According to the Grattan Institute, due to the coronavirus pandemic, Australia's unemployment rate may reach 10 to 15 cent in the near future.
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This is worse than previous projections, which put the maximum rate at 20 per cent. At worst, therefore, there could be up to 3.4 million people out of work.
Unemployment in Australia has been a bad, and is a worsening, experience. In a still widely cited book from 1990, The Three Worlds of Welfare Capitalism, European academic Gsta Esping-Andersen demonstrated that Australia was not a high-taxing and high-spending welfare state.
It still is not. According to the OECD, Australia's social spending is 17.8 percent of GDP, which is well into the bottom half of the world's richer countries, and lower than the rate in the US, the UK and New Zealand.
It has also been increasingly clear from research ever since the 1990s, that Australia's unemployed face a stronger social stigma than unemployed people in most of Europe.
This is because access to unemployment benefits has always been funded by general revenue in the taxation system, rather than through a social insurance system which acts as an 'earmarked' type of welfare tax.
Giving money to anyone from general taxation, especially when they cannot work, produces a stronger form of stigma.
Good policies today can create better policies down the track through 'path dependency'.
Policy in Australia since the Howard government has only intensified the shaming of the unemployed.
The 'mutual obligations' agenda compels unemployed people to jump though a great many hoops on a weekly and monthly basis in order to keep receiving payments. The obligations have been increasing.
More and more job applications are required to demonstrate job-search, and pressure to move long distances to take up what is often short-term and precarious work has intensified.
Before the current lockdown, the government also wanted to roll out drug testing of those on welfare, as well as the assignment of Cashless Debit Cards designed specifically for unemployed people's use.
These curtail spending to certain retail outlets and limit the range of products people who have them can buy. With these kinds of measures the stigma grows.
The evidence for this is clear to see. Just months before the current crisis, the term 'dole bludger' resurfaced in the media, prompting renewed debate on whether people out of work had a choice in the matter, and whether the rate of what was then called Newstart - now called JobSeeker Payment - was adequate.
It was clearly inadequate. The Morrison government's stimulus packages prove this point. Once COVID-19 started spreading in the community and Australians had just started isolating in their homes, the government suddenly realised that newly unemployed people needed more income.
Both the Prime Minister and the Treasurer realised that the economy relied on unemployed and low-income people to spend more than they had been able to beforehand.
That is why the JobSeeker benefit involved a $550 fortnightly increase, a Coronavirus Supplement, to existing payments.
With these measures the government has already played a significant part in reducing stigma and addressing payment adequacy.
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In addition to JobSeeker and JobKeeper payments - the latter being a wage subsidy to incentivise employers to keep workers employed - it has given many social security recipients a one-off $750 payment now, and another in July, on top of the Coronavirus Supplement. It has also relaxed superannuation access rules.
In addition, the looser criteria for receiving welfare payments will help address the stereotyping of people looking for work. As will the relaxation of 'mutual obligations', which typically shape the experiences of unemployed people and too often result in demoralisation.
If enough people rely on certain levels of support now, they can use their voting power to convince governments to continue support into the future.
The government can show positive leadership and grab the opportunity while it still has it. First, it needs to seriously consider keeping the rate of JobSeeker payments at or near what they are right now.
Second, they need to keep the more liberalised approach to mutual obligations. Third, it needs to 'use' the current crisis as a chance to think bigger about what it means to be unemployed, and change the predominant language around it to be more appreciative of the fact that not everyone can have a job even at the best of economic times.
- Dr Gaby Ramia is Associate Professor in Public Policy at The University of Sydney's School of Social and Political Sciences and Research Theme Leader at the NSW Public Policy Institute. He is the author of the forthcoming book Governing Social Protection in the Long Term: Social Policy and Employment Relations in Australia and New Zealand (Palgrave Macmillan).
