The analysis from Deloitte Access Economics, and commissioned by the Australian Council of Social Service, found that if the government cuts JobSeeker on 25 September and then fully removes the supplement at the end of December, this would reduce the size of the economy by $31.3 billion and see an average loss of 145,000 full-time equivalent jobs across 2020–21 and 2021–22.
In addition, the report found the cuts would have the worst impact in regional communities.
The federal government is planning to cut JobSeeker on 25 September, reducing incomes of people on JobSeeker by $300 per fortnight, and is expected to be removed entirely at the end of December.
“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,” said Deloitte Access Economics partner Nikki Hutley.
“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.”
Australian Council of Social Service chief executive Dr Cassandra Goldie urged the government to extend the existing JobSeeker arrangements to prevent income cuts in two weeks and move quickly to legislate a permanent rate.
“People and businesses need this certainty in order to be able to rebuild — they need to know that the government has their backs,” Dr Goldie said.
“Not only is this the right thing to do, it’s one of the best things we can do to support jobs now and on the long, hard road to full recovery.”