Thursday, 10 August 2017
Social Security Amendment (Caring for People on Newstart) Bill 2017; Second Reading
It's with pleasure that I commence the debate on this very important issue. The Social Security Amendment (Caring for People on Newstart) Bill 2017 that we are debating is about increasing the single rate of the Newstart payment and the single independent rate of youth allowance. We've been hearing a lot about inequality lately in this chamber. In fact, we Greens have been raising this issue for a long time. Inequality is one of the greatest challenges that we face not only in Australia but globally. Income inequality is growing in Australia, and many people battle daily with poverty and with the impacts of inequality to meet their basic living expenses. Inequality creates significant negative effects on people's physical and mental wellbeing, societal cohesion and stability, and our economic growth and productivity, to the point where we are seeing industry and businesses talking about the impact of inequality. The research and literature is clear about the impacts of inequality on people and on our society and community.
In mid-2014, I initiated a Senate Community Affairs Committee inquiry on the back of that horror 2014 budget. That inquiry into the extent of income inequality in Australia found that, on a number of metrics, the evidence indicates that inequality has increased in Australia against the backdrop of rising incomes and across all income deciles. Currently there are nearly three million people, 13.3 per cent of our population, living below the poverty line in Australia, after taking account of their housing costs. Seven hundred and thirty-one thousand and three hundred of these are children.
Poverty and inequality have devastating impacts on life outcomes. Poverty undermines access to education and training, and educational outcomes are directly related to socio-economic status. Poverty limits access to safe and secure housing, transport, employment outcomes, child care and many other aspects of full participation in society. Poverty is a daily challenge for many Australians, undermining their ability to have dignified, meaningful and productive lives. What is incredibly saddening is that the number of people falling into poverty is increasing and that those most likely to find themselves living below the poverty line are already facing the most disadvantage. We are in fact a wealthy nation and have resources available to us to significantly reduce the existing rate of poverty, if only there were the political will to do so. No-one in a country as well off as Australia should be living in poverty and dealing with the increasing levels of inequality we are facing in this country.
Of those on income support in Australia, 36.1 per cent are living below the poverty line, including 55 per cent of people receiving Newstart allowance, and others continue to struggle on extremely low incomes. We need visionary policies to overcome the underlying drivers of poverty. We need such things as affordable housing and access to education and employment, and we need to ensure we have a strong social security system that properly supports people and is fit to meet the challenges we face in the 21st century. A strong social safety net is the foundation of a more inclusive and productive society. The Australian Greens want to see a stronger safety net and adequate income support payments. A strong social safety net is a key part of addressing inequality. A social safety net ensures that, when people fall on hard times, there are supports in place to help them when they need it most.
The changing nature of work—increasing part-time and casual employment, underemployment, short-term contracts and uncertainty of weekly incomes—highlights the need for a 21st century social safety net that is more flexible and responsive. Such a system is better suited to supporting people to maintain their financial resilience as they move in and out of work and to cope better with variable and uncertain income. This is why many modern and progressive societies are adopting more flexible and responsive social security systems as a way of ensuring their economies remain competitive, their communities stable and their workers better able to respond productively to rapidly changing workplaces and technologies.
Australia's income support system is complex, inadequate, punitive and difficult to navigate. The Greens are committed to developing a 21st century social safety net that supports and underpins an inclusive community and a fair and just society, where we have a productive workforce. We will continue to campaign for a social safety net that truly supports those in our community and meets the needs of the 21st century. But right now there are those that are unemployed and on Newstart who are struggling to survive because the payment is inadequate and puts them below the poverty line, living on extremely low incomes. In fact, poverty is a barrier to trying to find employment. So we are very proudly bringing this bill in to address that most immediate issue.
The evidence presented to the Community Affairs References Committee inquiry into inequality in Australia in 2014 showed that the level of the Newstart payment is too low. In conclusion, the report Bridging our growing divide: inequality inAustraliaThe extent of income inequality in Australia found it is clear that income is a key factor in determining the economic wellbeing of most Australians. A low income or low-transfer payments will often exacerbate the disadvantage suffered by a person and their dependants. Take the case of a retrenched worker who may be forced to live on savings or the Newstart allowance for a period of time. This may mean forgoing health services, out-of-pocket expenses, remortgaging or ending child care or private school tuition for the children. A more prolonged period of unemployment may lead to despondency, mental health problems, marital breakdown and homelessness; again, underpinning the impact low Newstart payments have on people.
This same inquiry looked at what principles should inform a well-designed social security system. One of the principles put forward by ACOSS and COTA Australia was the principle of adequacy. The word 'adequacy' is the key point here. Generally, adequacy of income-support payments is considered fundamental and, in fact, goes undisputed. Currently, the ratio of the Newstart payment to the full-time minimum wage is 38.54 per cent. This comparison relates to the maximum fortnightly payment for a single Newstart support recipient with no dependant children and does not include other allowances such as individuals may be receiving. However, it does provide an indication of the inadequacy of the base rate of the payment itself. Sadly, this ratio has been falling since the mid-1990s. In fact, it has even fallen further since this report.
Professor Peter Whiteford told the committee that the relative financial position of a Newstart recipient today is lower than it was in the early 1990s. He said that the poorest 10 per cent are 40 per cent better off than they were in the early nineties. But if you are on Newstart, the real increase in your payment is negligible. Someone who is at the 10th percentile is 40 per cent better off, but a person on Newstart compared to somebody who was on Newstart in the early nineties is not 40 per cent better off. The reason is that people on these income payments are moving down the income distribution. Back in the early nineties, if you were a single person on Newstart, you were about $6 to $10 a week below the tenth percentile point. You are now about $160 a week below that point—this was in 2014. People on these payments are falling down, so to speak. I would have thought a person on Newstart, or Youth Allowance, is now right at the real bottom of the income distribution.
The committee was clear on the importance of the payment levels of income-support payments being adequate to ensure that people are not living in poverty, yet still nothing has been done. The Australian Greens want to see people who are unemployed move into stable and suitable employment. We do not support the argument the keeping people in poverty helps that. A number of submitters to the Senate inequality inquiry took issue with the argument that a lower payment would promote participation in the workforce. Current payment levels are so low they could hinder an individual's ability to find work. For example, this could be because an individual is unable to meeting the cost of clothing themselves or meet the cost of transport to a job interview. Such incomes can lead to physical and mental ill health. An adequate base payment would reduce the stress factors Newstart recipients face and provide them with a springboard to find employment and join the labour market.
Australia's key unemployment benefit, Newstart, has not had a real legislated increase in over two decades. A single person on Newstart receiving the maximum payment has to live on $38.39, including the energy supplement, a day. This is less than half the minimum wage. The Australian Greens have long been calling for an increase to Newstart and had a bill in two previous parliaments to increase the single rates of Newstart and independent Youth Allowance. Leading community organisations, businesses and the community have all called repeatedly to increase these inadequate payments. Despite this, both Liberal and Labor governments have failed to act, despite frequent calls and strong campaigning.
Instead, governments have successively hacked away at the income support system, reducing much-needed supports. Instead, the government has deliberately—in fact, I would say maliciously—propagated myths about those on unemployment benefits and takes every opportunity to demonise those accessing income support, without any compassion or understanding of the reality of those living below the poverty line who are trying to make ends meet when they are on Newstart.
Now, in fact, we see the government harassing people on Newstart, with letters with the AFP logo on them and, one week later, following it up with a text to people on income support, including people that have poor mental health. Imagine the impact on those people. The fact is that there are not enough jobs for people on Newstart at this point. According to the ABS, in February 2017, there were 186,400 job vacancies in Australia, while there were 743,700 people who were unemployed. Young people are more than twice as likely to be unemployed.
Humiliating, demonising, attacking people and making people's lives harder is not the way that we should be addressing this issue. Making it more difficult for people to re-enter the workforce is not the way we should be addressing this matter. We recognise that single people living on Newstart and independent youth allowance are the ones who are typically the most disadvantaged by our current income support system. The maximum fortnightly payment of Newstart for a single person with no dependent children, at the time of this bill's introduction, is $535.60. That is $338.60 less per fortnight than the maximum rate of the payment for singles, including the pension supplement on the age and disability pensions—and those are considered too low. The maximum fortnightly payment for youth allowance living away from home is $437.50. That is $98.10 less per fortnight than the rate of Newstart for a single person with no dependent children.
The Social Security Amendment (Caring for People on Newstart) Bill 2017 will give effect to the Australian Greens' commitment at the last election to increase the single rate of Newstart and the single independent rates of youth allowance by $110 per fortnight. For single Newstart recipients, it does this by introducing a Newstart supplement of $110 a fortnight. For single independent youth allowance recipients, the maximum basic rates are also increased by $110 a fortnight. It is not hard to image what people trying to live on these payments could do with that additional money. They will spend it and drive the economy at the same time as it helps improve their situation. This change will help by bringing some relief to those on the very lowest rates of income support and will assist them to make their lives just that little bit better.
The focus on singles is based on evidence that these households are the most at risk of poverty. The ACOSS report Poverty in Australia in 2016 found that single people generally faced a significantly higher risk of poverty than couples—26.4 per cent compared to 10.1 per cent. Thirty-three per cent of single-parent families are living in poverty, compared with 11.3 per cent of couples with children. This reflects, in part, the economies of scale available to people living with partners.
This bill will also index these payments to those of other income support payments, such as the pension. We know that the rates of indexation between the pension and Newstart are different. The pension has coped with the increasing costs of living a lot better, and has risen a lot more, than the Newstart allowance, so this bill addresses that issue. The call for an increase in the base rate of allowance payments has received widespread support, not only from social services organisations but also from business groups, unions and various economists.
In 2012, the Senate Education, Employment and Workplace Relations References Committee report entitled The adequacy of the allowance payment system for jobseekers and others, the appropriateness of the allowance payment system as a support into work and the impact of the changing nature of the labour market found that the payment rate of Newstart was inadequate. That was in 2012—five years ago! Despite these findings, both Liberal and Labor governments have refused to take action. The Greens are the only party that are calling for a rise in this inadequate payment.
As well as assisting people out of poverty, the other key reasons for increasing the single rates for Newstart and the independent youth allowance include: the extended length of time that many recipients now have to spend on these payments; the cost of living pressures faced by those in receipt of the single rate of the allowances; and the growing gap between the pension and allowance payments due to these different types of indexation. This bill will directly assist single people living on Newstart and the independent youth allowance. It is imperative that these people receive an increase in this allowance.
The gap between the allowance and the pension payment is increasing. Newstart allowance is indexed to the movement in the CPI in March and September; the youth allowance is indexed once in January. Pensions are indexed twice a year, in March and September, by the greater of the movement in the CPI or PBLCI—an index designed to better reflect the price changes affecting pensioners. The rate is also benchmarked to a percentage of the male total average weekly earnings. It is time that Newstart was similarly indexed.
This bill will address this widening gap. A $110 per fortnight increase in eligible payments will ensure a fairer and more straightforward social security system and immediately help Australian people who are living in poverty on these low-income support payments. Better indexation will help maintain the value of an increase into the future. This is one of the ways that we need to address the growing inequality in this country.
The Greens have long advocated for this increase. We have long advocated and recognised that inequality in this country is growing. Part of that is due to these low rates of payments. The ideological approach of this current government gets in the way of their seeing that this is an imperative and must be done. For those who care about inequality in this country, this is a logical step that needs to be taken.
I commend this bill to the chamber and urge everyone in this chamber to realise the urgent need to increase Newstart and the independent rate of youth allowance and to take this vital step. I acknowledge there are other things to do to address inequality, and we will be addressing those, but this is one thing that we can do now to increase the payments that people are struggling to live on and to start to address inequality in this country.
I rise to contribute to the debate on the Social Security Amendment (Caring for People on Newstart) Bill 2017. Australia is fortunate to have a strong social security safety net to assist those in need. As Minister for International Development and the Pacific, I travel extensively and have seen firsthand many systems that do not do this.
A good social security system is the hallmark of a modern, prosperous and egalitarian society. Our social security system has prevented thousands of people over the decades from going hungry, or going without clothing or shelter. But while our welfare system achieves the fundamental objective of ensuring people are not without the basics, it has also created problems that were never intended. Our welfare system represents a third of our budget. It costs $160 billion per annum. It represents 80 per cent of all individual income tax raised in Australia. This means that 80 per cent of Australians' income tax goes towards footing the welfare bill. It is growing by six per cent per annum, which is faster than inflation or GDP growth. But the most pressing problem is that our welfare system is failing too many of the individuals it was set up to serve.
There are now whole regions where there are as many people receiving income from welfare as there are actually working in a job. Too many people are led into lives of dependence and passivity, with insufficient incentive to make the most of their innate potential. For them, welfare has become a destination, not a safety net. While welfare for a short period can be a blessing for a capable person temporarily out of work, long-term welfare dependence can become a poison. Over time, welfare dependence sucks the life out of people and can diminish their capacity. It can impact on their confidence and their mental and physical health. The purpose, the structure and the dignity which come from work are lost. And sometimes dependency crosses over to the next generation. A system which encourages such dependence does not need to have fuel added to the fire.
To many welfare rights advocates, including the Greens, and the Labor opposition, say the only way you can assist people is to provide them with more cash payments, preferably without conditions. The Greens bill here today again demonstrates this. They want to increase the welfare bill even further. As usual, the Greens have absolutely no idea—no idea—how you're going to pay for it, and no interest, quite frankly, in finding that out. You haven't even bothered to include the cost of your proposal in your legislation. But we have done our due diligence, and I can tell you that this proposal will cost taxpayers over $2 billion per year. That is upwards of $8 billion over a four-year budget cycle.
The Greens have justified this bill to increase Newstart by saying that the payments are too low. If they had done their due diligence, they would have found out that less than one per cent of Newstart recipients actually receive Newstart alone. The other 99 per cent of Newstart recipients receive additional payments and supplements. These are based on their circumstances, as part of our strong social security safety net. It includes providing rent assistance to those in the private rental market, and family tax benefits to those raising children. Other supplementary benefits include a pharmaceutical allowance, an approved program of work supplement and a telephone allowance, as well as a concession card. The system also allows recipients to earn income from work or other sources before their payment is affected. It is also important to note that many recipients of Newstart do not remain on the payment for long.
So, on those two points, in fairness to Australian taxpayers, it's vitally important that, if you are coming into this place to make this sort of assertion, you actually do your calculations and you do them appropriately, taking into account the bigger picture, the whole picture—the fact that your Newstart recipient is receiving not just one payment but a whole range of other payments as well. As I said, many recipients of Newstart do not remain on the payment for long. Around two-thirds of those granted Newstart exit income support within 12 months.
Our welfare system and the reforms introduced by the Turnbull government encourage those capable of work or study to do so, but they also support vulnerable people within our society. Work is more than money. It is self-worth from self-reliance. It is friendships. It is purpose. It is a meaning to life. Of course, there is another very strong reason why even a job that pays only the same or somewhat more than welfare still has a very strong economic benefit, and that is that the best way to get a better paying next job is through the experience and skills gained in the first job.
The OECD found that nearly 600,000 young Australians aged between 15 and 29 were not in education, training or employment, and around two-thirds of them were not actively seeking work. We need to change the attitude that simply spending more on more of the same payments inside the same system will actually improve lives. More spending in and of itself is no guarantee that key groups have or will have their lives improved in any material, ongoing or significant way. While the welfare system must always be about providing appropriate support for those who are unable to work, real social progress means an intensity of focus on those programs, settings and structures that have the proven effect to better prepare people for and transition them to employment. The Turnbull government's objective is to put people on better pathways, to encourage reskilling, if required, to help people off addictions, if they are present, and to gear all the incentives towards looking for work and taking jobs when they are available.
We must make our system more financially sustainable. The great moral objective of our welfare reforms is to support able people to enjoy the dignity, the self-empowerment and the economic independence which come from having a job. That is why the Turnbull government is getting on with growing the economy and creating more jobs. Under the Turnbull government, more than 240,000 jobs were created in the last financial year. This is the largest increase in jobs since before the GFC. In comparison, Bill Shorten is doing nothing but trying to exploit the politics of envy and division, without actually announcing anything but higher taxes. He says, in an example of one of the great platitudes of all time, 'Inequality kills hope. It feeds that sense, that resentment, that the deck is stacked against ordinarily people, that the fix is in and the deal is done—that it's not what you know; it is who you know.'
Contrast this with facts. The experts, including the HILDA survey—the Household, Income and Labour Dynamics in Australia survey—tell us that Bill Shorten is wrong and that, since 2001, income inequality has actually improved. Despite this, we know that some in the community don't feel like things have gotten better. Wages are stagnate, and many haven't had a pay raise in a time. But what is Mr Shorten's fix on this? He goes out there and makes speeches and then he says that we need to increase taxes on companies, workers and small business. In the process, he is crippling ambition and taking money out of the economy that would have otherwise been used to create jobs for the people who actually need them.
What hypocrisy from Mr Shorten and those opposite! For six years you sat on the Treasury benches and what did you give us after six years? More debt and more deficits—six years of fiscal vandalism. When you came to power there were billions and billions of dollars in the government coffers. You squandered all of that money in the coffers. You squandered all of that money that had been to you—billions and billions and billions of dollars. You squandered it on pink batts and useless things, and now somebody has to pay for it. We are now left with that legacy of fiscal vandalism and we now have to pay for your debts. So don't come into this place all high and mighty and be hypocritical. Look at and properly reflect on the legacy of fiscal vandalism that you left this country.
Our approach is different. We want more jobs created, which we are doing, and we want to support people into those jobs. That is why we are actually delivering policies to make this possible, unlike the Greens proposal here, which is just another funding hike. We have redesigned the working-age welfare system to make it simpler for people to navigate and ensure that the focus remains on finding a job. Labor cannot bring itself to support this. We are rewriting the mutual obligation system to make sure more people remain connected to the workforce for longer. This change has obvious benefits for anyone looking for work, and Labor won't say if it will support this.
We have announced a national expansion of ParentsNext. This is a $260 million program designed to help disadvantaged parents increase their skills and find a job. But what is Bill Shorten's response to that? 'Inequality is workers in their 50s and 60s, displaced, struggling to find work again, job interview after job interview unsuccessful.' In the last budget, we committed $98 million to the expansion of mature-age reskilling programs, and this is despite Labor not having a single policy to help mature-age workers. We still don't know if Labor and those opposite are going to support our policy.
It was the Turnbull government that made the $100 million investment in the Try, Test and Learn Fund, finding new ways to help people in disadvantaged positions. It was those on this side that proposed reforms to disability employment services to help more people with a disability find and keep work. It was us on this side who have reinstated homelessness funding after Labor left the budget without a single cent for the homeless.
I have often sat with Senator Siewert at community affairs committees, and that is the reality of what she and the Labor-Green alliance left us with. When she comes in here and bleats about homelessness, let's not forget that, when those opposite left government, it was left to us—those on this side—to reinstate homelessness funding. Labor left the budget without a single cent for the homeless, and it was those on this side that made this funding permanent. We made it permanent.
We are the ones who are fixing Labor's National Affording Housing Agreement so that it actually delivers affordable homes. We are the ones fully funding the National Disability Insurance Scheme so that everyone, whether they are earning $50,000 or $300,000, will be fully protected in case they become severely disabled. Our plan for the NDIS means it is finally guaranteed but, more importantly, it is a fair system. Low-income earners will be exempt from the Medicare levy, while those earning high incomes will contribute the most. But Bill Shorten opposes this.
Labor voted against $23.5 billion in extra school funding and historic reforms to child care, which will primarily benefit low- and middle-income families, and they still claim to be about reducing inequality—sheer hypocrisy by those opposite.
The Turnbull government's policies are all focused on growing the economy, creating more jobs and helping people into them. Those opposite just want to increase the tax burden, with individuals, homeowners and small businesses hit the hardest. Now, of course, the Greens want to add a bit more onto that debt pile, as if we don't have enough paying off Labor's debts after six years of fiscal vandalism. The problem is that Bill Shorten has no plan for how to help those in our society that need it, apart from taking money away from those in our economy who are actually creating jobs and paying taxes.
I am quite amazed by that speech by Senator Fierravanti-Wells. In speaking on the Social Security Amendment (Caring for People on Newstart) Bill 2017, I want to try and correct some of the statements that have been made.
Let me go to the Greens first. The Greens indicated they are the only party calling for an increase in Newstart. Labor has acknowledged that Newstart is too low. The Leader of the Opposition, Bill Shorten, has said on a number of occasions in recent years that it is too low. Labor acknowledges that too many Australians are living in poverty. It was Labor that defended young, unemployed Australians when the Abbott-Turnbull government wanted to make young people wait six months to access Newstart.
Senator Fierravanti-Wells said, 'Don't add fuel to the fire.' There'll be plenty of people on Newstart who won't have any fuel—whether it's electricity or gas—to actually keep themselves warm. Senator Fierravanti-Wells says it would cost an extra $2 billion per annum to increase the Newstart allowance to the allowance that's been proposed by the Greens in this bill. How ridiculous is it that we have a coalition that want to hand $65 billion in tax cuts to the big end of town, and yet they stand here and argue that they can't look after people on Newstart? They are a party that wants to look after big business but ignore people who are doing it tough. We've seen them: they're all about the vilification and demonisation of people who are down on their luck and relying on Newstart.
This argument of, 'You've just got to get a job and everything will be okay,' I suppose, is alright if you live on the Northern Beaches of Sydney, the eastern suburbs or the wealthier areas of Australia where you don't actually have to see much unemployment. But what the coalition needs to understand—and they obviously don't—is that there are 189,200 jobs available within Australia. There are 726,800 unemployed in Australia. So it's not as if you can just get your gear on in the morning, lob out there and find a job. You never hear the coalition talking about that figure. It's not easy to get a job in some areas, and it's impossible to find a job in other areas.
I notice that we're going to have coalition people speak to this later, and we have two National Party members in the chamber now. If you look at the National Party seats, they've got some of the highest unemployment in Australia. Senator Williams would know it's not that easy to go out and actually find a job in some areas in National Party electorates. In National Party seats, unemployment has risen by 1.3 per cent on average since the coalition came to power. Since September 2013, unemployment has risen by 1.3 per cent on average in National Party seats. What a great example of how the National Party come here and suck up to that nonsense that we just heard from Senator Fierravanti-Wells, but are out there presiding over some of the highest unemployment in the country. It just beggars belief.
All they want to do is vilify the unemployed, vilify those that are down on their luck. Look at what the government did when they first came to power. They wanted to make young Australians wait six months to access Newstart. What would that do to young people in National Party seats where there were no jobs? They would either have to have rich parents or be part of the rural hoi polloi, or they would be left starving. It's an absolute disgrace the way the National Party and the Liberal Party have dealt with unemployment and social security benefits over the last period of time. They wanted to abandon young jobseekers for six months. Starve! That was their approach, and Labor defeated that.
After we defeated it, the Liberals tried to make young people wait five weeks before being able to access income support. Remember the argument that was put forward by Senator Fierravanti-Wells: 'Just go out and get a job. That's the best inoculation from welfare. Just get a job.' Well, I repeat again: there are 189,200 jobs available in Australia, and there are 726,800 unemployed. Many of those unemployed would not have the skills, the training or the capacity or live in the region where these jobs are, so it becomes really, really difficult.
Senator Fierravanti-Wells ran the same nonsense that 'Labor squandered money when they were in government'. What Labor did was to implement one of the most effective—if not the most effective—approaches to dealing with the global financial crisis that we had, and we kept jobs being created around the country. That's what Labor did because we understood that, if jobs were lost, then intergenerational unemployment would increase. So we spent money on keeping people in jobs—in National Party seats around the country. Not only were individuals looked after by Labor, but communities were looked after and families were looked after. They had jobs when workers around the world were being thrown on the scrap heap.
But those opposite seem to forget that there was a global financial crisis. They forget that, just as they don't have any idea or don't want to recognise that there is global warming and a real problem for the future. They don't want to recognise that they don't have the policies and they don't have the cohesion internally to actually deal with any of the problems that are facing Australians around this country.
So Labor defeated those cuts that were put there. We defeated the unfair Liberal and National Party cuts to paid parental leave. We defeated the Liberal and National Party unfair cuts to pension indexation. This is the mob that wanted to cut the pensions of Australians. That's what they wanted to do, and it was only Labor standing against it that stopped that. We defeated the Liberals' unfair GP tax that would have undermined Medicare as our universal health system. We defeated the Liberals and Nationals' unfair cuts to young people that would have seen thousands of young Australians shifted from Newstart onto the lower youth allowance payment. We have consistently stood up for vulnerable Australians against this government's unfair cuts.
I just find it beggaring belief that the National Party, who represent the victims of the Liberal Party's ideology, come in here and vote with them to cut the social security payments for their constituents in their seats around the country when there are not the jobs available in National Party seats around the country. The National Party are an absolute disgrace. They just hang off the coat-tails of the Liberal Party, and then they try and run the Liberal Party when it comes to some ideological approach that they want to push. They are an absolute disgrace.
We have led the debate in this country on inequality. Bill Shorten, Wayne Swan, Jenny Macklin and Andrew Leigh have all been doing important policy work on the issue of inequality. Inequality isn't just the gap between the rich and poor; it's about the millionaires getting tax cuts under this government and large multinationals getting $65 billion in giveaways, while millions of Australians have had no wage rise for years. It's about inequality in the housing market because first home buyers are lining up against property investors who have been subsidised by unfair and distortionary policies like negative gearing. It's about the gender gap in the pay that men and women in this country receive and the unfair deal that women are getting. It's about the gap between Indigenous Australians and the unfair outcomes they're getting in health, education and housing.
And any conversation about inequality also has to focus on poverty. We know that Newstart is too low. We know that too many Australians are living below the poverty line. As last year's Growing together, Labor's agenda for tackling inequality, document stated:
The net replacement rate for the Newstart payment for a single person is equivalent to just 28 per cent of the average wage. That compares with an average of 47 per cent in other major English-speaking nations, such as Canada, Ireland, New Zealand, the United Kingdom and the United States. While the mechanisms for supporting the unemployed differ in each of these countries, there is no denying that income support for unemployed Australians is very low by international standards.
We are doing the policy work. That's why at the last election Labor said that we'd establish a review into the adequacy of the Newstart allowance for people of working age and their place in the wider system of working age payments and employment supports. We won't be coming here when there's not enough jobs for every Australian that's looking for them and tell them, 'The best thing you can do is get out and find a job.' It's an absolute lie, perpetrated by the extremists in the Liberal and National parties who are presiding over some of the lowest paid in their electorates, and some of the worst unemployment and some of the worst housing conditions in the country. So much for the National Party and so much for the Liberal Party!
We've have said that, when we do the review, we'll look at the adequacy of the base rate of Newstart to meet what is widely understood to be the essential living costs required to achieve a reasonable minimum standard of living. We will look at the adequacy of the current indexation of allowance payments in the context of indexation arrangements across the social security system. We'll look at the role of the Newstart allowance and other working age payments in promoting and supporting workforce participation, including through smooth transitions to paid employment, help with the cost of job search, training and employment. Labor wants a comprehensive and independent review into the adequacy of Newstart that we think should be done against two primary objectives: one, alleviating poverty and, two, encouraging work. We also believe that the review should consider the adequacy of Newstart for people raising families, particularly single parents.
I'd dearly love to see an increase to Newstart, but this bill isn't the right way of going about it. Let's be clear: it's a stunt by the Greens political party. It's symbolic. It won't pass the parliament. The Greens know that this would never get through the House of Representatives. The Greens know that the appropriations bills in the House have to be introduced by a minister. Yet they introduce this bill in the Senate and give so many Australians false hope that Newstart might be increased—and it's all for their own political purposes.
It's worth noting that this bill has come on for debate on the same day it was introduced into the Senate. It's not a fair dinkum proposal and the Greens know it. They haven't done the proper policy work. They haven't done the hard work of policy development that you need to make this kind of change. They haven't even discussed it with the opposition before springing it on us today.
Unlike the Greens party, the opposition requires proposals to be properly developed, costed and considered before we can support them. The truth is, if you want to see an increase to Newstart, you have to change the government in Canberra. You have to vote out the Liberals, because they will never help the vulnerable. They've never helped the unemployed. The last time there was a significant increase to social security payments, it was done by a Labor government.
In 2009 it was Labor that increased the age pension and the disability support pension by $30 a week—the largest increase to the pension in its history. And you know how that came about? The newly elected Labor government commissioned the Harmer review into the adequacy of the pension. A proper policy process was undertaken, there was consultation with key stakeholders, and we increased the age pension and DSP. It was announced in the budget and paid for in the budget. The pension was increased by $30 a week and, as a result, one million Australians were lifted out of poverty. That's how you bring about change. That's how you lift people out of poverty. It didn't happen because of a stunt in the Senate from a minor party like the Greens. It happened because a Labor government was in office and able to bring about change. Labor can actually bring about change, not just talk about it like the Greens.
Isn't that surprising? Labor is promising another review. My colleague Senator Siewert has tirelessly championed this increase for some of the most vulnerable Australians through three separate parliaments, including the Labor government prior to the 2013 election. So let me say to Senator Cameron: three times, in three separate governments, we have raised this issue. We are nothing if we are not consistent when we are battling for low-income Australians who shouldn't be living on $38.39 a week.
This week the Commonwealth Bank put out their annual results. We know that their chief executive officer, Ian Narev, although he's going to get a small 'haircut', is still going to be paid over $10 million a year. Do you know how much that is every day? It is nearly $30,000 a day. We live in a country where our corporate elite are paid obscene amounts of money and we have low-income, vulnerable Australians who should be supported by a safety net, our social security system—a system that we could afford if we had decent revenue-raising policies in this country—and yet they are struggling to survive on $38 a day.
My party is proud to be a party that constantly strives to achieve outcomes and, to be totally blunt, tries to drag the Labor Party over the line on some of these key policies. I could list a number of policies as long as my arm that we've been proud to achieve in getting Labor over the line on. A royal commission on banking is just one example. We campaigned on that for years. It was called exactly what Senator Cameron called this today: a stunt. So let me say this again: Labor got up and said that our call for a royal commission—a motion we put through the Senate—was a stunt. Would you even know it now? I'm glad that Labor's called for a royal commission. I'm glad that they have joined the chorus for this royal commission into the banking sector. There are so many other policies.
Guess who it was who decided to raise the issue—and it was almost heresy when we raised it—of removing negative gearing and capital gains tax concessions, these perverse incentives that have created not only a housing bubble and systemic financial risks in this country but a housing affordability crisis for so many young Australians and so many low-income Australians who may never get to own their own home. There is this disparity, this inequality, in wealth in this country. It's fine for Senator Reynolds to come in here today and talk about how the HILDA numbers show that income inequality has been static, but she neglected to mention that, for wealth inequality in this country, the charts are horrendous for young Australians. Home ownership in this country has dropped nearly 30 per cent because of perverse government policies that allow mostly older and wealthier Australians to buy multiple homes, at the expense of younger and poorer Australians. It was the Greens who first raised the idea that we need to scrap these investor incentives. And, good, Labor came out eventually and supported that as well, and that's now, I understand, a key policy of theirs.
Taxing trusts as corporations—guess who took that to the last election. The Greens did. That was one of our policies that we'd had in place for some time. And, lo and behold, less than a month ago, Mr Bill Shorten came out and announced that Labor would tax trusts as companies, and we congratulated him. That was great. There's a bit of a trend in what I am saying here that is contrary to what Senator Cameron's come in here and said—that somehow what we do in in place is insignificant and that it's a stunt.
I'd like to pay tribute to Senator Siewert. There are very few senators in this place who work as hard as she does, and this is something she has been an absolutely tireless champion on now for a long period of time. She's a senator, and in her tool box she has the chance to raise this issue in the Senate through a whole range of different things such as motions and referrals to inquiries, and she's introduced again, for the third time in a row, a private senator's bill to help low-income Australians who are suffering and who need our support.
No doubt Senator Williams would raise the question: how do we pay for this? That's a really good question, Senator Williams. How do we pay for this? I believe and my party believes that we can afford to raise the safety net for low-income Australians, for the unemployed—the people we should be looking after. I remember, in the 2013 election, talking to unemployed Tasmanians who were receiving Newstart and talking to single mothers on family payments. In this political debate, there is this cookie cutter approach: if you're unemployed and you've been on Newstart, especially if you are long-term unemployed, somehow it's a character trait or a character fault of yours. With these people I met, all their stories were different and a lot of them were heartbreaking. We have a duty to these people.
Numerous parliamentary inquiries have found that Newstart is too low. So why do we need Senator Cameron's suggestion of another inquiry, another review? We already know it's too low. Thirty-eight dollars and thirty-nine cents a day is not a lot of money to live on. We get paid shiploads—I'll use the 'p' word—more than that in here, don't we, Senator Williams? We get paid a lot more than that. Some people think we're overpaid, and they're entitled to their opinion, but we recognise that $38.39 a day—and that's including the energy supplement—is virtually nothing. It's less than half the minimum wage.
Of those on income support in this country, 36.1 per cent are living below the poverty line, including 55 per cent of people receiving the Newstart allowance. That's a pretty stark and scary statistic. The Australian Greens had a bill back in 2011 and 2012 to increase the single rates for Newstart and independent youth allowance. It did not get supported by Labor, contrary to what Senator Cameron was saying. He was saying that somehow this is a stunt that we have brought up with a government under which—because they control the lower house, the other place—we know this will never get done. We've tried it—we've tried it previously under a Labor government.
We took this policy to the last election, and our platform was fully costed. Now, it's easy to come in here and say that we are a party that's—to use a term Senator Williams often uses—somehow down the bottom of the garden with the fairies. I would like to stand here and say we have some of the best economic policies of all the parties in this place, and we spend an incredible amount of time working with the Parliamentary Budget Office to get everything costed. Our platform, at every election we go to, unlike the other parties, is transparent and fully costed, and that takes an incredible amount of work, trust me. I've been on our committees actually getting this done. We have had this costed, and we know that we can support an increase in payments of $110 a fortnight by doing some pretty simple things.
I recently travelled to Western Australia with the economics committee, and we were looking at the petroleum resource rent tax in this country—a super-profit tax, supposedly—on the economic rents that are earned by the petroleum and oil and gas industry in Australia. These rents are supposed to reflect a fair payment to the Australian people for the resources that we own in the ground that we should sell to multinational companies, some of the biggest and wealthiest oil companies in the world. But what do I find out when I go to this inquiry? We have given them, through our tax system, $238 billion in tax credits. How many Gonski fundings could we fit into that? How many NDIS fundings could we fit into that?
All we're asking for here is an increase of $110 a fortnight for some of the most vulnerable people in our society. I've looked at how these oil companies have been able to accumulate that much deferred tax—tax that could pay for so much—and managed to get away with that. Well, we had said, for these rates, that they can uplift their operating expenditure and their exploration expenditure at 15 per cent plus the bond rate every year. They can compound their tax deferrals by 15 per cent plus the bond rate every year. Imagine getting that kind of return on your investment? That's what we're giving them—15 per cent. If we tweaked that 15 per cent by even half a per cent or 0.1 per cent, we could pay for this. It's ridiculous! Why aren't we taking on some of the biggest and most wealthy oil companies in the world? We're giving away our resources for nothing, when we know we need revenue to pay for things like this. Believe me: it wouldn't take much at all.
What about removing negative gearing and capital gains tax? Labor's come part of the way with a reduction in what they think should be paid on a capital gains tax, if you sell your house and you're an investor. And they have come some of the way to removing negative gearing. But, if we remove the entire lot, we could not only solve a key problem in our housing affordability crisis; we could actually raise another $10 billion to $20 billion of revenue on forward estimates—enough to pay for a small, very modest increase for Australians who need it the most.
What about a diesel fuel rebate?
I bet Australians don't know that the big mining companies—once again, some of the biggest and most profitable corporations on the planet—get nearly $20 billion, on forward estimates, in diesel fuel rebates from the Australian taxpayer. We've never come at taking that away from farmers, Senator Williams, but we do have a problem with the big miners who earn billions of dollars in profit getting taxpayer subsidies. There are so many different things we could do, if we just had the courage and conviction to tackle them, and that's what it takes in this place. If we're actually going to have a functioning, healthy economy and a social safety net that's meaningful, then we've got to start passing a lot more legislation and doing a lot more policy work in this place. It's going to take courage and conviction to fix inequality in this place and make a difference. It is people like my colleague Senator Siewert, who's been in the Senate for many, many years, who every single day comes in as a champion not only for youth allowance and increases to Newstart but for payments to single parents and to first Australians. Senator Siewert deserves a huge pat on the back for the work she's done, and I hope that she succeeds and that this is supported by the next government. I hope that the next government is the Labor Party and not the current Liberal government, and I hope that they do increase Newstart when they get into parliament.
Why aren't we having a mature debate in this country about how we can raise revenue? I understand that there's got to be a balance in the incentives that are needed for businesses to function and stay profitable. If we didn't have businesses making profits, we wouldn't necessarily have the jobs to pay our workers, so I accept that we need both. But I can tell you: my party and I feel very strongly that there is a much bigger role for government to play in our lives.
We had a very interesting matter of public interest on Tuesday this week—only a couple of days ago—about how we could get the economy working for Australians. If we're talking about increasing Newstart, why aren't we also having the bigger discussion about the disruption that's coming to our economy in the form of automation and artificial intelligence and the potential massive retrenchment and unemployment that we're going to see in the future? I watched a Catalyst episode just the other night, and it's not just blue-collar jobs that are being threatened by artificial intelligence and automation; it's white-collar jobs too—paralegals, for example. Someone's just written a computer program, which is being used now by lawyers, that is going to essentially replace paralegals. All you need to do is type in a search and it can achieve the most amazing results. These are the trends that we're going to face in the future if we don't think about a universal basic income and other radical ideas that Senator Siewert and others are saying won't be so radical in the future.
We're going to have to look at a lot more than just paying unemployed Australians Newstart in the future if we're going to see entire industries and potentially millions of people put out of work by the changing nature of our economy. These are the sorts of big questions that we are going to have to tackle and think about. An increase of $110 a fortnight in Newstart payments isn't going to seem like much at all, especially when we consider some of the universal basic income trials that are occurring overseas. These are the big questions that I'm proud to say my party are happy to lead on. We're happy to speak in parliament on these challenges that face our nation, our workers, our companies and our communities. We're not asking for much here at all.
This is particularly a big issue in my home state of Tasmania—a state, may I say, that receives its fair share of GST. Unfortunately, there are no Western Australian senators in the chamber right now. The way the GST is distributed around the country is designed to help the states that are going through harder times. Although, I am proud to say, our economy in Tasmania has been on the mend, we unfortunately do have many Tasmanians who are on the poverty line and are receiving Newstart. When Mr Tony Abbott's cruel, zombie budget came in in 2014, I was handing out brochures in the mall in Launceston, where I live and where my office is. I can tell you that Tasmanians were furious with Mr Tony Abbott for his budget—trying to cut pensions, cutting Newstart, cutting medical payments to the most vulnerable; the list goes on and on and on—because they had trusted his government to look after them.
This brings us back to the point that government must play a very important role in our life if we're going to tackle the economic challenges of our time. Senator Milne, in her time here, for many years worked with Senator Siewert and always stood up in this place and said that inequality is the great challenge of our time. I am glad that it took Mr Shorten one speech to get it on the short-term political radar, and I hope it stays on the political radar for some time, because it absolutely is something that this parliament needs to debate. But if we're not going to tackle giving the most vulnerable Australians a very, very small increase in their Newstart allowance, and we're not going to tackle executive pay rorts in this country or even our Public Service salaries, then we're always going to have income inequality.
We are not asking for much—especially when we know that, if we had some political courage in the Senate, in this place, and next door, we could actually raise the revenue that we need to have a fairer and more equal society. And what is the problem with inequality? I can tell you that, when you look all around the world at the political backlash that we're seeing in America, in Europe and in Brexit in the UK, what they all have in common is inequality. People have given up on trusting their parliamentarians and their institutions to tackle these big issues. We're not asking much here today. This is not a stunt. This is a long, long road that Senator Siewert and the Greens have been walking down, making sure that this issue stays on the political agenda, is heard by the decision-makers and is tackled by parliamentarians, who have a unique opportunity to make a difference to low-income Australians.
The question is that the bill be now read a second time. As a division is required, pursuant to orders of the Senate, that division will become an order of the day for the next day of sitting.