Tuesday, 12 May 2020
Matters of Public Importance
Pensions and Benefits
I inform the Senate that, at 8.30 am today, eight proposals were received in accordance with standing order 75. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate the following letter has been received from Senator Steele-John:
Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:
The new rate of Jobseeker Payment and Youth Allowance should be retained so that no one lives in poverty and we continue to stimulate the economy.
Is the proposal supported?
More than the number of senators required by the standing orders having risen in their places—
I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.
I rise to kick off the debate on this very important issue. The fact is that nobody in our community should be living in poverty. The fact is that no-one on income support should be condemned to live in poverty. But the terrible fact is that many, many people are living in poverty in this country, particularly those who were trying to survive on the former rate of the old Newstart payment—now jobseeker—of just $40 a day. The government knows that the old jobseeker/Newstart rate is below the poverty line. The fact that they moved so quickly—and, as I have already articulated, we were strongly supportive of them moving quickly—to double the jobseeker rate shows very clearly that they knew that people cannot survive on $40 a day, which was the old rate of Newstart. If jobseeker drops below $40 a day—or, with the energy supplement, less than $41 a day—at the end of September, the government will most likely be condemning over a million Australians—who will still be unable to find work due to no fault of their own, as the government pointed out earlier—to live in poverty.
I can tell you now that $40 a day does not provide an adequate standard of living, but you don't just have to take it from me. Take it from the hundreds of people who submitted to the Senate inquiry into the adequacy of Newstart, the report of which was tabled on 30 April. They told us about the daily dilemmas of how to cover the basic costs of essentials, despite rigorous and careful budgeting. The new rate of jobseeker with the supplement being paid, at $557 a week, is well below the average minimum wage of $740 a week. Even with the supplement, Anglicare found through their annual survey of rental affordability that only 1.5 per cent of properties were affordable for someone on jobseeker. This demonstrates that the new rate of payment will not act as a disincentive to work, but it will help keep people not living in poverty. In contrast, it will allow people to better meet the daily costs of living while looking for work.
How is the government going to manage the social and economic costs of poverty come September? When government MPs start to talk about budget constraints around jobseeker, they fail to take into account the devastating costs of poverty. Those people who, during the Senate inquiry, very bravely gave us their accounts of what it was like to live on the old Newstart rate told us of going hungry, of skipping meals—particularly parents skipping meals so they could feed their children. People couldn't pay for their medications. Some were on multiple medications, so, even with the healthcare card and the lower rates of payment for medications, people were still skipping taking their medications because they couldn't afford them. They couldn't afford to keep the heating on during winter. They talked of sitting with blankets around them, going to bed early and turning off the lights. You can't cover rent or mortgage payments when trying to survive on $40 a day. It is, quite frankly, impossible. You do not and cannot look after your mental and physical wellbeing. You can't address your mental health issues when you're surviving on $40 a day. The more it continues, the more poverty becomes a barrier to work. Poverty, of course, is one of the social determinants of health. Increased rates of poverty in Australia mean more people are relying on charities for support. It means more pressure on our health systems. More and more people will be stuck on income support long term.
Previous modelling undertaken by NATSEM found that, if Australia adopted the World Health Organization's recommendations to tackle the social determinants of health, it could potentially support extra Australians into work. The modelling was done some time ago, so the figures will be higher now, but at the time the estimate was that 170,000 Australians could be supported into work, which could save $4 billion each year in income support, see around 60,000 fewer Australians admitted to hospital annually and result in 5.5 million fewer Medicare services each year. So, if people are not living in poverty, not only does it help their own wellbeing but it helps the wellbeing of the nation.
Retaining the rate of jobseeker and youth allowance will not only stop the devastating impacts of poverty but also help stimulate the economy. In 2018, Deloitte Access Economics found that raising Newstart by $75 a week would help stimulate the economy by $3.3 billion in consumer spending. It would also create 12,000 jobs, and those jobs would particularly help regional Australia. Lower- and middle-income households are likely to spend every cent of the extra money they receive, especially if they have been living on $40 a day. That supplement is being spent and is very much appreciated. The $750 coronavirus cash payments to households and the supplements have had a significant stimulus effect. We've already seen the uptick in consumer spending just with the payment of the $750. We know that when you're on a low income you spend the money, and that stimulates the economy. The ANU Centre for Social Research and Methods recently found that, due to the coronavirus stimulus payments, those on low incomes are less likely to be finding it difficult or very difficult to cope on their incomes.
We saw the benefits of the stimulus package, as I said, in the uptick in consumer spending. It's not surprising that increases in income support help boost the economy and consumer confidence. Many Australians have little to no savings and struggle to pay bills and rent. Last year, Deloitte found that half of Australia's people don't have any emergency funds to fall back on in a personal financial crisis.
Today, the Minister for Finance said that the economic stimulus introduced by the government not only has financial benefits but also provides a psychological boost, an economic lifeline, to people in their hour of need. Well, the hour of need is going to continue after September. It is not suddenly going to just bloom roses for everybody. Unfortunately, not all of the people who have become unemployed are going to be able to find work, come 25 September. The reality is that people are still going to need payments to survive on. They're going to need a decent and fair social security safety net, just as the Treasurer and Senator Cormann, the Minister for Finance, pointed out today—that our social safety net needs to be underpinned by decency and fairness. Dropping people onto $40 a day, come 25 September, is not decent; it is grossly unfair.
Inadequate rates of income support payments have harmful effects on people's physical and mental health. Therefore, dropping people onto an unfair payment would have devastating and harmful impacts on people's physical and mental health. It was only last week that new modelling demonstrated, unfortunately, Australians' poor mental health and raised very deep concerns about the potential suicide rate in this country. We need to be making sure we are looking after people's wellbeing—that we're looking after people's mental wellbeing. The impact of dropping people onto very unfair payments of $40 a day will have devastating impacts on people's physical and mental wellbeing.
If the government is serious about doing whatever it takes to stimulate the economy and doing whatever it takes to protect people from the devastating impacts of a recession, they simply must retain the rate of jobseeker payment and youth allowance and create a decent and fair social safety net for this country, which includes making sure people are no longer condemned to live in poverty on income support.
Let's be very clear: the use of this current crisis, with its unprecedented health and economic challenges, should not be an opportunity for the Greens to propose irresponsible acts of economic vandalism. The federal government takes its responsibility to the taxpayer seriously. They expect us to use their funds sensibly and we're working hard to provide new ways to stimulate the economy, not through higher taxes or via a living wage but by getting people back to work. Our approach remains that we will invest in our economy in ways that will stimulate jobs for Australians. Whilst we have also funded a short-term lifeline to those workers that have been stood down, we will not be bankrupting our country with a welfare-for-all approach. We already have reports of workers rejecting opportunities to work casual shifts, because, in some cases, jobseeker payments are more lucrative.
So, in response to the reckless calls for a living wage, I would say this: our country has weathered the COVID-19 storm better than any other affected nation. We have achieved that by applying careful, deliberate and sensible measures to the health crisis, and we are approaching the re-ignition of our economy with the same principles. We will ensure that we experience a similarly measured and steady economic recovery. And we're not forgetting those in need. About one-third of the Commonwealth budget is spent on welfare. Accordingly, government has a responsibility to taxpayers to ensure that welfare is targeted and sustainable. Our approach to social welfare in Australia has been far from cavalier. Few countries have provided the strong safety net that we enjoy and Australia has one of the most targeted welfare systems in the world. It has been caring and focused on those who need it most. Jobseeker and youth allowance payments are taxpayer funded and they provide a safety net for people while they search for a job. Unlike in other countries, they're not linked to the recipient's contributions. They're increased twice a year every year, in line with CPI.
The jobseeker payment is a temporary, transitional support, with close to two-thirds of recipients expected to exit the payment system within a year. Almost every Australian who receives the jobseeker payment also receives supplementary payments on top of the base rate. Supplementary payments ensure that our system is targeted to those most in need. So, if you have specific circumstances that require extra support, then that's available. For example, if you have children, you'll likely receive family tax benefits, both A and B. The government also provides rent assistance, which is paid at up to $185 a fortnight, to help cover the costs of housing. Additionally, there's also the energy supplement, utility allowance, telephone allowance, carer allowance—and the list goes on. So, it's important to note that the jobseeker payment is not the only payment or support that job seekers receive. It's part of a broader, flexible social security system, comprising payments, services, concessions, child care, housing and employment services and associated programs.
The Morrison-led government is also supercharging our safety net to provide additional support to Australians throughout this extraordinary period—for those Australians doing it tough. We have instituted temporary measures to support individuals, families and businesses affected by the coronavirus. Those measures will also serve to boost confidence and domestic demand within our economy. Further help includes a coronavirus supplement of $550 per fortnight, two $750 economic support payments to existing payment recipients and concession card holders, expanding eligibility for and qualification for payments, making crisis payments available for people who need to self-isolate at home, and a reduction in the partner income test taper rate. These temporary measures will be in place until September this year. The safety net provided for the most vulnerable among us is particularly important and it is why the system must remain robust.
Clearly, social security and welfare expenditure are a large and important component of Commonwealth spending. Changes to the policy settings will only be carefully considered with regard to budget sustainability. The Morrison government is focused on growing the economy; getting more people into work; and delivering well-targeted social security, funded through a strong budget. That's why we've acted to support households and businesses and to address the significant economic consequences of the coronavirus. Our economic response totals $320 billion over the next four years to 2023-24 and will protect the economy by maintaining confidence, supporting investment and keeping people in jobs.
There has been no change in the government's view about the broader role of Australia's social security safety net. It should be remembered that, prior to the coronavirus crisis, we saw the proportion of working-age Australians reliant on welfare payments down to their lowest levels in more than 30 years, at just 13.5 per cent. Unemployment was down to 5.1 per cent, with more than 1.5 million jobs created. This is clear evidence that our welfare strategy net, coupled with our economic strategy, works. Evidence brought forward by the Productivity Commission has clearly shown that jobless households are among those most at risk of poverty. It should be noted that helping people out of poverty is a complex challenge, which is why the government has to be willing to try new initiatives and remove the barriers to work, and tackle disadvantage and intergenerational welfare dependence. This includes initiatives such as the $96 million Try, Test and Learn Fund, which embraces new ways to assist groups of people at risk of long-term welfare dependence. Those groups include young parents, students, at-risk youth, carers, working-age migrants and the older unemployed. It's a complex strategy to address groups at risk of long-term welfare dependence.
That's why the best thing the government can do for all Australians is to focus on investment to support businesses reopening and workers returning to their jobs. We have a mountain to climb on the other side of the coronavirus crisis, but we have a proven track record to achieve our goal of seeing Australia's economy recover. A crucial component of that recovery is a strong social security system. There will be more challenges ahead, and some industries will recover more quickly than others. We recognise that further assistance may be required. It's why government policy is informed through a variety of inputs, including the data collected by organisations such as the Australian Bureau of Statistics, the Department of Social Services, Services Australia and the Productivity Commission.
In responding, I think it's appropriate at this time to quote the member for Fenner, who in 2016 remarked on our welfare system. He wrote:
Quiz time. Of the roughly 200 nations in the world, which country's welfare state is best targeted to those in need?
If you answered 'Australia', then you're absolutely correct.
… Australia really does have a world-class social safety net.
… … …
Put simply, a dollar spent in the Australian social security system does more to reduce inequality than a dollar spent in any other welfare system in the world.
In conclusion, the Morrison government has no intention of throwing away Australia's economic recovery on a welfare-for-all approach. We will continue to demonstrate fiscal discipline, while adopting only those evidence based policies that will ensure our wonderful nation's speedy economic recovery.
I rise to speak on today's matter of public importance. Due to the COVID-19 pandemic, we're seeing an unprecedented number of Australians on the jobseeker payment. Many of those people have never been on a government payment previously. People now find themselves on the jobseeker payment through no fault of their own. Thousands have had their hours slashed or their jobs cut. The government made the decision to provide an additional coronavirus supplement of $550 on top of eligible income support payments. It was quite clear, long before COVID-19, that the rate of the jobseeker payment was inadequate. The government's actions are an admission of that. It should not have required a pandemic for the government to realise that an economy and society organised on the principle of 'we're all in this together' is preferable to the attitude of letting the economy decide. It's what we from the Labor Party say every time we're in this chamber. I hope the government will heed the warnings from other jurisdictions—double-digit unemployment and massive drops in GDP—before they make any rash decisions.
Australia has been so successful because we've listened to experts and we've worked together across the economy—workers, employers and unions. But we've heard disappointing and disparaging noises, even from the government, about the rate of JobKeeper and jobseeker. The idea that you could have a six-month program and then just end it abruptly is ridiculous. In fact, it's economically reckless. You can't immediately snap back the payments to half of what they are now. As I stated, the government increased jobseeker payment because they knew it wasn't fair dinkum—that people just couldn't survive on $40 a day. What Labor say is that the coronavirus supplement should be phased out over time and that, when it is, we need to lock in permanent and livable increases to the jobseeker payment.
Some 1.3 million Australians are currently on jobseeker, and it is expected that, by September, another 400,000 Australians will require jobseeker payment. The high rate of jobseeker has actually kept some small businesses in Tasmania, my home state, open during this troubling time, as customers are able to shop at the businesses that they supported when they were still employed. To just snap back the jobseeker payment to the old rate is going to cause extreme hardship for hundreds of thousands of Australians, causing them to miss their rent or mortgage repayments, and making them unable to afford the basics and support local stores, and unable to afford to look for work either.
The Senate Community Affairs References Committee, of which I'm a member, recently tabled the report on its inquiry into the adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia. It made a total of 27 recommendations to improve the level of income support. One of the recommendations in the report says:
The committee recommends that once the Coronavirus Supplement is phased out, the Australian Government increase the JobSeeker Payment, Youth Allowance and Parenting Payment rates to ensure that all eligible recipients do not live in poverty.
Snapping back the payment to its old rate will be the equivalent of removing $1 billion per fortnight from the Australian economy, and those on the other side need to think about that.
Labor has taken a constructive approach throughout these testing times. We've advocated for those who have been left behind, whether they be casuals and labour hire workers, small businesses, visa holders or those in the arts and entertainment sector. Indeed, the government has taken up many of our proposals, including wage subsidies; better income tests for working families; support for students; telehealth and mental health provision; support for tenants; and an increase in testing. But many Australians are still hurting. It has been a terrible time for those Australians who have lost loved ones, and I pass on my condolences to all of them. It's been really tough for those who have lost their jobs. Our essential workers have shown what heroes they are, each and every one of them, to keep food on our shelves, our hospitals staffed, medicines in our pharmacies and our hospitals running. I thank these workers for their amazing efforts.
But, unfortunately, I fear this government will use the COVID-19 outbreak as an excuse to implement their tired right-wing agenda. They may talk the talk of all being in this together, but they're firmly on the side of their big business mates. Do not be fooled. They want to snap back to the industrial relations policy of Work Choices as well. They want to snap back to a time when workers had no security and no rights at work. It's completely the wrong approach for our country. The end result will be double-digit unemployment, businesses folding and mortgages going into default.
Let me start by reassuring the Australian people that One Nation has a very strong understanding of the pressures faced by almost a million unemployed throughout the country right this minute. It frightens me to hear that earlier today the government announced that they are bracing for up to 1.4 million unemployed because of this Chinese pandemic. There is a genuine need to use every mechanism possible to avoid people losing their homes and personal possessions, and that's why Senator Roberts and I have backed the Morrison government's emergency measures to safeguard jobs through the JobKeeper program and equally support the additional payment to those jobseekers who have either lost or will lose their incomes. But unemployment benefits are not a permanent stimulus package or measure, which is exactly what the Greens are proposing in this matter of public importance. While I agree that the ordinary Newstart payment should incur an increase of $75 a week, it should also provoke a limit to the time for which people can receive unemployment benefits. It's already unacceptable that this government allows 2.2 million foreign workers into this country to take Australian jobs, while our unemployment numbers skyrocket.
On 27 April this year, we recorded approximately 727,000 unemployed Australians on Newstart allowance, each receiving approximately $282 a week in social security benefits. In light of the coronavirus, this parliament doubled the unemployment payment regardless of whether a person had been jobless for a week or their entire working life. What the Greens are proposing here today is that we permanently double unemployment benefits without a care in the world about how we are going to pay for it. This is socialism at its best. If it's good enough for the Greens and Labor and the coalition to kick farmers off the farm household allowance after four years, why can't we kick the long-term unemployed off Newstart? I'm not suggesting we do this to people over the age of 50, but I am suggesting that we do it to fit and able Australians who think they can live a lifestyle off the back of hardworking Australians.
Mark my words: if you go ahead and permanently double the Newstart allowance, it will only lead to an increase in taxes. There is no other way of paying for it. These are uncosted increases that will only bankrupt this nation and create intergenerational dole bludgers. Before the coronavirus hit Australia, this government shelled out more than $180 billion in social security and welfare a year. That's more than one-third of all government revenue. As the fiscally responsible party in this parliament, One Nation will not support the Greens.
I rise to speak on this MPI brought before the chamber by Senator Steele-John, and I do so as the nation begins this long road to economic recovery. Due to the efforts of the Australian community and the way they have heeded the advice of medical experts, we're able to commence this journey well ahead of many of our international counterparts. Now is not the time for politics as usual; it is the time for the team approach which has underpinned our response so far. Our focus now is on ensuring Australia is reopened as soon as possible and on getting Australians back into work. Despite these events, our plan for Australia has not wavered. We will continue to implement our growth-enabling, job-creating agenda.
It remains the case that Australia has one of the strongest and most targeted social welfare safety nets in the world. It has served us well. In doing so now, it is critical at this amazing time of need. But this safety net should not come at the expense of people finding a job, which is what would happen if what Senator Steele-John is proposing were to occur. Those who need support the most receive it. The additional payment of $550 per fortnight is appropriate recognition of the economic shock which has impacted Australian households. As this shock will ultimately be temporary, the payment itself should also be temporary.
The coming months and years will call for greater fiscal responsibility and economic management, and this is what we will deliver. Those same policies which have put us in the position to weather the crisis will also serve Australia well in the recovery phase. We must continue to stay the course. We will continue to stick to the plan. The Treasurer, quite rightly, said this morning in his ministerial statement that there is no money tree. What we borrow today, we must repay tomorrow. Despite this, the Greens continue to come into this place and endorse a reckless policy agenda—an agenda which would mean Australia continues to borrow, an agenda which would tie future generations of Australians to the debt burden the Greens socialist utopia would create. And we all know how those on the other side like to play and pay for their back-of-the-envelope ideas, all of which result in increased spending and new taxes on hardworking everyday Australians. People would receive less take-home pay under their policies, businesses would pay more tax and the cost of living would increase exponentially, and Australians know this. Growth-enabling, job-creating policies and strong economic management have never been as important as they are today.
The Prime Minister has released a three-stage plan to get Australia reopened as soon as possible. The states and territories are now mapping out what this means for them and they're putting those measures in place. In addition to health considerations, the single most important pillar that underpins these plans is getting people back into work as soon as possible. In my home state of Western Australia, restrictions will start to ease on Monday and will continue to do so incrementally, should we continue to see the good health outcomes that we're seeing. This means that business can start to reopen and Australians can get back to work.
Since we were last in this place, I've spent time speaking to so many businesses in WA who have been impacted by the coronavirus—service focused businesses in particular and those in their supply chains. I've heard some positive stories of innovation and reinvention and I've also heard some stories of those who at this time are not doing so well. But, above all, the message has been very clear. While so many have had to make tough business decisions—indeed, sadly, many have had to close their doors temporarily—the policy agenda of this government has been well received. The JobKeeper payment has been critical in keeping people connected to their employer. Take Alba Edible Oils in WA, for example. They've told me that the JobKeeper payment system has saved at least 17 jobs in their business, and, combined with the cash-flow relief and the instant asset write-off, they are using this time to build their capability for when things reopen.
The JobKeeper payment isn't the only thing there, of course. There's the jobseeker payment and the supplement that goes with it. That is there to assist those who are in the position where maintaining a connection with their employer is not possible. This means that, when we're through to the other side, these Australians will be ready to get back to work, as many of them are already doing. These businesses are able to enter into and maintain, effectively, a hibernation period. This means that more people will be able to transition from the jobseeker payment to paid employment at the appropriate time. The temporary boost to this payment has injected the confidence we need to exit this challenge in the best possible position. It means people can continue to support their families from a position of relative strength, continue to make their rent payments or mortgage payments where possible, continue with their regular purchases, fund household expenses and support local businesses that need it. Without this, the impact on the economy would have been more catastrophic.
We know that, each and every week that the restrictions remain in place, there is a reduction of $4 billion of economic activity. This is the result of lower workforce participation, productivity and consumption. But, from where we are today, GDP can be expected to increase at $9.4 billion per month with the effective implementation of the three-step plan. This would see 850,000 Australians back at work—a direct result of the economic response to this challenge. Further, we know that the unemployment rate would climb to over 15 per cent if Australians are not able to maintain a connection to their employer, and the start to recovery would be much slower than it is under this program. It would mean businesses would need to find people, rehire people and retrain people, and they would lose their investment in human capital and would need to start from square one.
This is why our economic response is critical. Now is not the time for the Greens to come to this place with their standard rhetoric. Every Australian has been impacted by the economic consequences of this challenge in some way. It might be a family member, children, friends or a staff member. We're all familiar and acutely aware of the pressure that this is placing on individuals. We understand the seriousness and consequences of the times that we're in. There will be time for the Greens to come back in here and play their politics, but now is not the time. There will be a time for the Greens to come back in here and air their grievances against every other party in this place, but now is not that time.
This economic package that this government has delivered is unprecedented. At $320 billion, it's a historic investment in our future and represents over 16 per cent of GDP. Now is the time to work together constructively in the national interest. Parliament is, quite appropriately, playing its multipartisan role in assessing the policy agenda of government. This is taking place through the relevant committees, on the things that are related to the coronavirus response, as it has been in this chamber. Now is the time for the Greens to look at the environment we're in, understand it and, importantly, play a constructive role.
The fact we have a strong social safety net is a matter of pride to Australians. There is comfort in times of crisis, whether personal or national, knowing there is a strong and inclusive policy that offers assistance when we fall on hard times. Our social safety net has proven critical to the success of our response to COVID-19. It's hinged on our efforts to reduce the economic barriers and comply with self-isolation and social-distancing rules. What we never want to see is people faced with the impossible choice of staying at home and staying healthy versus going to work just to put food on the table, and yet, still, thousands of Australians are faced with that. This is why Labor called for a wage subsidy from the get-go—a wage subsidy that will keep employees connected to their employers right through to when we come out the other side of this pandemic. For those who, despite the wage subsidy, were unable to hold onto their jobs, a boost to income support has allowed them to make ends meet while social distancing.
The social security response to the COVID-19 pandemic has thrown into stark relief this government's usual handling of anything that relates to our social safety net. With half a million more Australians expected to be accessing support payments by September, the government cannot continue to demonise and punish those forced to seek out the comfort provided by an adequate social safety net. It cannot just expect hundreds of thousands of Australians to just cop being forced onto a cashless debit card to access income support payments—having their money quarantined because they can't be trusted how to spend it. It cannot expect Territorians on income support to just roll over and accept the cashless debit card with no evidence that it does anything but punish recipients.
Thankfully, the Minister for Indigenous Australians pressed pause on breaching CDP participants who did not comply with jobseeker compliance actions. Many providers have been unable to send trainers and staff out bush to conduct face-to-face activities. The minister also said he had put in place arrangements to lift any existing suspensions and penalties for CDP jobseekers, so it goes to show that it can be done. Labor has stood in the Senate, time after time after time, in relation to CDP and those breaching penalties that put people further into poverty, entrenching people into poverty. But we have seen in these last few months just how the government knows it can move, and, when it does move, it does improve the lives of those people who are in our regional and remote Australian communities.
There does not need to be a system that punishes and controls people who, facing hardship, receive income support. What we do need is what Labor has been advocating—a system that actually provides jobs and economic development in remote areas, instead of a system that has failed to do either and really unfairly penalises participants.
The COVID-19 response has also highlighted the difficulties remote community residents face in accessing and affording healthy foods and other goods. With communities in lockdown, the weaknesses in supply chains have been exposed. Ironically, with families now more able to afford to purchase healthy food options, there are actually fewer options available to them. It's not good enough that the government still wants to snap back to its old ways, pursuing policies that punish Australians who are already facing hardship. We cannot afford to revert to the old ways, assigning a value judgement to those receiving income support. This pandemic has been a timely reminder to all of us about the randomness of hardship—how quickly and dramatically personal and business circumstances can change. And, when their circumstances do change, Australians should have peace of mind, knowing there is a strong and adequate social safety net to catch all of us.
We simply cannot allow people to go back to living on $40 a day. We are a wealthy nation, and it is a national shame that we have people living in poverty. People should not be forced to choose between missing a meal or getting a new school uniform.
Before this latest coronavirus increase, the last time government income support was lifted above inflation was 26 years ago. It was 1994, and it was raised by $2.95 a week. Is this really what the government wants to revert to? Everyone has to be supported with a livable income above the poverty line. We shouldn't choose groups that will be left behind.
What the government have shown us is that there is money available to do the things that need doing; they just refused to do them before. There are plenty of ways that we could raise the necessary revenue. We could reverse stages 2 and 3 of the income tax cuts due to start in 2022 that go to the wealthiest Australians. We could end the $7 billion in public funding in subsidies to fossil fuel companies that gets doled out every single year. We could actually make gas companies pay tax and pay royalties for the gas that they currently get for free. We must ensure that everybody has access to the financial support that they need to live and the ability to provide for themselves while they are studying, caring and looking for work.
In addition to supporting Australians through the recession, maintaining the rate will also boost jobs as jobseeker funding is spent throughout the economy. We estimate that the increased spending unleashed by maintaining the rate would create at least 19,000 new jobs across the economy. We need those new jobs because forecasts for the next year are grim, and young people in particular are facing the prospects of long-term unemployment and underemployment. With a million people likely to be out of work when jobseeker is due to be halved, we need urgent action to make sure that people are kept out of poverty. The cost of putting food on the table and a roof over your head won't halve after the COVID crisis, and neither should income support.
The Greens have long campaigned to raise the rate, but the government's doubling of it during the coronavirus crisis is, in fact, admitting that people out of work need $1,110 a fortnight to pay the bills and the rent. Now that we've got a more realistic rate of income support, we will campaign hard to keep it. We back the calls of thousands of Australians who are urging the government to keep the jobseeker payment above the poverty line. It is unacceptable to return the jobseeker rate to $40 a day, condemning over a million people to live in poverty. People on income support spend that money to make sure that they're looking after themselves and their kids.
Raising the rate isn't just the right thing to do for people; it's absolutely necessary to stimulate the economy. We do live in a society and not just an economy, and I think revenue raising by not dishing out massive tax cuts to people who don't need the help, by cancelling those billions of dollars of free public money to people who are polluting and wrecking the climate, and making fossil fuel companies pay their fair share, is a more than adequate response in a compassionate society where we are wealthy enough to make sure that no-one is left behind and no-one, no child, lives in poverty.
It's about time this rate was retained. We welcome the fact that it has, in fact, been lifted at all. Let's now retain that rate. We cannot drop people back down to poverty just as this crisis is due to end.
Australians have responded magnificently, working together to stay at home, observe social-distancing requirements and take care of one another. But, after months of being inside, isolating from friends and family and trying to balance work with the added responsibilities that come from children learning at home, Australians could be forgiven for wanting things to return to normal. But 'normal' was not good for many Australians. For casual warehouse workers, it meant not knowing what your wage would be the following week. In many, many cases in the retail sector, it meant working in an environment where your employer was stealing your wages and doing so knowingly. For childcare workers, it meant that no matter how much you loved your job you did it knowing that it was undervalued for the skill and care required to perform it. For people on income support payments, it meant a daily struggle for a dignified life.
People who are out of work deserve to be treated with dignity. The rate of the jobseeker payment before this pandemic was inadequate; the government's increase to the payment during the pandemic is an admission of this fact. The increase that's been provided means that people don't have to choose between missing a meal and missing a job interview if they don't have the money for both.
It is strange, indeed, that the top priority for the Liberals appears to be cutting this payment. Reports are that the government wants to snap back the jobseeker payment to $40 a day. Those reports are disturbing. The latest advice from the Department of Social Services is that it believes another 400,000 Australians will require the jobseeker payment by September, bringing the total number of recipients to 1.7 million Australians. This is important for those 1.7 million people, but it is also incredibly important for the Australian economy. It is a payment that is helping to keep the economy afloat.
Snapping back the payment to its old rate will be the equivalent of removing $1 billion per fortnight from the Australian economy. It will have a dire impact on small businesses. It will have a dire impact on jobs. This money is all being spent on essential services in local communities, and it has a big impact in the regions. This payment means a great deal to small businesses in northern New South Wales. This payment means a great deal to small businesses on the South Coast and those communities ravaged by bushfires. This payment means that there is money available in communities not only to keep businesses afloat but also to keep people healthy and safe in their homes.
So why would the government even contemplate doing this? This is a group of people attached to their ideological ideas. This is a government that struggles to adjust to changing circumstances. We saw this in the policy proposals floated by the Treasurer in his statement today. In good times, the policy solution is tax cuts and IR reform. What's the policy solution in bad times? It's also tax cuts and IR reform. It is a policy for all seasons. There is no circumstance where the government's response will not be tax cuts and IR reform.
In this policy area, the government has an obvious, sneering, ideological distaste for people who require welfare. We hear them say that the best form of welfare is a job. Well, jobs are good, and we need more jobs, and these kinds of payments at a time of crisis support jobs. But if you ask Australians who can't find work, they will probably say that an unemployment payment that you can live on is also pretty good. Those 1.7 million Australians won't be out of work in September because they're lazy. There simply isn't the work out there. Any examination of the stats from the ABS, in particular the underemployment figures, will show you that there hasn't been sufficient paid work in the Australian economy for some time. The government should treat people who are out of work with dignity.
I rise to support the call to retain the rate of the jobseeker and youth allowance payments. A return to the old rate of the jobseeker and youth allowance payments, below the poverty line, would be a colossal moral failing. The Liberals must be forced to confront the fact that they are considering thrusting hundreds of thousands of Australians back below the poverty line in the middle of a crisis. This must not be allowed to happen. We must retain the rate.
I particularly want to focus on students and young people. Before the rate was raised, successive Liberal and Labor governments had abandoned students, leaving them to face the high cost of living and extreme stress on their own. Instead of focusing on studying they were struggling to get by, with many working multiple jobs to survive because of inadequate support. Last year research found that a quarter of students were experiencing food insecurity, and 15 per cent reported experiencing hunger or not eating because there wasn't enough money for food.
The fundamental principle is simple: full-time university and vocational and training students should have income support that enables them to focus primarily on their studies. While not perfect and certainly lacking on the eligibility front, the current payments are much closer to that goal than they were before.
Retaining the rate is made all the more urgent by the outsized impact of this crisis on young people. In the month from mid-March, 7½ per cent of jobs were lost to truly devastating consequences for people around the country. But for young people it was even worse. Nearly 12 per cent of jobs held by people aged between 20 and 30 were lost during that period, and an enormous 20 per cent of jobs held by people under 20 disappeared. Those figures are only expected to get worse. A recent Grattan Institute report found that about 30 per cent of workers in their 20s will be made unemployed by this crisis. Even once the depths of this crisis pass, young people will bear the consequences for years to come as they are confronted with decades of student debt to pay off, pay cuts on top of already flat wages and degraded workplace rights.
As well as retaining the rate, we have to make sure that access to income support is fair. For students, that means putting the nonsensical independence test behind us and expanding youth allowance eligibility to all students. That means ensuring eligibility for Austudy is expanded to all postgraduate students. That means including international students in income support, just as New Zealand, Canada and other countries have done. Only by retaining the rate and expanding eligibility for income support can we keep people out of poverty and rebuild as a more socially and economically just society after this crisis.
I am just getting used to the new seating arrangements. It feels a little bit more like a Labor Party conference with a lectern than the Senate chamber itself! I'll try and behave a little better in here than I do at those conferences.
I do want to take the time, today, broadly, to support the comments of my fellow Labor senators on the MPI debate, but I do want to make a couple of comments following Senator Faruqi's comments about the position of international students and the government's approach to the higher education sector, more broadly, in the coronavirus crisis and in the following period.
I walked into a food queue last week of Thai students, organised by a Thai community organisation in Chinatown in Sydney, 100 Thai students lined up with their bags, collecting food because they couldn't afford food. There was another queue just like that in Ultimo today. The university sector is Australia's third largest exporter. It's certainly the most labour intensive. There are 130,00 direct workers, highly skilled people, tens of thousands more people employed as casuals. It's a very big employment footprint.
The coronavirus crisis means, in the next six months, Victoria University predicts a $4.6 billion hit to that sector. It's going to compound, $19 billion over the next three years, but there's no package. There will be 21,000 lost jobs if action isn't taken by the federal government, but no package. Many of those jobs will be in core research areas in big cities. Thousands of them will be in regional communities, some of them represented by people on the other side. No package; no action. Worse still, research will stop. Classes will be cancelled. Opportunities for kids from working-class families will be gone. It's one more example where the posturing to the base, of figures on the back bench of the Liberal Party and the National Party, is dictating government policy.
This week it's been George Christensen running foreign policy for the government. A few weeks ago, it was Senator Paterson running higher education policy for the government. He stood up, reportedly, in the caucus and said:
With the ongoing China travel ban, I’m very sympathetic about the impact of tourism and farmers, but I’m less so with the universities.
The universities, he said, 'rode the cycle up; now they can ride the cycle down.' Those sorts of comments reflect a majority view on the other side and it shows what a deep misunderstanding they have of the sector and its value. Fighting a culture war against imaginary people in turtle-neck sweaters in university English departments—but what do universities actually do? They do agricultural research, medicine, cancer, mental health, engineering, economics, thinking about future work, research into space, defence technology, epidemiology and public health. Universities are full of experts. I understand the hostility of people on the other side of this chamber to experts, but they are experts, nonetheless, the very people who the federal government relied upon to develop its COVID-19 response. They don't just teach. They do deep research. One of the consequences of this failure to have a package, is that much of that research will stop. University research is not something that can be turned on and turned off just like a tap.
Further to this, there's this hostility from the other side to international students. The truth is, Australia's enormous contribution, in terms of education of international students, subsidises the places of Australian students at our universities. The increase in international students does mean less of a Commonwealth government contribution. We should be supporting these young people in this country. We have made a deep contract, not just each individual university but as a country, with the parents of these young people, to educate them and to look after them. The shameful scenes of food queues, the reports back to these people's host countries, will do enormous damage to the reputation of Australia as an educator and as, what should be, a good global citizen.