The Australian Council of Social Service (ACOSS) has released two studies highlighting the impacts the Government’s planned cuts to COVID-19 income support payments would have on the Australian economy and on the people without paid work during this recession.

The Federal Government is planning to cut the Coronavirus Supplement on September 25, reducing incomes of people on JobSeeker, Youth Allowance and Parenting Payment by $300 per fortnight. The Government has said it may then fully remove the Supplement at Christmas time, taking people without paid work back to just $40 a day – the old Newstart rate. These cuts are expected to affect 2.2 million people receiving the Coronavirus Supplement, including 1.6 million on JobSeeker and over 1 million children.

Deloitte analysis: 145,000 jobs could be lost

The first study is a Deloitte Access Economics analysis commissioned by ACOSS. The analysis finds that if the Government cuts the Coronavirus Supplement on September 25 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.
  • Have the worst impact in regional communities.

Download the Deloitte Access Economics Report

Survey: eight in ten have to skip meals

In the second study, ACOSS surveyed 634people receiving JobSeeker or related income support payments to shed light on how the higher rates of payment helped people cover living costs. The survey also sought people’s views on the planned reduction and removal of this payment in coming months.

The survey finds that if the Government goes ahead with the $300 per fortnight cut on September 25:

  • 8 in 10 people said they will definitely have to skip meals and reduce how much fresh fruit and vegetables they buy
  • 4 in 10 people on JobSeeker will have less than $14 a day, after paying their rent
  • Over half (53 per cent) said the cut will make it much harder to pay their rent, that they will need to forego essentials like food, medicine, and other expenses
  • close to half (47 per cent) said they will likely have to skip medicines or ration their doses, and that specialist services will be hard to pay for
  • more than half (56 per cent) said it would become much harder to pay bills, that they would likely have to forego some essentials, and would struggle to pay their bills on time

More than 90 per cent of survey respondents said if JobSeeker returned to the old Newstart rate at Christmas time there would be an ‘extreme’ or ‘significant’ impact on their finances.

Download the ACOSS survey report

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