Some of Australia’s poorest electorates could lose as much as $3m a fortnight in economic support if the coronavirus welfare supplement ends, new analysis reveals.
The analysis of government data, broken down by federal electorate by Guardian Australia, estimates an average of nearly $2m per electorate could be lost every fortnight if the $150 supplement is not extended at the end of March.
Overall, about $300m could be lost each fortnight among the 2 million people on jobseeker, student and parenting payments who receive the supplement. That includes about $195m that goes to jobseeker payments for the 1.3 million people on unemployment benefits.
The government has fended off calls to announce a permanent increase to the jobseeker payment, which is $715 a fortnight, including the $150 coronavirus supplement. While some Coalition MPs have urged ministers to avoid reverting to the old rate of $565 a fortnight – or $40 a day – others claim a boost to the dole is unaffordable.
Guardian Australia’s analysis shows many of the Coalition’s wealthy seats in Sydney will be least affected by a cut, while working class suburban seats held by Labor, and some regional seats held by government backbenchers, will be the worst affected.
Spence, a Labor-held electorate in Adelaide’s northern suburbs, would lose $4.1m a fortnight among the 27,000 welfare recipients who get the fortnightly Covid top-up.
That’s followed by the Labor-held seats of Calwell, in Melbourne’s outer north ($3.7m), Fowler in western Sydney ($3.5m) and the NT electorate of Lingiari ($3.4m), where more than 40% of the population is Indigenous.
“It will be a tragedy and a national shame if the remaining coronavirus supplement is abolished,” said the Labor MP for Spence, Nick Champion, adding the topped-up rate should be a “bare minimum” for any permanent increase.
The worst-hit Coalition electorate would be Leichhardt, which stretches from Cairns to Cape York and is held by Queensland Liberal MP Warren Entsch. The analysis found $3.4m would be lost a fortnight, including $2.3m on jobseeker payments.
Asked if he would be comfortable if jobseeker returned to the old rate, Entsch said he would defer to the experts, but he would be “surprised if it did”.
He said it was a “fine balance” and was worried about disincentivising work if the payment was too large.
One of the worst-affected electorates in NSW would be Cowper, held by Nationals MP Pat Conaghan. The seat, which spans from Port Macquarie to Coffs Harbour, would lose an estimated $2.6m a fortnight in welfare support if the supplement ended.
Conaghan said he supported a 20% to 25% increase to the pre-pandemic jobseeker payment.
“We want to be able to provide an adequate safety net for those who are actively looking for work, whilst at the same time not creating a reliance on government welfare,” he said.
“I hear of children regularly going to school without food in Nambucca and Kempsey … This is unacceptable in Australia in 2021.”
The analysis, which is explained in detail below, suggests an estimated 6,328 people would lose the $150 supplement in Scott Morrison’s electorate of Cook, equal to $949,173 a fortnight, while $987,168 would be lost in Kooyong, held by Josh Frydenberg, from an estimated 6,581 welfare recipients.
Economists and social service groups have warned that pushing what is now an increased number of people relying on jobseeker payments on to the old Newstart-level payment would hurt the economy.
The economist Nicki Hutley said the economy was already feeling the effects of tapering the supplement down from the $550 rate that applied in the first months of the pandemic.
“But the final nail in the coffin, if you like, will have a massive impact on spending,” she said.
Last year Hutley estimated in a report for her former employer Deloitte that ending the coronavirus supplement could cost hundreds of thousands of jobs.
Australian Bureau of Statistics data has found coronavirus supplement recipients were far more likely to spend their extra money on household bills, groceries, rent or a mortgage than save it.
Labor has called for a permanent increase to the jobseeker payment, but is yet to name a specific figure. Champion said the current rate with the $150 supplement would be the “bare minimum to keep people out of poverty”.
“If we were serious about giving people some sort of degree of dignity, it should be something around the disability support pension rate [$944 a fortnight],” he said. “I think there should be a single rate at the high end to keep people out of poverty and make sure they can have some dignity within society.”
Champion disputed claims that the rate of jobseeker payment was leaving employers unable to attract workers. “This is the sort of anecdotal bit of bullshit that gets spread around the place to prevent people from facing up to our obligation not to have thousands of people across the country living in poverty,” he said.
Kristin O’Connell, of the Australian Unemployed Workers Union, said her organisation was “bracing for an absolute onslaught when the rate is cut again on 31 March”.
Cassandra Goldie, the chief executive of the Australian Council of Social Service, said there were “clear economic reasons for ensuring people have to cover the basics” but that primarily the case was about “human need”.