Aussies to receive $100 New Year’s hit
Millions of Australians will be left $100 a fortnight worse off from New Year's Day as the government cuts the JobSeeker supplement.
The JobSeeker payment will drop from $250 per fortnight to $150 on January 1 before the JobKeeper rate is cut by $200 three days later.
Two million Australians on JobSeeker, Youth Allowance and other forms of welfare will be affected.
The JobSeeker payment was initially set at $550 at the height of the pandemic, but the Coalition has always insisted the boost was temporary. It was lowered to $250 per fortnight in September and will end in March.
The January cut will come at a time unemployment is forecast to peak, with Treasury predicting unemployment will rise to 7.5 per cent in the March quarter, though that was revised down from initial estimates of 8 per cent.
Labor has warned the economy is not strong enough to taper the payments, with frontbencher Bill Shorten saying the cuts were "too harsh" on people already living pay cheque to pay cheque.
"We're not talking about big amounts of money … People shouldn't have to live on two-minute noodles and a can of baked beans," he told Today.
"There aren't the jobs there for people to go into. We are not in full employment where you can go out the front door and get a job. It is hard.
"In regional Australia, we have got to stand up for the regions and just provide some more money in their economy.
Mr Shorten warned Australia was not "out of the woods yet", with an expected spike in insolvencies throughout 2021 to swell the unemployment queue.
"The economic effects (are) reverberating around the economy, especially in regional towns and suburbs where there are a lot of casual workers who have born the biggest brunt," he said.
"I think for the less well off we shouldn't be cutting their circumstances at this point in time."
The labour market showed signs of recovery recently, with unemployment dropping to 6.8 per cent in November.
Treasurer Josh Frydenberg said in December the government would keep its options open beyond the March cut-off date.
"We will continue to monitor the labour market situation, but what we want to do is get people from JobSeeker into work," he said earlier this month.
The government has been buoyed by stronger-than-expected figures in its half-yearly update, with Mr Frydenberg insisting the economy has "turned the corner" after the initial shock of COVID-19.
The September quarter GDP rose 3.3 per cent, the largest quarterly increase since 1976.
Originally published as Aussies to receive $100 New Year's hit