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Cuts to Centrelink JobSeeker will cost SA $1.6 billion and 13,000 jobs: report

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Planned cuts to JobSeeker and related payments will cost South Australia’s economy $1.6 billion and 13,200 full-time jobs over the next two years, according to a report commissioned by the Australian Council of Social Service.

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The Deloitte Access Economics analysis, released on Tuesday, found if the cuts proceed as scheduled the national economy would lose $31.3 billion and an average of 145,000 full-time jobs.

South Australian Council of Social Service acting CEO Catherine Earl said the social advocacy group was urging the Federal Government to extend the JobSeeker payments beyond September 25.

“The Coronavirus Supplement has been a lifeline for people in South Australia without paid work,” Earl said.

“It has meant that finally they’ve been able to afford the essentials most of us take for granted: things like paying rent and utilities bills, eating healthy food and purchasing necessary medical supplies.

“We call on the Government to act on the Deloitte analysis, to commit to an extension of the existing Coronavirus Supplement, and to follow-up by legislating a permanent, adequate JobSeeker rate to allow people to cover the basics.

“As shown in this report, the COVID-19 pandemic and recession serves to strengthens our case for a permanent higher unemployment benefit”.

The Deloitte Access Economics report was commissioned by the Australian Council of Social Services and examined the economic impacts of lowering the levels of income support across the country.

It comes ahead of the Morrison government’s planned reduction to the coronavirus supplement on September 25, which axes the JobSeeker (previously Newstart) payment by $300 per fortnight.

The supplement will be removed entirely by the end of the year.

Social and business organisations have long advocated to boost the JobSeeker payment rate, which was effectively doubled when the Federal Government introduced the Coronavirus Supplement in March, increasing the rate from $550 a fortnight to $1200 a fortnight for six months.

Deloitte Access Economics Lead Ally Nicki Hutley said continuing with the increased payment would help stimulate the economy in the wake of the recession.

 “Every dollar that the Government invests in JobSeeker is generating a significant economic return, helping to pave the road out of recession. Providing people without paid work with enough to get by is highly effective economic stimulus, as they have little choice but to spend straight away on essentials,” Hutley said.

“People on higher incomes have the option of saving, which many are doing right now given the uncertainty of the pandemic. This is why other measures, such as income tax cuts, would not be as effective in getting us out of this recession. 

“Our analysis clearly shows that the Government’s plans to reduce income support would set back the economy even further. We also know that this would take a serious toll on the wellbeing of millions of people who are without paid work, especially those in regional communities.” 

The report found regional areas would be hardest hit, with 12 people receiving a JobSeeker payment for every job vacancy and an average of 28 people for every vacancy in regional areas.

InDaily contacted Minister for Social Services Anne Ruston for comment.

– with AAP

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