The Albanese government will not substantially lift jobseeker payments despite its own poverty experts calling for an increase to the “seriously inadequate” unemployment support.
On Tuesday the treasurer, Jim Chalmers, and social services minister, Amanda Rishworth, released the report of the interim economic inclusion committee, which found that the dire level of jobseeker is acting as a barrier to entering the workforce as jobseekers don’t have enough to meet the “essentials of life”.
The pair promised some measures to address disadvantage in the May budget, including energy rebates, but Guardian Australia understands the government will not implement the central recommendation to substantially increase jobseeker.
The committee proposed lifting jobseeker to 90% of the value of the aged pension, which would cost $24bn over four years. However, it is unclear whether the government could yet back a less substantial increase.
Senator David Pocock, who pushed for the creation of the committee, urged the government to “think again and prioritise those in our communities in most need of support”.
“It appears that this Labor government can find extra money for just about anything – from inland rail cost blowouts to submarines – but it won’t do more to protect the most vulnerable,” he said.
The base rate of jobseeker is $693.10 a fortnight for a single person with no children, or $49.50 a day; compared with the pension, which is worth $971.50 a fortnight or $69.40 a day.
The committee, chaired by former families minister Jenny Macklin, concluded that on “all indicators” jobseeker and youth allowance are “seriously inadequate, whether measured relative to the national minimum wage, in comparison with pensions, or against a range of income poverty measures”.
“People on these payments face the highest levels of financial stress in Australia,” the report said.
“Committee members heard from people who live on income support having to choose between paying for their medicine or electricity bills.”
The committee report quoted submissions from jobseeker recipients, including one who reporting feeling “suicidal”. “A couple of times I’ve felt suicidal, because I think there is no way out,” the submission said.
The committee concluded that “unemployment payments have fallen to such an inadequate level that they create a barrier to paid work”.
“It is also our view that our income support system should prevent poverty and financial distress to ensure people looking for paid work are not placed at a greater disadvantage by virtue of not having enough money to meet the essentials of life.”
In February 2021 the Morrison government increased the base rate of jobseeker by $50 a fortnight after the expiry of the coronavirus supplement.
The increase resulted in Labor backing off an earlier commitment to review the rate of jobseeker. But in November, the Albanese government promised Senator David Pocock that it would establish a committee to review the adequacy of payments before every budget.
The committee also found that commonwealth rent assistance is “inadequate”.
“At a time of rapidly rising rents, the 1.3m Australian households receiving [rent assistance] are at greater risk of financial stress and poverty,” it said.
But the committee said given fewer than 40% of people on jobseeker receive rent assistance, lifting the base rate of the payment must be the priority, otherwise people on jobseeker in private rentals will “remain in housing stress”.
“In other words, lifting [rent assistance] on its own would not deal with the core inadequacy problems in our income support system.”
The government estimates the total cost of implementing the recommendations in full would be $34bn.
Chalmers and Rishworth said in a statement: “The Albanese government will always look to provide support where we can to those most in need, where it is responsible and affordable to do so, and weighed up against other priorities and fiscal challenges.
“While we can’t fund every good idea, there will be measures in the May budget to address disadvantage. This will include energy bill price relief that prioritises those on payments and pensions.”
On Monday, Chalmers told reporters in Canberra: “I think that people understand that we can’t do everything at once … We can’t do everything that we would like to do.”
The committee also called for the government to adopt a full employment objective as a critical means of maximising economic inclusion.
It also wants a “major reform of employment services”, including investment in programs to reduce long-term unemployment.
The committee called for the ParentsNext program and the activity test for childcare subsidies to be abolished, two recommendations that have been echoed by the women’s economic equality taskforce.
