‘Future is pretty bleak’: Unemployment up as COVID-19 payments end

‘Future is pretty bleak’: Unemployment up as COVID-19 payments end

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The state’s peak welfare lobby says the 200,000 Victorians still relying on federal COVID-19 payments face a bleak future when support is cut off next week.

Victorian Council of Social Services chief executive Emma King said many recipients would be forced back onto the dole instead of moving into work.

Lines outside Centrelink as the pandemic struck last year.Credit:Jason South

“The future is pretty bleak, for about 200,000 Victorians who are receiving the kind of disaster payments now because the jobs market hasn’t bounced back,” Ms King said.

More than 500,000 Victorians came off federal COVID-19 income support payments when the state hit its 70 per cent double-vaccination milestone last month.

But new figures from the Commonwealth Treasury show that 200,000 of the state’s residents are still receiving the payment.

Federal Treasurer Josh Frydenberg has defended his government’s approach to tapering off the payments, saying on Thursday that prospects for jobseekers were looking up in Melbourne and Sydney now the lockdowns had ended, and that it was the right time for federal support to be withdrawn.

Treasurer Josh Frydenberg.Credit:Alex Ellinghausen

The disaster payments were introduced in June as a replacement for the JobKeeper scheme and rushed into place as Victoria succumbed to fresh outbreaks of the Delta strain of COVID-19, which forced the state back into lockdown.

Unemployment and underemployment in Victoria rose sharply in October, the latest official figures revealed on Thursday, spelling bad news for the hundreds of thousands trying to make the transition from federal income support to workforce participation or onto reduced Centrelink benefits.

The federal government linked the end of the payments firmly with vaccination rates, and not economic conditions, with recipients having to lodge fresh applications for support once their state reached 70 per cent fully vaxxed and the payments stopping completely two weeks after an 80 per cent vaccination target had been reached.

Ms King said there was about six unemployed people applying for every job vacancy and the reality was that most people were just going to end up back on unemployment payments.

“At its current rate of $47 a day, [JobSeeker] is too low to buy fresh food, it’s too low to be able to pay for medication, to pay for your rent and also it’s too low to be able to actually look for a job,” she said.

But Mr Frydenberg said he had an upbeat view of job prospects for people coming off the COVID payments.

“We … allowed for a transition period where the payments stepped down,” the Treasurer said. “That is appropriate because the labor force needs to find its right level.

“When you speak to a lot of businesses today in Melbourne or Sydney, whether it’s hospitality, whether it’s construction, mining in Western Australia and elsewhere, labor force shortages are real. So there are jobs.”

RMIT economics Professor David Hayward said Thursday’s jobs figures showed that the federal government should have waited longer before withdrawing the disaster payments.

“Everything has gone south, with a very big lift in unemployment, underemployment and participation, and big falls in employment, participation and hours worked,” Professor Hayward said.

“This [jobs] data relates to the first week of October. We hit 70 per cent double vaxxed on October 21. That’s when federal support dropped off and people had to reapply.

“On the face of it, this was too harsh. Support should have continued for a further fortnight to allow economic activity and employment to start recovering post lockdown.“

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