Thursday, 20 September 2012
That the Senate—
(a) notes that:
(i) today, due to the differences in the types of indexation, pensions will go up by $17.10 while allowances will only increase by $2.90, and
(ii) indexation against the consumer price index alone keeps Newstart so low it cannot adequately meet the true increases in the cost of living; and
(b) urges the Government to take immediate steps to appropriately index Newstart at the same rate as the pension to prevent an ever-widening gap.
Newstart allowance provides a financial safety net for Australians while they seek to re-enter the labour market. It is indexed by the CPI. Unlike Newstart allowance, pensions are designed for those who are not expected to or have little or no ongoing capacity to support themselves through employment due to factors such as age, illness or disability.
The Senate Standing Committee on Education, Employment and Workplace Relations is currently conducting an inquiry into the adequacy of the allowance payments system, including the Newstart allowance. The committee is due to table its report on 29 November. The government has publicly stated that it would listen to the findings of the Senate committee with an open mind. This will be done in the context of fiscal responsibility and the budget's bottom line.
Of those people living on Newstart, 62 per cent have been on it for longer than 12 months. Therefore, it puts paid to the argument that it is a short-term payment. I lived on Newstart for a week in April. I bought a basket of goods. I repriced that basket of goods—exactly the same basket in exactly the same shop—last Saturday and the price of goods had gone up $7.38. That is far above the $1.45 per week indexation that kicks in today to those living on Newstart. Clearly the indexation currently available for Newstart does not match the real cost of living to those trying to survive Newstart, of which 62 per cent are trying to do it for over 12 months. There is clearly a need for action right now, because those living on pensions are getting $17.10—rightly so. Why aren't those living on Newstart, who have virtually exactly the same cost of living? (Time expired)