Wednesday, 6 September 2017
Statements by Senators
Pensions and Benefits
Today I would like to speak about this country's shamefully low Newstart and youth allowance rates. Not long ago, in fact in the last sitting, I was speaking on this matter, on the bill I brought to this place—the bill to increase Newstart and youth allowance. It would have increased the woefully low Newstart and youth allowance payments by $110 a fortnight. That would make a huge difference to families and children living in poverty. The chamber rejected the bill. The government just said no outright. The Labor Party is saying, 'We need a review first.'
We do not need further evidence to show how low Newstart is, and I said that at the time, but just so that I can convince the chamber even more that Newstart is too low and to convince senators to change their minds, I will outline the latest findings of the University of New South Wales in their recently released report, New minimum income for healthy living budget standards for low paid and unemployed Australians. It is a bit of a mouthful, but bear with me, as there are some very important facts in this report. This report found that the long-term decline in the adequacy of income support payments is a major policy failure that needs to be addressed. The Newstart allowance hasn't materially changed—other than with the CPI—in the past two decades, despite considerable changes and increases in the cost of living. A single person receiving the Newstart allowance lives on $38 a day.
This report builds on previous Australian and recent international research to develop a set of budget standards for low-paid and unemployed Australians and their families. The family types included are a single person—male and female—couples without children, couples with one and two children, and a sole parent with one child. The approach incorporates existing community norms, expert judgement and relevant evidence from social surveys and gives emphasis to the views expressed by the low-paid and unemployed individuals in focus groups to ensure that the standards are grounded in everyday experience and reflect real needs. This research looked at real families to collect real data on how they manage their household budgets.
I will detail the main findings of the report. New weekly low-paid budget standards varied from $597 for a single adult to $1,173 for a couple with two children, specifically a six-year-old girl and 10-year-old boy. The corresponding budgets for unemployed families varied from $434 for a single adult to $940 for a couple with two children. For low-income couple families, the costs of the first and second children were around $137 and $203 a week respectively. For similar unemployed families, the corresponding costs were $106 and $174 a week respectively. The combined cost of the two children was around $340 a week or $170 per child for low-paid families, and $280 or $140 per child for unemployed families. The budget standards for low-paid families were between 22 per cent and 47 per cent above a poverty line set at 50 per cent of the median income, while those for unemployed families were very close to the poverty line, except for the sole parent family. Existing social safety net provisions as of June 2016 provided an adequate income for the low-paid single adults receiving the minimum wage and working full-time, but not for those with a partner or children.
Specifically for those out of work reliant on the Newstart allowance, the safety net provisions fell short of the budget standards, estimated at $96 a week for a single person, $58 a week for a couple with one child and $126 a week for a couple with two children. Here's your evidence, folks. This is the evidence that shows, once again, how low Newstart and youth allowance payments are. Newstart payments and youth allowance do not come close to covering household budgets. Our income support system is stagnant and has utterly failed to keep up with the cost of living and the modern work environment. A recipient of Newstart currently receives a mere 38.54 per cent of the current minimum wage, which continues to fall short of providing the required necessities of living.
To rent a home in 1990 would, on average, have cost 27 per cent of an individual's weekly income. However, currently Australians spend over a third of their income on rent, on average. To not compensate jobseekers for these extra costs of living leaves today's Newstart recipient in a worse relative financial position than they were in during the 1990s, putting paid to the government's ridiculous, concocted argument that people are better off than they used to be on the Newstart allowance. It is frankly astonishing that the Newstart allowance has not changed in all that time. It is simply meanness by this government and previous governments—all governments—during the time when it has been very evident that the Newstart allowance has not kept up with the cost of living, putting people further and further below the poverty line. Bear in mind that the evidence shows poverty is a barrier to finding work.
We must commit to real action to alleviate poverty in Australia. Part of that is addressing the appallingly low income support payments. To remedy the situation, the long overdue report New minimum income for healthy living budget standards for low-paid and unemployed Australians recommends the implementation of a regular independent review to assess the adequacy of social security payments—in particular, the Newstart payment, which would be modelled upon the current minimum wage system of review. We need to look at the evidence. We need to increase Newstart and we need to put in place a new approach to setting not just Newstart allowance but other income support allowances. If we don't do this we will continue to see Newstart allowance and youth allowance get further and further behind.
An independent panel would ensure that payments across the board are fair and adequate to meet the needs of people who are receiving and having to depend on income support. We need to take it out of the hands of politicians in this place so that the government of the day does not decide yet again to try to demonise those who are trying to find work—when you remember that for every six people who are looking for work where there are some skills required there is only one job; for people who have a lower skill level, it can get up to one in 10, depending on the area in which you live. So it is not people's fault that they're unemployed. The fact is that there are no jobs there. We are condemning people who cannot find work to live in poverty because the government simply will not recognise that Newstart is too low to assist people and help them have a standard of living that is considered even halfway decent.
I say to Labor: please, please commit to increasing Newstart. Don't just say that we need another review, when there's consensus across the board. The Business Council, community service organisations, such as ACOSS, and a wide range of others all acknowledge that the Newstart allowance and youth allowance are too low. They recognise that living in poverty on Newstart allowance, on very low income, has physical and mental health implications and is a barrier to finding work. If this government is genuine about helping people to find work, they should increase the Newstart allowance. How much more evidence do you need? It is right there. For years it has been right there, and this latest report from the University of New South Wales shows very clearly the need to increase it. It shows how far below budget standards it is and points the way for a much fairer approach to the way we set those allowances. Have an independent approach. Commit to an independent approach to make sure that people are no longer struggling, living below the poverty line on a totally inadequate, inhumane payment.