Frydenberg said cutting JK & JS at end-March is justified since households & biz increased their savings by +$200B over COVID. Beware of this brazenly dishonest use of macro trends! He is folding low-income people into aggregates w the result that they become invisible. 1/7
Clearly hhlds don’t save at the same rate! While 2020 health restrictions stymied discretionary spending of middle-upper income earners (allowing them to save more), the poorest lifted both essential & discretionary spending (supported by JS/JK). 2/7
ABS data shows COVID Supplement continues to support spending on essentials: paying bills (67%), household supplies/groceries (63%) & rent/mortgage payments (39%) most common uses. Only 26% saved any portion of the supplement in 4wks prior to survey. 3/7 abs.gov.au/statistics/peo…
This savings tendency is v low when you consider the payment has been in place for +6months & pressure to save drastically increases as people prepare for total cutback to 0$ in March. CS clearly still functions to meet critical anti-poverty needs: housing, bills, food. 4/7
Eliminating both JS/JK will mean $5B cut in aggregate incomes, hitting hhld incomes hard. This hit WONT be evenly shared. Those who saved most will likely have savings unaffected (assisted further by tax cuts in Budget), while financial security of poorest will be devastated. 5/7
Australia is failing to deliver sufficient incomes (via jobs or income supports) to millions. After major reductions in poverty last year, govt is throwing 700k people back into poverty & needless hardship w Supplement cut alone. Welfare reform is an urgent priority. 6/7
The Supplement should be restored to above-poverty rate, extended to all payments (incl. carers, single parents, DSP, students). It should also be folded permanently into the base rate of JobSeeker ($565.70) which is clearly inadequate to cover basic living costs. <END>
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