Hundreds of thousands of Aussies to fall into poverty when JobSeeker and JobKeeper end: ANU researchers

A dire forecast shows hundreds of thousands of Australians could fall below the poverty line when government subsidies end in a few weeks.

Hundreds of thousands of Australians could fall into poverty when the federal government ends two coronavirus stimulus packages in just a few weeks.

A September 2020 analysis by Australian National University researchers forecasting 740,000 Aussies would be pushed into poverty still mostly holds up, one of the researchers said.

“The economy is a bit stronger, and unemployment is a bit lower (than predicted), but our conclusions basically hold,” ANU Centre for Social Research and Methods director Matthew Gray said.

The analysis showed that big increase in poor Aussies would occur when the dual schemes of JobSeeker supplements and JobKeeper end after March.

Treasurer Josh Frydenberg has said the government expects unemployment to fall despite ending a wage subsidy program. Picture: NCA NewsWire / Daniel Pockett

Mr Gray and colleagues Ben Phillips and Nicholas Biddle calculated that the coronavirus supplement to JobSeeker and the JobKeeper programs together saved about 2.2 million people from falling below the poverty line in the first few months of the pandemic.

Their analysis, published in The Conversation as the JobSeeker supplement was about to wind down, showed that slashing JobSeeker and JobKeeper would increase the total number of Aussies in poverty from 1.1 million to 1.84 million.

Given that the economy turned out stronger than the researchers anticipated, the number of Australians pushed into poverty will likely be slightly fewer than 740,000.

The latest unemployment figures, from December, show 6.6 per cent of Australians were out of a job. Another 8.5 per cent didn’t have enough work.

JobKeeper is a wage subsidy program for businesses that was launched in late March after the coronavirus pandemic had begun disrupting Australian life.

The initial six-month run was extended in September to run through March 2021.

But that will be it for the program, Treasurer Josh Frydenberg has said.

More than 900,000 Australians were out of a job in December. Picture: NCA NewsWire / James Gourley

“Based on what we know today there should be no expectation that JobKeeper will extend beyond the end of March,” he told ABC’s Insiders program on Sunday.

“It was always a temporary program.”

He said the program had dished out $80 billion and supported more than 3.5 million Aussies.

JobSeeker is an unemployment payment scheme that replaced the Newstart Allowance in March last year.

A coronavirus supplement that boosted JobSeeker payments significantly has been steadily reduced and will disappear completely by the end of March.

Mr Frydenberg has previously said the federal government hopes more jobs will be created even as JobKeeper runs out.

That would happen through a combination of tax cuts, supplementary payments to certain people on income support, and measures to prompt businesses to hire extra workers, he said.