JobSeeker welfare spike amid labour market pressures

Almost 50,000 Australians have moved on to JobSeeker and Youth Allowance in five months despite historically low unemployment rates, as Jim Chalmers warns of labour market weaknesses.

Treasurer Jim Chalmers during a visit to the Rheinmetall factory in Ipswich on Tuesday. Picture: Tertius Pickard / NCA NewsWire

Almost 50,000 Australians have moved on to JobSeeker and Youth Allowance payments in five months despite historically low unemployment rates, as Jim Chalmers warns of labour market weaknesses including a fall in hours worked and a rise in welfare recipients.

Amid mounting concerns around migration, housing and quality of jobs, Department of Social Services data reveals tens of thousands of working-age Australians shifted on to the welfare safety net between September and February.

Recipients of JobSeeker and Youth Allowance (other) jumped to 876,020 in February, marking an increase of 49,660 since the cohort fell to a post-­pandemic low in September.

Dr Chalmers said on Wednesday that Treasury had forecast for some time the labour market would soften as a result of global economic uncertainty, moderating but high inflation, and higher interest rates.

“Despite the unemployment rate near historic lows, there have been some recent indications of weakness, including a fall in hours worked and a rise in payment recipients,” the Treasurer told The Australian.

“We know there are more people willing and able to work or to work more hours than show up in the monthly unemployment figures, and there’s more that can be done to help those that have been locked out of the jobs market for a long time.”

DSS figures show the average duration for JobSeeker payments at 183 weeks in February, with 66,470 Australians relying on payments for more than 10 years and 126,120 for more than five years.

Current trends indicate the ­majority of new JobSeeker entrants have received the payment for two years or less, with younger Australians vulnerable to volatility in the labour market.

The figures show a reduction in JobSeeker recipients of 19,820 since last year’s May budget. JobSeeker data for March is not expected until the end of the month, weeks before the May 14 budget.

Dr Chalmers said the government was focused on executing key recommendations from its Working Future Employment White Paper to “equip the workforce with the skills needed for the jobs of the future and break down barriers affecting people’s ability to participate”.

Ahead of last year’s budget, the Treasurer said he was determined to help long-term unemployed get back into the workforce and provide more direct support for ­entrenched disadvantaged communities.

Opposition Treasury spokesman Angus Taylor said the JobSeeker data confirmed “the real pain Australians are under in Labor’s cost-of-living crisis”.

“More Australians are on welfare, almost one million Australians are now working second or third jobs, and youth unemployment is higher now than when the Labor came to government,” Mr Taylor said. “Labor’s toxic workplace laws are making it harder for Australians to get into jobs.”

Australian Bureau of Statistics data last month revealed the unemployment rate had plunged from 4.1 to 3.7 per cent, exceeding market expectations and raising concerns the Reserve Bank could delay mortgage relief.

The Albanese government on Monday released analysis spruiking that more than 1000 jobs had been created each day since the May 2022 election. The analysis said 790,000 jobs had been created since the election, including 442,000 full-time jobs.

Opposition social services spokesman Michael Sukkar said more Australians moving onto working-age welfare payments was “not the sign of a healthy economy”.

Asked on Tuesday whether there was tension between the strong labour market and Reserve Bank efforts to tame inflation, Anthony Albanese said “I don’t believe there is”. “What we want to do is to see inflation continuing to moderate. But we don’t want people to pay a price for that. We want people to be brought along on that journey of economic reform. And we’re seeing that. We’re seeing inflation moderating,” the Prime Minister said.