Google AI
The Times Australia

Times Media

What happens when you free unemployed Australians from 'mutual obligations' and boost their benefits? We just found out

  • Written by: Elise Klein, Senior Lecturer, Australian National University

During COVID-19 the government ran what turned out to be a giant real-world experiment into what happens when you boost someone’s unemployment benefits and free them of the “mutual obligation” to apply for jobs.

On April 27 2020 the government as good as doubled the $565.70 per fortnight JobSeeker payment, lifting it by $550[1] per fortnight for what turned out to be six months. In September the boost dropped to $250[2] per fortnight, and in December to $150[3] per fortnight.

Next Thursday the boost vanishes, although the base rate of JobSeeker will climb by a less-than substantial $50[4] a fortnight, leaving recipients $100 a fortnight worse off than they have been, $500 per fortnight worse off than back when JobSeeker doubled and back well below the poverty line[5].

From Thursday April 1 they will also be subject to much more demanding work tests, having to show they have applied for a minimum of 15 jobs a month[6], climbing to 20 jobs a month from July 1.

On top of that[7] the government has announced

  • a return to compulsory face-to-face meetings with Jobactive providers

  • work-for-the-dole after six months of unemployment

  • a dob-in line for employers to report jobseekers who seem not to be genuine

  • increased auditing of job applications to ensure they are legitimate

They are the sort of “mutual obligations” that were scrapped while JobSeeker was doubled.

Read more: Australia has a long history of coercing people into work. There are better options than 'dobbing in'[8]

Yet the government’s natural experiment where they doubled benefits and freed recipients of “mutual obligations” provides us with an opportunity to examine how a more generous approach affected recipients and whether, as the government says, a tougher approach is needed in order to compel people to work[9].

During last year’s more generous approach, we conducted an online survey[10] of JobSeeker recipients and found that (contrary to what appears to be the government’s expectation), it was helping get people into work.

Freed of “mutual obligations”, many were able to devote time to reengaging with the workforce.

As one respondent said,

I was able to focus on getting myself back into the workforce. Yes, mutual obligation activities PREVENT people from being able to start a new business or re-enter the workforce as an employee

And the extra income freed recipients to do things that would advance their employment prospects; either through study, through properly looking for work, or buying the tools needed to get work.

One said

I could buy things that helped me with employment — equipment for online work, a bicycle for travel, a proper phone"

An Australia Institute review[11] of unemployment payments and work incentives in 33 OECD countries found something similar — that higher payments correlate to lower unemployment.

Another respondent said the suspended mutual obligation requirements made it easier to care for an elderly parent during pandemic and their recovery from major surgery.

Read more: At least 2.6 million people face poverty when COVID payments end and rental stress soars[12]

Another said she had been able to focus on her health needs and her children.

People on social security are often accused of being dependent on welfare, but it’s often the economy and society that are dependent on their unpaid labour.

Yet (except for during the worst of the pandemic) these people have been denied a safety net that ensures their survival.

What happens when you free unemployed Australians from 'mutual obligations' and boost their benefits? We just found out Fewer obligations meant parents were better able to care for children. Shutterstock

The inadequacy of payments goes to a major and enduring flaw in the Australian social security system — its inability to recognise all of the productive activities people undertake, including unpaid care [13] largely undertaken by women.

The decisions the government took during 2020 made a major difference to the lives of people outside the formal workforce.

They enabled them to turn their attention away from day-to-day survival towards envisioning and realising a more financially and emotionally sustainable future for themselves and their dependants.

The flow-on benefits, to all of us, ought to be substantial.

The government ought to be very interested.

If it was, it would examine the findings further, but they don’t seem to be on its radar.

References

  1. ^ $550 (theconversation.com)
  2. ^ $250 (theconversation.com)
  3. ^ $150 (www.servicesaustralia.gov.au)
  4. ^ $50 (theconversation.com)
  5. ^ poverty line (theconversation.com)
  6. ^ 15 jobs a month (www.servicesaustralia.gov.au)
  7. ^ top of that (www.pm.gov.au)
  8. ^ Australia has a long history of coercing people into work. There are better options than 'dobbing in' (theconversation.com)
  9. ^ compel people to work (www.news.com.au)
  10. ^ online survey (www.cfecfw.asn.au)
  11. ^ review (australiainstitute.org.au)
  12. ^ At least 2.6 million people face poverty when COVID payments end and rental stress soars (theconversation.com)
  13. ^ unpaid care (www.canberratimes.com.au)

Authors: Elise Klein, Senior Lecturer, Australian National University

Read more https://theconversation.com/what-happens-when-you-free-unemployed-australians-from-mutual-obligations-and-boost-their-benefits-we-just-found-out-157506

Business Times

Eat.com.au is for sale: The domain name is already the brand

An Australian food business could begin with this domain name, one that needs little explanation. The potential is right th...

Top doctors tip in another $3.5M into AI medtech capital raise

Medow Health AI ip in another $3.5M into AI medtech capital raise Medow Health AI, the Australian health-tech company buildin...

Australians are still spending — so why are shops closing?

Walk through many Australian shopping strips and there is a contradiction in plain sight. Australians are spending more mo...

Technology

MISSION 1, MISSION 1 PRO and MISSIO…

Today, GoPro, Inc. (NASDAQ: GPRO) announced that its MISSION 1 Series of compact cinema cameras ha...

Local News

Fitstop Global Games to Bring 1,000…

The Australian-born fitness brand is bringing its global competition home, with athletes from across...

Culture

Kenwood My Pizzeria Pizza Oven – The easy-to-…

Pizza at home can be tricky. For years I settled on ‘cook from frozen’ mass produced ones that could...

Travel

School holiday pricing: fair market economics…

Every Australian family with school-aged children knows the pattern. Look at an airfare, hotel ro...

The Times Features

Kenwood My Pizzeria Pizza Oven – The easy-to-use workto…

Pizza at home can be tricky. For years I settled on ‘cook from frozen’ mass produced ones that could...

Melbourne Local Steps Outside Her Comfort Zone to Compe…

From working in Melbourne real estate, building a career and now stepping into the Miss World Prel...

Award-Winning Author Cara Barilla Writes I Pray for My …

Following her recognition as the winner of the 2024 Christian Literature Book Awards, Australian aut...