federal government treasurer josh frydenberg
Source: Wikimedia Commons
  • Government has proposed a $50 per fortnight increase in the standard maximum rate for JobSeeker Allowance
  • The reforms come with a host of strings attached including "dob-in" hotline
  • Allowance increases ignores fundamental changes to today's cost of living

Changes to our welfare system have been well documented since yesterday.

The toing and froing between the Morrison Government and welfare advocates have been fiery, with every man and his dog deploying political spin machines.

But behind the public fireworks of pity or perdition, what’s really happening to the subjects of debate – the welfare recipients themselves.

The Property Tribune spoke with Professor Paul Henman about the reality of the situation.

The background

Over the past some 20 years, though payments have increased, they were simply in line with inflation.

The first “real” increase means the rise in payments is above inflation.

Currently, the COVID supplement gives people some solace, originally $550 per fortnight at the start of the pandemic in April, down to $250 in late September, now $150 as of January.

When the supplement ceases

After the supplement ceases on 1 April 2021, people who currently receive the full $150 booster will see a net loss of $100 per fortnight.

In short, it’ll be a $100 cut in fortnightly payments for many welfare recipients.

What will happen to recipients?

We are probably sick of hearing the spin about how this raise is “real”, but how in tune with reality is this “real” raise?

Professor Henman said that “When compared to 2020, the overall welfare of unemployed people will considerably reduce with increase in the numbers and depth in poverty. This will have flow on effects to people missing meals, failing to fill prescriptions for medications prescribed by doctors to treat health conditions, associated reductions in health and mental health, increases in housing stress and homelessness, reduced schooling outcomes for children, and increases in requests for emergency relief.”

It is also unlikely there will be much improvement in overall wellbeing, potentially and significantly undermined by factors like housing costs.

The Property Tribune has widely reported on the incredibly tight property markets around Australia, with housing prices experiencing considerable increases across the board.

In a previous interview with Melbourne University, The Property Tribune established it was likely low to middle income brackets will be priced out of owning a property for many years to come, droves of Australians turning into long term renters.

The rental scene is particularly fierce too, with markets across Australia reporting very low vacancy rates, some even dipping below 1%.

Housing pressure has only increased in recent years and months creating dangerous situations like overcrowding, and though you might be able to find cheaper housing on the fringes, its adverse effects are huge:

“… people have been more and more pressed with meeting housing costs, which they manage by increasing sharing with other people, moving home to parents, overcrowding (eg large families located in a small two bedroom dwelling), moving to suburbs and regional areas where rents are cheaper.  This in turn reduces their ability to find work,” said Professor Henman.

The increase in housing pressure is only one substantial problem that will drive issues unaddressed by a simple $50 increase, with more issues to boot.

Professor Henman told The Property Tribune that the fundamental way life is today is so vastly different 20 years ago.

“… in 1994 internet access and smart mobile phones were not available – now they are necessary parts of schooling, banking and even engaging with Centrelink.  Yet the amount unemployed people have received haven’t taken into account these new costs.”

Homelessness and crime

The challenges don’t stop with access to essentials, with homelessness an ever-present issue.

Brought to the fore in Western Australia recently with the tent village in Fremantle, it is difficult to quantify the magnitude of the issue.

Social housing isn’t the panacea we all are hoping for either, waiting lists too often stretching into the years, not weeks.

The Property Tribune asked Bankwest Curtin Economics Centre’s Associate Professor Rebecca Cassells about the welfare changes, and what will happen when the moratorium ends, Associate Professor Cassells said:

“The removal of the JobSeeker supplement combined with lifting the rent moratoriums will be challenging for many households… An additional $3.60 per day is not going to help and we are likely to see an increase in homelessness and people in very insecure housing.”

Associate Professor Cassells also mentioned that “It’s no surprise that crime rates went down when the JobSeeker subsidy was introduced. When people have enough money to live on the likelihood of having to resort other measures to meet their basic needs is reduced significantly.”

The issue is likely to ruffle feathers in the days and weeks to come.

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