PASSWORD RESET

Magazine of Socialist Action in Australia

Jobseeker Cuts Leave Millions in Poverty

By Ben McIntyre
Reading Time: 4 minutes

Fearing the economic and political repercussions of an unemployment spike, the Morrison government was forced to increase the Newstart unemployment allowance by $550 per fortnight earlier this year. But despite widespread economic devastation Morrison’s government plans to reverse the increase and plunge hundreds of thousands into poverty.

Newly renamed ‘Jobseeker’, the payment represented the first real increase in unemployment welfare in 27 years. The increase broke the illusion maintained by capitalist politicians that there was simply no money to support unemployed and struggling Australian workers.

Prior to the April 27 increase unemployed workers received $565 dollars per fortnight, a wholly insubstantial amount meant to shame and discomfort unemployed Australians. It left around 3 million people living in poverty.

With the Jobseeker increase nearly doubling, the number of those living in poverty decreased to around 2.6 million, in spite of the recession.

This increase in the wake of the pandemic is a critical practical acknowledgement by capitalist politicians of how inadequate the base unemployment welfare was prior to Jobseeker, and still remains.

People who had not used the welfare system before were shocked at how poor the service was and how low the payments were. The government normally demonises welfare recipients, but with the pandemic it faced a situation where many more people were given a taste of how welfare recipients were treated.

In spite of this the Morrison government is eager to maintain the false image that a liveable unemployment welfare is unaffordable and workers are to blame for not having a job. Morrison has repeatedly said that the increase to Jobseeker will be revoked.

As if the thought of 2.6 million people unnecessarily living in poverty was not abhorrent enough, Scott Morrison and his government have followed through with their promise to cut Jobseeker payments by $300 per fortnight.

It is estimated that this decision will push around 700,000 Australians back into poverty by the year’s end. Many struggling Australians will return to skipping meals and rationing medicine in order to pay rent and bills. Replacing worn out clothes and shoes will become impossible again.

Scott Morrison offered only glib sentimentality to Australians struggling to find and keep work earlier this year, telling them to “look forward, not back” as we “come out of the crisis and work through the COVID-19 recession”.

Scott Morrison is talking as if the coronavirus and economic downturn are all behind us, however the full extent of the coronavirus pandemic and ensuing recession are yet to hit working Australians.

Most of the country still remains under various restrictions and the shrinking national economy is not expected to make back losses until December 2022, with a full recovery not expected until 2027 even assuming constant economic growth.

Years before the best case scenario for economic recovery under capitalism, critical, though still insufficient, support for jobless people is being gutted.

The system is incapable of providing enough jobs to go around, and those it does provide are often insecure. Welfare is an important worker’s right – it is insurance against capitalism’s inability to provide enough jobs. It was won in the past through struggle. But politicians seek to paint it as a ‘handout’, and they demonise welfare recipients as being lazy.

These claims are used by politicians and capitalist media to misdirect criticism of capitalist economics onto individual working class people. Capitalism is fundamentally unable to provide jobs to all of the working class and uses the desperation caused as a threat against those workers fighting for better pay and conditions. Unemployment and low welfare payments push wages downward.

Even prior to the pandemic there were over 700,000 unemployed Australians competing for fewer than 250,000 job vacancies at any one time. This problem has only intensified, newly unemployed “overqualified” workers are forced to compete for entry level positions sometimes attracting hundreds of applicants for a handful jobs.

On average across the country, there are 106 applications for each entry level position, only 8 of which are appropriately qualified for an entry position. This is an incredibly hostile job market, particularly for young and long term unemployed Australians. This situation is only set to worsen with the Federal Government vowing to further cut Jobkeeper and narrow its scope.

Capitalism’s failures are chronic and neither Labor nor the Greens are presenting any real solutions either. Labor opposed the $300 cut to Jobseeker and the Green’s are calling for the $550 to be made permanent. But as we have seen, that means at best these two parties would still leave 2.6 million working class Australians living in poverty.

Real change that can lift millions of people out of poverty is only achievable if we go beyond what can be offered by big business and their political representatives. Welfare payments must be increased to a liveable standard of at least $1000 per week for those unable to work, and be increased yearly in step with minimum wage increases.

Wealth is created solely by the working class and should be used first and foremost to defend the working class from poverty and humiliation, not to line the pockets of the super rich and their corrupt politicians. Through collective action we can fight for a better, socialist, system that puts people before profit.

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