Return to pre-coronavirus JobSeeker rate could cost 145,000 jobs
Economists are warning of a $31.3 billion hit to the economy over two years if the Jobseeker welfare payment reverts to pre-pandemic levels.
A Deloitte Access Economics analysis commissioned by the Australian Council of Social Services (ACOSS) found winding back the supplement this month, and then removing it entirely in December, would reduce the size of the economy by $31.3 billion over two years — equivalent to almost 1 per cent of GDP.
The analysis also predicted a return of the JobSeeker payment to pre-pandemic levels of $40 a day would lead to about 145,000 job losses.
Economist at Deloitte Nicki Hutley said financial support for unemployed Australians and low-income earners would be critical to the nation’s economic recovery.
“If we take it away too soon and too harshly, we will end up adding to the unemployment queue,” Ms Hutley said.
“We will remove growth from the economy. That means we will get less revenue for the Government, so you’re actually giving yourself a bit of a slap in the face if you take it away.”
Ms Hutley said every dollar invested in JobSeeker was generating significant economic return.
“If people don’t have the supplement, they can’t consume as much,” she said.
“That affects demand for all sorts products right across the Australian economy but particularly the services sector and that’s where we will see the biggest job losses.”
The Federal Government effectively doubled the JobSeeker payment – formerly known as Newstart — by introducing a $550 “coronavirus supplement” when the pandemic first took hold and forced the mass shutdown of businesses.
The temporary supplement will be cut by $300 a fortnight on September 25. The Government is yet to reveal what the future of the payment will be beyond the end of December.