Budget 2022: Fear dole savings will be eaten up by welfare
JobSeeker payments will decline by $7.7bn behind a red-hot economy as 1.8 million people enter the workforce over the next four years.
JobSeeker payments will decline by $7.7bn behind a red-hot economy, as 1.8 million people enter the workforce over the next four years, but the savings risk being swallowed by marked rises in welfare payments for seniors and people with disabilities.
With budget forecasts predicting the unemployment rate will hit 3.75 per cent by September, Josh Frydenberg will bank a $11bn saving as a strengthening labour market reduces JobKeeper and youth allowance payments.
“More people in work, less people on welfare,” the Treasurer said in his budget speech.
Over the next four years, commonwealth payments to the JobSeeker income support program will decline by $1.8bn in 2022-23, saving the taxpayer $7.7bn over the next four years.
This is despite the payments increasing marginally by $13.20 to $629.50 per fortnight for singles without children – projected to cost the taxpayer $2.2bn a year.
But the savings, which is in addition to the $15.7bn improvement with the end of Covid-19 disaster payment and pandemic leave disaster payment, will be overshadowed by significant rises to payments in assistance to the aged and people who are disabled.
Pension payments will increase by $10bn over the forward estimates to $61.9bn in 2025-26, as the nation’s ageing population begins to leave the workforce.
Partially driven by a 2.1 per cent indexation rise to the pension and the disability support payments that came into effect on March 20, increasing $20.10 to $987.60 for singles and $15.10 to $1488.80 for couples, welfare spending will increase markedly over the forward estimates.
Social Service Minister Ann Ruston had heralded the rise as the largest since 2013, but Anthony Albanese has blasted the Morrison government for being “out of touch”, noting the pension increase isn’t keeping pace with rampant inflation.
Combining existing indexation arrangements with the one-off cost-of-living payments, a single pensioner would receive more than $500 in additional support over the next six months “when they need it most”, Mr Frydenberg said.
Senior supports payments will reach $870.7m in 2022-23 and $5.5bn by 2025-26; while disability payments will increase $687m and $4.2bn over the same period.
The budget explained the rise in disability assistance payments by way of an increasing number of people entering the Nationals Disability Insurance Scheme.