for singles to $1100 as part of its emergency economic stimulus.

SA Labor Senator Marielle Smith said if JobKeeper was axed on September 27 as originally intended, the state economy could take a $303 million per fortnight hit.

However, this amount would only disappear if those receiving the JobKeeper payment were not transitioned onto JobSeeker, which business and welfare groups are lobbying for the Government not to return to it’s pre-pandemic payment of about $40 per day.

SA Treasurer Rob Lucas also backs JobKeeper being extended, telling InDaily in June: “Some version of JobKeeper should continue post-September.”

“We’ve been [pushing] and continue to do so – we think there will be the need for some version of JobKeeper… for the significantly-impacted industries post-September,” he said.

Treasurer Josh Frydenberg is assessing JobKeeper, and the increased JobSeeker, and is due to release a plan on July 23.

But after Melbourne returned to lockdown last week, Frydenberg said: “There is going to be another phase of income support.”

The government is under pressure to continue its emergency stimulus beyond September, with fears of a pandemic second wave’s impact on business and jobs and Melbourne’s lockdown estimated to be costing the national economy $1 billion a week.

Smith said if the JobSeeker payment were to “snap back” to the old payments, the SA economy could be $70 million a fortnight worse off.

She also said that the unemployment to job vacancy figures showed South Australians were not “choosing not to work”, despite Scott Morrison last month claiming some Australians were knocking back work due to the increased JobSeeker payments.

“The Prime Minister made some very insensitive claims that the higher rate of JobSeeker is acting as a deterrent to people taking on work – but their own government data shows that for every job vacancy in South Australia there are 18 JobSeekers,” Smith said.

“So, this idea that people are choosing not to work is just ridiculous. People aren’t working because Covid-19 took their jobs away and those jobs haven’t re-emerged in the market place. So there just aren’t jobs for people to apply for.

“We know that South Australians want to work – but their jobs have disappeared.

“I talk to people every day who have always prided themselves on never having needed government help or assistance now finding themselves on the dole. These are people who want to get back to their jobs. They’re not people enjoying a holiday during Covid-19.”

Last month, there were reports the government was considering a $75 weekly rise in the JobSeeker allowance base rate after the pandemic.

But Social Services Minister Anne Ruston claimed the reports were “factually incorrect” and that the government had given itself six months “with our initial response to ensure we could carefully plan the next step that goes beyond September”.

Smith said with September fast-approaching Labor was calling on the government to: “come up with a plan for both the additional JobSeeker payment and for the future of JobKeeper”.

“Once they release a proposal or a plan, we’ll look at it and work with them to make sure it’s sensible and reasonable,” she said.

“We’ve heard from the government that they’re considering things. We haven’t seen any details on the table and it’s now July.

“September is really the cliff-edge and we know that many businesses and individuals are deeply distressed and concerned about what a potential snapback would mean.”

A Treasury spokesperson told InDaily the government was “considering a review of the JobKeeper program conducted during June 2020 and the outcomes will be incorporated into the July Economic and Fiscal Statement on 23 July 2020”.

Treasury directed our JobSeeker-related questions to the Department of Social Services, which directed them to the office of  Employment Minister Michaelia Cash, which directed them back to Treasury.

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