Job seekers queue outside a Sydney Centrelink branch (Image: AAP/Joel Carrett)

Labor has ditched plans to review the JobSeeker rate, effectively abandoning any increase to the $46 a day unemployment payment if elected. 

Responding to a question from the Australian Council of Social Service CEO Cassandra Goldie yesterday, Labor’s assistant treasury spokesman Andrew Leigh confirmed Labor would increase the payment from $642.70 a fortnight.

It’s a move that has drawn sharp criticism from groups such ACOSS, as well as the Greens, who want all income support payments to be raised to $88 a day. 

Leigh said the Morrison government provided a $50 increase to the payment last year after the demise of the coronavirus supplement, which doubled the old Newstart payment from its base rate.

At its current rate, the payment falls well below the poverty line — as of March 2021 it was about $83 a day for an individual including housing, $55 a day excluding. And while unemployment (at 4%, Mr Albanese!) is at its lowest level in more than a decade, a strange quirk of the current labour market means there are now more people on JobSeeker payments than before the pandemic. 

The government is spending about $250 million more on unemployment than it was before March 2020. There are also many more people on unemployment benefits (949,940) than are actually counted as unemployed (607,900). The upshot is that despite the narrative around a triumphant fall in the unemployment rate, there are a lot of people heavily reliant on income support, falling through the cracks of Australia’s economic recovery.

So why is Labor leaving them behind? Leigh pointed to Labor’s plan to boost social housing, saying it was about the “whole package” the opposition would introduce to ease cost of living pressures if elected. Finance spokeswoman Katy Gallagher told the ABC that Labor still had to be sensible about how it looked at the budget.

Opposition health spokesman Mark Butler told RN Breakfast today the opposition had always promised to take a “more focused” agenda to this election than it did in 2019. He then claimed Labor’s push for the government to make its temporary, pandemic-induced increase to the JobSeeker rate permanent led to the modest $50/fortnight increase.

Labor’s stance on JobSeeker is entirely political. It promised a small target campaign, and with unemployment low, job vacancies high, and a raise to the rate potentially viewed badly among the kind of “aspirational” swing voters that Albanese needs to win back from the Coalition, people on the dole will miss out in the interests of a cautious, political calculation. 

The whole debate over raising unemployment benefits — before the pandemic, the old Newstart payment remained inadequate and untouched for years — has been “difficult” for Labor.

Bill Shorten went to the last election with a pledge to review the rate of Newstart. But in the aftermath of that shock loss, several backbenchers called for the rate to be increase to $75 a week, in line with recommendations from ACOSS.

But soon the prevailing narrative — that Labor’s 2019 manifesto was all too big and bold for the electorate — became the dominant wisdom guiding the party’s 2022 offering. While those supporting of an increase in the rate will still be around post-election, and could pressure an Albanese government to change its position, for now unemployed people get shafted.