JobKeeper and JobSeeker to be slashed on New Year’s Day

Millions of Australians will see their JobKeeper wage subsidies and JobSeeker welfare benefits slashed on New Year’s Day.

Richard Lawrance and his wife Christine Johnson at their Sydney home on Wednesday. Picture: Nikki Short

Millions of Australians will have their JobKeeper wage subsidies and JobSeeker welfare benefits slashed on New Year’s Day as the government seeks to prioritise job creation in 2021 to help the nation recover from the COVID-19 pandemic.

Labor and welfare groups have called on the Morrison government not to reduce JobKeeper by $200 and the JobSeeker COVID supplement by $100 on Friday, but business is concerned that keeping the payments too high will prevent Australians from ­applying for new jobs.

Social Services Minister Anne Ruston said the government would strike the right balance between welfare and job creation, as a number of support programs faced changes in the new year.

“We know that getting a job is a real game-changer in anyone’s life,” she said.

“As the economy reopens, the government is focused on supporting businesses to create those jobs through JobMaker and putting people on a pathway to those jobs through JobTrainer.

“It is vital we strike the right balance between income support and incentives to work.”

Australian Industry Group chief executive Innes Willox said employers in some sectors were “crying out” for new workers, but JobSeeker was acting as a disincentive. “We can’t have an economy relying on JobKeeper and JobSeeker,” he said. “We’re hearing more and more from employers that both payments are disin­centives to take up opportunities.

“On JobSeeker, the rate should be lifted but not up to the high levels it’s been at. This is a chance for government to consider all the other incentives — rental support, family tax benefits — to create a coherent, targeted package to support people.”

Several government reforms come into effect on Friday, including more freedom for workers to choose super funds — as opposed to one allocated to them — and a simplified insolvency process for small businesses.

New university students will also be subject to a new course fee structure that will slash the cost of post-pandemic “job creator” degrees such as science and maths and increase the cost of courses such as humanities and law by up to 113 per cent.

The most immediate effect will be the supplement reductions for nearly two million JobSeeker recipients and more than a million workers on JobKeeper.

Australian Council of Social Service chief executive Cass­andra Goldie said the end of ­JobKeeper in March would leave more people in need of welfare, and called on the government to cancel the cut to JobSeeker and make the higher level ­permanent: “We need a permanent increase to the base rate of JobSeeker of at least $25 a day above the old Newstart rate so people can cover the basics.

“There is only one job vacancy available for every 11 people looking for a job or more paid working hours, and even fewer jobs in ­regional areas,” she said.

Richard Lawrance, 65, is on JobSeeker after he lost his last contract during the pandemic. He has applied for 136 jobs since then with no success. He fears he and his wife, Christine Johnson, who is also on JobSeeker, will have to leave Sydney if his welfare is cut.

“It’s the lack of interest that ­astounds me — the assumption is that at 65 I would be retiring in two years, but I stress it’s not the case,” he said. “We cannot get by as it is. We are getting to the point where we may have to sell up and leave Sydney and our daughter.”