Not an either-or: Newstart must be lifted to ease worsening poverty in Australia

Posted 7 March 2013 10:00am
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Release Number: 066Q1005
 
Peak community welfare groups and charities today restated their call for a $50 increase in Allowance payments such as Newstart in this year’s Federal Budget as a fundamental requirement to help lift hundreds and thousands of people out of worsening poverty in Australia. 

Media reports yesterday suggested the Government is considering a proposal to allow single parents and other people on the Newstart Allowance to keep more of their earnings before losing benefits, rather than increasing the Newstart payment itself. This is not an ‘either or’ choice. While we need to allow people to keep more of the money they earn, we also need a more adequate base payment.

There should not be a trade-off or the central problem that current payment levels are driving people further into poverty and making it more difficult for people to find paid work will be missed. It is like filling potholes in a road when the road should be rebuilt.  

The poverty experienced by people on these very low payments, including those parents who are unable to find any paid work, is real and must be addressed if we are going to make any difference in the worsening plight of people on allowance payments.

If the problem with Newstart Allowance isn’t fixed then more and more people will suffer a loss of income as they are bumped down from the pension onto Newstart. The gap between the pension and Newstart Allowance for a single adult without children is $140. For single parents on Newstart it is $120 per week.

The evidence is clear that the inadequate $35 a day payment is having a devastating impact on people’s lives. They are simply unable to keep a roof over their head, feed themselves, pay bills and look for work on a payment that hasn’t been increased in real terms for nearly 20 years.

There’s no doubt that increasing the amount people can keep before they start losing their payment is crucial, and this will help the hundreds and thousands of people already supplementing their income through part time and casual work. However this does nothing for the most disadvantaged people on unemployment benefits, especially those with disabilities, mature age people and single parents who are unable to find paid work.

There are currently over 100,000 on Newstart Allowance with a partial capacity to work, with significant disabilities. By 2014, one in five people on Newstart will have a partial capacity to work. Of the 789,976 on Newstart and Youth Allowance, 253,000 have been looking for work for more than two years, 250,000 are aged over 45, and 155,000 are aged over 50.

With one in five receiving the Newstart Allowance for more than five years, it can no longer be claimed that the Allowance is a ‘temporary’ payment for people in between jobs.

We need a comprehensive approach to this issue if we are really going to make a difference to worsening poverty in Australia, and provide people with a hand up to participate in our society.

We are calling on the Federal Government to listen to the overwhelming body of evidence from parliamentary inquiries, countless reports from charities and community groups, unions and business groups, and its own Social Inclusion Board and Henry Tax Review panel.

Signatories to this statement:
Australian Council of Social Service
Anglicare Australia
Australian Federation of Disability Organisations
Australian Youth Affairs Coalition
Catholic Social Services Australia
COTA Australia
Jobs Australia
National Council of Single Mothers and their Children
National Welfare Rights Network
St Vincent de Paul Society National Council of Australia
The Benevolent Society
The Salvation Army

Media Contacts:
Fernando de Freitas (ACOSS)  - 0417 626 155
Roland Manderson (Anglicare Australia) - 0412 241 379
Stephen Gianni (Australian Federation of Disability Organisations) - 0417 589 373
Andrew Cummings (Australian Youth Affairs Coalition) - 0435 146 979
Jackie Brady (Catholic Social Services Australia) - 0417 220 779
Ian Yates (COTA Australia) - 0418 835 439
David Thompson (Jobs Australia) - 0419 527753

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