The Times Australia
Business and Money
The Times Real Estate

.

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

SME Business News

Why is a Commercial Vacuum Cleaner Better?

Maintaining a pristine work area isn't just about aesthetics—it's about fostering an atmosphere of contentment, wellness, and awe-inspiring wholesomeness. Be it an office, a retail outlet, or a...

Why 20% of workers don't feel safe in their workplace

80% OF AUSTRALIAN WORKERS FEEL THEIR COMPANY PRIORITISES HEALTH AND SAFETY IN THE WORKPLACE, BUT WHY NOT 100%? COS shares innovative solutions to keep staff healthy, safe and productive A...

Albanese government looking to acquire Rex Airlines if buyer can’t be found

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airlines, in its latest bid to prop up aviation services to regional and remo...

The Legal Battle Against IP Theft: What Businesses Need to Know

So you've formulated that million-dollar idea and you're ready to take your business to the next level. You were so excited to publicize your supposedly next big thing that you went on TikTok...

The Times Features

Understanding the Dangers of Ignoring a Gas Leak

Gas leaks are silent threats lurking within both homes and workplaces. A gas leak occurs when natural gas or any other gaseous substance escapes from a pipeline or containment. T...

Can You Sell Your House Privately in Queensland? Here’s How

Selling a house privately in Queensland is entirely possible and can be a cost-effective alternative to using a real estate agent. While agents provide valuable expertise, their co...

Itinerary to Maximize Your Two-Week Adventure in Vietnam and Cambodia

Two weeks may not seem like much, but it’s just the right time for travelers to explore the best of Vietnam and Cambodia. From the bustling streets of Hanoi to the magnificent te...

How to Protect Your Garden Trees from Wind Damage in Australia

In Australia's expansive landscape, garden trees hold noteworthy significance. They not only enhance the aesthetic appeal of our homes but also play an integral role in the local...

Brisbane Homeowners Warned: Non-Compliant Flexible Hoses Pose High Flood Risk

As a homeowner in Brisbane, when you think of the potential for flood damage to your home, you probably think of weather events. But you should know that there may be a tickin...

Argan Oil-Infused Moroccanoil Shampoo: Nourish and Revitalize Your Hair

Are you ready to transform your hair from dull and lifeless to vibrant and full of life? Look no further than the luxurious embrace of Argan Oil-Infused Moroccanoil Shampoo! In a...

Business Times

Why is a Commercial Vacuum Cleaner Better?

Maintaining a pristine work area isn't just about aesthetics—it's about fostering an atmosphere of contentment, wellness, a...

Why 20% of workers don't feel safe in their workplace

80% OF AUSTRALIAN WORKERS FEEL THEIR COMPANY PRIORITISES HEALTH AND SAFETY IN THE WORKPLACE, BUT WHY NOT 100%? COS shar...

Albanese government looking to acquire Rex Airlines if buyer can’…

The Albanese government will on Wednesday announce it is willing, as a last resort, to purchase the collapsed Rex Airline...

LayBy Shopping