Monday, 10 September 2018
Social Services Legislation Amendment (Ending the Poverty Trap) Bill 2018; Second Reading
I table an explanatory memorandum relating to the bill and move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
This Bill will provide additional financial assistance to single recipients of the maximum basic rate of Newstart Allowance, Austudy, Sickness Allowance, Special Benefit, Widow Allowance and Crisis Payment in the amount of $75 a week. The Bill will provide additional financial assistance to single recipients of the maximum basic, "away from home" rates of Youth Allowance in the amount of $75 a week.
Newstart Allowance, Sickness Allowance and Widow Allowance are paid at the same rates but with different eligibility requirements. The rates of Special Benefit and Crisis Payment are calculated with reference to the rates of Newstart, Austudy or Youth Allowance payments. As the Bill raises the rates of these three payments, the increase will be reflected in the maximum rates for Crisis Payment and Special Benefit.
The Bill ensures the additional financial assistance will be paid to people who receive the Jobseeker Payment once the relevant Social Services Legislation (Welfare Reform) Act 2018 provisions commence.
The increase to these payments is to assist in alleviating poverty, reducing income inequality and, where appropriate, to help people to more effectively access study and employment.
The intention is for ABSTUDY to be increased in the amount of $75 a week. However, this payment is based in policy, rather than legislation. For the intention to be realised, the Government would need to increase this payment.
The Bill will also change the indexation arrangements for these payments and other income support payments so they align with the indexation arrangements of the pension to being the higher of CPI (Consumer Price Index) or pensioner and beneficiary living cost index amount (PBLCI).
In a wealthy country like Australia, no one should be left behind. All of us should be free to live a good life with access to socials services – regardless of our postcode, parents or bank balance.
A socially just, democratic and sustainable society rests on the provision of a guaranteed adequate income for all people to allow them to fully participate in society. Without an adequate income or sufficient wealth, people are left behind.
The income support payments this Bill seeks to increase are inadequate and recipients of these payments often face difficulties in being able to fully participate in society and cover basic living costs, including necessities such as housing, food, transport, healthcare and utilities, and are often excluded from social activities due to their prohibitive costs. People on income support are skipping meals, going without medication and avoiding using their heater because they cannot pay their bills or their rent.
When the ability of individuals to reach a socially acceptable living standard and to participate in society is hindered, our society suffers and division is felt. Inequality creates significant negative effects on individuals' physical and mental wellbeing, societal cohesion and stability, and economic growth and productivity.
ACOSS and the University of New South Wales recently released their Inequality in Australia 2018 report. This report highlighted that those living on Newstart have very limited incomes. Specifically, it found that 63 percent of Newstart recipient households are in the lowest 5 percent of incomes.
The report also found, with regard to income inequality, that someone in the top 1 percent of the income scale earns more in a fortnight than someone in the lowest 5 percent earns in a year.
A strong social safety net is a key part of addressing income inequality. It ensures that when people fall on hard times there are supports in place to help them when they need it most.
A strong social safety net is also the foundation of a more inclusive and productive society.
Allowance payments need to be increased as a matter of urgency as people receiving unemployment and student payments have the highest rates of poverty.
The ACOSS report Poverty in Australia 2016 found that there are 2.99 million people (13.3 percent of the population) living below the poverty line in Australia, after taking account of their housing costs. 731,300 of these are children. Of those on income support, 36.1 percent are living below the poverty line, including 55 percent of people receiving Newstart Allowance. Furthermore, single people generally face a significantly higher risk of poverty than couples (24.6 percent to 10.1 percent) while 33.2 percent of single parent families are living in poverty compared with 11.3 percent of couples with children.
The Salvation Army's National Economic and Social Impact Survey 2018 reported that after paying for accommodation, Newstart recipients were left with only $17 a day to cover their other expenses.
95 percent of the 1,267 respondents to the survey were relying on income support as their primary source of income and the same percentage of households were under the poverty line.
The University of New South Wales report, released in 2017, New Minimum Income for Healthy Living Budget Standards for Low-Paid and Unemployed Australians found that the long-term decline in the adequacy of income support payments is a major policy failure that needs to be addressed.
This report, which builds on previous Australian and recent international research to develop a set of budget standards for low-paid and unemployed Australians and their families, outlined just how far Newstart is falling behind. The report found for those out of work and reliant on Newstart, the safety net provisions fall short of budget standards estimates by $96 a week for a single person.
In the last week, the National Sustainable Development Council with the Monash Sustainable Development Institute published the Transforming Australia: SDG Progress Report, which outlines our progress towards meeting the United Nations Sustainable Development Goals by 2030.
This report found that of our income support payments, only the pension is currently keeping up with the poverty line.
It found people on Newstart, who would have been on the poverty line in 2000, were 20 percent below the poverty line by 2014. Single recipients of the payment without dependents were worse off, being more than 25 percent below the poverty line by 2014. The report attributes the difference between the pension and Newstart, as well as other allowances, mostly to indexation rules, which this Bill seeks to rectify.
Poverty undermines access to education and training, and educational outcomes are directly correlated with socio-economic status. Poverty limits access to safe, secure and appropriate housing, transport, employment outcomes, childcare and many other aspects of full participation in society. Poverty is a daily challenge for many Australians, undermining their ability to have meaningful and productive lives.
Poverty has a devastating impact on children and their wellbeing. Children and young people deprived of food, clothes and other materials have reduced engagement with school, sometimes due to hunger, shame or being excluded or marginalised. It impacts children's development, education and eventually employment opportunities.
No one in a country as rich as Australia should be living in poverty.
We know that the largest risk factor to living in poverty is unemployment and accessing the social safety net.
This is unacceptable. Our social safety net should provide those unable to find paid work with a liveable income until they find employment. This is particularly important when finding paid work is difficult for many and poverty is a barrier to finding work. The Government should not be adding to this stress by making it impossible for these individuals to afford housing, food, transport and healthcare, among other things.
We need visionary policy to overcome the underlying drivers of poverty, such as secure, affordable housing, access to education and employment, and we need to ensure we have a strong social safety net, that properly supports people.
Increasing Newstart and related payments and amending the indexation arrangements will reduce poverty for hundreds of thousands of people across Australia.
The money spent increasing these payments will also go straight back into the economy on much needed goods and services.
This Government, however, has focused its efforts on hacking away at our country's social safety net. It has deliberately and maliciously propagated myths and is demonising those accessing income support, without any compassion or understanding of the reality of living below the poverty line.
The Government just keeps spouting the same old tired line about the best form of welfare being a job, refusing to acknowledge that poverty is itself a barrier to employment and that there are not enough jobs out there.
Anglicare Australia's Jobs Availability Snapshot 2017 reinforces this point. It pulls together the figures from three Government indicators from May 2017, and shows that for every level 5, or entry-level position, that was available in May 2017, there were 4.8 disadvantaged jobseekers. The snapshot is invaluable in busting open the Government's perpetuated myth that job seekers can get a job if they just try harder. It does not end there, though. The figure actually worsens when you look at the state and territory breakdowns. The ratio of disadvantaged jobseekers to entry-level vacancies was 10.7 in Tasmania, 7.5 in South Australia and 6.9 in Western Australia.
Indeed, the growing casualisation of the workforce presents a further barrier to these people finding suitable and secure work. The Government continues to brand those who rely on Newstart and cannot find a job as 'dole bludgers' and lazy. However, this could not be further from the truth. This data demonstrates that at the entry-level, there simply aren't enough jobs to go around.
51 percent of respondents to the Salvation Army's National Economic and Social Impact Survey 2018 recorded finding employment or getting into education and training was their greatest challenge on a day-to-day basis.
Housing presents another difficulty for those on income support. The number of affordable and appropriate rental properties available for those on low incomes remains strikingly low. Anglicare Australia's 2018 Rental Affordability Snapshot revealed that of the 67 365 properties listed for rent on 24 March 2018, only 6 percent or 3 729 properties were affordable and appropriate for all households on income support payments. For single Newstart or Youth Allowance recipients it was even worse, with only three properties in the entire country classed as affordable and suitable. The report uses the nationally accepted benchmark of affordability meaning rent cannot exceed 30 percent of a household budget. The report makes the point that people on low incomes have to compete for affordable housing not just with each other, but with those on higher incomes trying to minimise their housing costs. We know that this massive lack of affordable housing has come about due to a distorted system of tax concessions and a chronic lack of investment in affordable and social housing. It has resulted in those receiving income support and those on low incomes generally having to go without life's essentials in order to pay their rent on time and avoid homelessness. The report details how many of these people are living on the edge, approaching Anglicare agencies for help and support. This should not be happening in a country as wealthy as ours; we can and should do better.
Many students are also struggling. They face high rental prices and insecure work, and have recently had their penalty rates cut. The 2017 Universities Australia Student Finances Survey, released in August 2018, only reinforces this point. It reported that one in seven domestic university students are regularly going without food or other necessities because they do not have enough money and that three in five indicated that their financial situation is often a source of worry. A third of domestic undergraduate students are receiving Youth Allowance, Austudy or ABSTUDY. This figure increases when looking at the numbers of low socioeconomic (42 percent), regional (45 percent) and Aboriginal and Torres Strait Islander undergraduate students (49 percent). The number of Aboriginal and Torres Strait Islander students reporting they are regularly going without food or other necessities was more than one in four, and the numbers of low socioeconomic students and regional students worried about their finances were higher too, being 63 percent and 64 percent respectively.
The call for an increase in the base rate of allowance payments has received widespread support from not only social services organisations but also from business groups, unions, academics and various economists. Even former Prime Minister John Howard has come out saying he thought the freeze has probably gone on too long.
For decades, Liberal and Labor governments have attacked our social safety net and ignored the plight of those trying to survive on Newstart and other payments.
The Government have given massive tax handouts to the wealthy, their big corporate mates and donors and let them get away with not paying their fair share of tax instead of investing in the public services that we all need.
The time to raise the rate of allowance payments has well and truly come. The evidence shows that.
I ask the Parliament to support this Bill and those receiving these allowance payments to assist in alleviating poverty, reducing income inequality and, where appropriate, to help individuals more effectively access study and employment.
I seek leave to continue my remarks later.
Leave granted; debate adjourned.