by Mark Ouliaris (Blueprint Institute Senior Researcher)
The recent federal budget got it all backward with the changes to JobSeeker. Yes, on productivity grounds Blueprint advocated for an increase from the current payment of $693.10 a fortnight for a single adult. But $40 a fortnight? That barely moves the needle.
Just for context, the government’s own hand-picked Economic Inclusion Advisory Committee made 37 comprehensive recommendations to remove barriers to economic participation amongst the most disadvantaged in our community. But of the 37 recommendations, one took top priority: raising JobSeeker to 90% of the Age Pension—that equates to $874.35 a fortnight, a far cry from $733 a fortnight.
A cynical analysis might conclude that the government is allocating just enough to placate the coalition of social service advocacy groups, the business community, and economists whom all agree on a much more significant raise in JobSeeker, in the hopes that the political pressure to raise the rate will dissipate before the next budget cycle.
We would very much advocate for a uniform raise of JobSeeker to 90% of the Age Pension, regardless of age. Nevertheless, if the government is wedded to some form of age discrimination when it comes to income support payments, it makes much more sense to allocate increased payments to the young instead of those aged 55+, as Labor’s budget intends.
The plain fact is that younger JobSeeker recipients are “2.5 times more likely to report being financially stressed” than older recipients. One cannot possibly expect a miserly $40 per fortnight increase in JobSeeker and its related payments like Austudy and Youth Allowance to go a long way toward reducing the long lines for food assistance at our Universities, nor reduce the phenomenon of students pitching tents to further share space in already cramped shared apartments.
In addition to moral concerns, these meagre living conditions have real long-term economic effects. In the midst of a long-term productivity crisis, taxpayer dollars should be prioritising alleviating the financial stress faced by students and young people, so they can fully focus on bettering themselves at a unique point in their lives when path dependency has not yet set in. A paltry $40 per fortnight increase in JobSeeker and its related payments like Austudy and Youth Allowance equates to underinvesting in the young, one of the most counterproductive things a government can do.
So by all means, let’s pop the champagne bottles for an unexpected government surplus. But, perhaps spare a thought for young people attempting to escape poverty while under constant financial stress and competition against their more fortunate classmates. Spare a thought for their prospects of attaining their full earning potential and maximising their contributions to society as citizens, workers, and yes, future taxpayers.
And before the budget hawks start crowing, please bear in mind that raising JobSeeker and its associated working age payments to 90% of the Age Pension would cost less than one percent of the total federal budget.
This is an investment we cannot afford not to make.
Mark Ouliaris is a senior researcher at Blueprint Institute—an independent public policy research institute. Email Mark at [email protected]
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