Coronavirus: Hard-hit communities brace for cuts

The withdrawal of COVID top-ups for the unemployed and other welfare recipients will strip the struggling Cairns economy of nearly $4m a week.

Passions of Paradise dive instructor Kirsty Whitman and master reef guide and environmental manager Russell Hosp are grateful for JobKeeper. Picture: Brian Cassey

The withdrawal of COVID top-ups for the unemployed and other welfare recipients will strip the struggling Cairns economy of nearly $4m a week, exposing the impact of the government’s move to cut aid that has kept Australian households and businesses afloat during the pandemic.

An electorate by electorate analysis for The Weekend Australian of where the money goes shows that nine of the 14 most heavily supported Coalition seats are in Queensland, which delivered decisively for Scott Morrison at last year’s federal election and goes to the polls in 69 days to decide whether Labor Premier Annastacia Palaszczuk is returned for a third term or the Liberal National Party gets its chance under Deb Frecklington.

This adds the electorally costly prospect of a voter backlash to the hot potato issues being juggled by the Prime Minister and Josh Frydenberg as they begin to turn off the tap of coronavirus funding.

The Cairns-based federal seat of Leichhardt, hammered by the shutdown of international and interstate tourism, receives about $30m a month in special support excluding JobKeeper, which goes to more than 7000 local businesses and pours millions more into the regional economy.

Official data crunched by the Anti-Poverty Week organisation shows the $150-a-week reduction in the Coronavirus Supplement to the unemploy­ment benefit and associated Youth Allowance, parenting payments and other welfare benefits including Austudy on September 25 will siphon $3.8m a week from the electorate.

This will be repeated nationally when the CVS is scaled back from $275 a week for JobSeeker, doubling the dole, and as the JobKeeper allowance paid to eligible businesses drops from $750 to $600 a week per employee.

Anti-Poverty Week executive director Toni Wren said the figures reinforced concern that “now is not the time to cut” the financial help.

The CVS goes to 25,491 people in Leichhardt, placing the far north Queensland electorate third behind the Labor seats of Calwell in Melbourne’s outer north (26,699 recipients) and Spence in Adelaide (29,060) in its reliance on Canberra’s cash.

Tourism-dependent Cairns shed 8.5 per cent of available jobs in the opening phase of the pandemic, research by think tank the Grattan Institute shows. “Our tourism industry would be extinct if it wasn’t for JobKeeper and JobSeeker,” said former mayor Kevin Byrne, now boss of the Cairns Tourism Industry Association.

What will happen when the support is curtailed? “It’s going to get tougher for businesses like ours … blind Freddy could tell you that,” said Alan Wallish, managing director of the Passions of Paradise reef cruise service. He employed 32 people before the pandemic; now the staff is down to 18, all on JobKeeper.

Master reef guide and environmental manager Russell Hosp, 36, said he accepted that JobKeeper couldn’t go on forever. But the federal government needed to live up to its promise to improve the targeting and efficiency of the scaled-down scheme.

“JobKeeper needs to be life support, not palliative care,” he said. “We can’t just watch these industries die and I feel like reducing the JobKeeper payment has the potential to do that.”

Passions of Paradise dive instructor Kirsty Whitman, 30, said it likely meant her remaining hours would be slashed. “Obviously that’s a challenge for all of us,” she said.

MP Warren Entsch, who has held Leichhardt for the Liberal Party and LNP for 21 of the past 24 years, said he was comfortable with the timetable to trim JobKeeper and CVS. Asked if the state LNP could face blowback at a tight election on October 31, he said: “I don’t think so … there is not a lot of confusion about where the money is coming from.”