The news this week that the JobSeeker coronavirus supplement was being reduced by $300 per fortnight will be difficult to comprehend for many families, whose lives have been transformed by the boosted payment.
Australian Council of Social Services chief executive Cassandra Goldie said the $550 supplement had allowed some of the country's poorest people - who'd long been living off a mere $40 per day - to be able to buy a new pair of shoes, or fresh fruit and vegetables.
ACT Council of Social Services chief executive Dr Emma Campbell said the looming reduction would leave the thousands of Canberrans who'd lost their jobs during the crisis without enough money to cover the basics.
However Treasurer Josh Frydenberg said the reduction of JobSeeker and the return of mutual obligations reporting was necessary to get people back into the workforce. "Seeking up to four job searches a month I don't think is unreasonable," Mr Frydenberg said.
This ignores the fact across Australia, there are 13 job seekers for every job. In the ACT, there's one job for every four people looking. By Christmas, another 240,000 Australians are expected to be looking for work.
It also glosses over the fact the jobs recovery will be slow going. According to the budget update, while the economy is forecast to recover faster than in past recessions due to the unwinding of restrictions, the unemployment rate will remain elevated for some time.
At June 2021, it's expected to be 8.75 per cent, down from a peak of 9.25 per cent in December. This suggests while might be politically convenient for the Coalition government to start trying to shift people off welfare, there will not be anywhere to shift them to for some time.
This snapback does not appear defensible from an economic position, either. According to the budget update, the fiscal support provided by government during COVID-19 is expected to increase the level of real GDP by around 0.75 per cent in 2019-20 and 4.25 per cent in 2020-21, compared to if no support was provided.
Mr Frydenberg lamented on Friday the Reserve Bank of Australia did not have the same "luxury" to cut interest rates as it did during the Global Financial Crisis. However, months before the coronavirus crisis, the RBA was imploring government for more fiscal support to boost the sluggish economy. In August last year, Reserve Bank Governor Philip Lowe said raising Newstart would provide a bigger economic boost in the short term than cutting taxes for high-income earners.
It remains to be seen what the Reserve Bank makes of the cuts flagged this week. It appears, though, that they're not only hurting people who can least afford it, but shortchanging our economic recovery.