Australian workers on JobKeeper wage subsidies are having their payments slashed by hundreds of dollars per fortnight.
The $1500 fortnightly payment is being cut to $1200 for full-time workers, and halved to $750 for casual staff working less than 20 hours a week.
The JobSeeker coronavirus supplement was reduced from $550 a fortnight to $250 on Friday, with unemployment benefits for a single person with no dependents now paying an average $58 a day, compared with $40 day before the pandemic.
Deputy Prime Minister Michael McCormack insists it is time to wind down the supports.
“We’ve done everything to make sure we’ve supported the economy, supported workers still being attached to their businesses,” he told the ABC on Monday.
“But it’s time for Australians to get back to work.”
Unemployment figures for August showed Australia’s unemployment rate at 6.8 per cent, down from a 22-year high of 7.5 per cent in July, but still well above the 5.1 per cent rate seen in February when the pandemic first hit.
The government itself says the effective unemployment rate is considerably higher than the official figure, with Treasury estimating cutting JobKeeper and forcing businesses to requalify could force up to 400,000 more people out of work.
Federal Treasurer Josh Frydenberg has promised the government will continue to support Australians through the pandemic, saying his October 6 budget will focus on economic recovery and creating jobs.
Pointing to a new report by Deloitte Access Economics, the treasurer said it makes clear the government “acted fast and well” and that JobKeeper and JobSeeker have been the “standouts” cushioning the economy.
Unions and federal opposition have criticised the Morrison government for cutting JobKeeper when many workers are still relying on it, particularly in Victoria, and with parts of the economy still shut down.
“In the face of unacceptably high unemployment, the Morrison government has today cut vital JobKeeper support for millions of Australians, without any jobs plan to replace it,” Labor’s finance spokeswoman Katy Gallagher told AAP.
Greens Leader and Melbourne MP Adam Bandt said his party will move to stop the cuts in the Senate.
“We are not in a position in Australia at the moment to be pushed off that financial cliff, especially in Melbourne,” Bandt told ABC television’s Insiders program.
“Around the country, 12 people looking for every one job that is available at the moment and the social distancing restrictions are continuing to stay in force and that stops a lot of businesses to get back on their feet.”
ACTU president Michele O’Neil said these cuts will hit the most vulnerable the hardest.
“We also know that these cuts will hurt small business and the economy because it is critical to the recovery from this recession that money is put in the hands of working people to spend,” she said in a statement.
“These cuts come in the lead-up to Christmas at the end of an incredibly hard year and will be a huge blow to millions of families.”
She said the cuts to JobKeeper and JobSeeker should be reversed.
“The program should be expanded to cover casuals, visa workers and industries like arts and higher education which the government arbitrarily excluded,” O’Neil said.
In South Australia, the Opposition claimed that analysis showed cuts to JobKeeper will rip nearly $100 million a fortnight out of the state economy by impacting more than 200,000 workers and over 54,000 businesses.
Labor said the McKell Institute study ahowed the construction and professional services industries would be hit by a $24 million reduction per fortnight, with accommodation and food services forecast to receive $8.5 million a fortnight less.
Labor treasury spokesperson Stephen Mullighan said that the cuts were of concern in a state with the nation’s highest jobless rate and over 170,000 unemployed or underemployed.
“Wages in South Australia have been stabilised by JobKeeper whilst JobSeeker has also stimulated disposable income, there is great concern that businesses and jobs will suffer from people having less money in their pockets to spend,” he said.
State Treasurer Rob Lucas said the Morrison Government’s decision to extend JobKeeper, albeit reduced, beyond its original September cutoff date until March was giving essential support to the economy, along with targeted relief packages for specific industries hardest hit by pandemic restrictions and impending tax cuts designed to stimulate employment.
Lucas said he was “surprised” the Labor figures showed a hit to construction, as housing in particular was going “gangbusters” due to the federal government’s HomeBuilder grants.
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