Last night Treasurer Josh Frydenberg gave us another crackdown on welfare recipients: the government says it will save around $2.1 billion over five years through data-sharing so that welfare recipients who work will report their income as they earn it, thus avoiding overpayments. Further, Newstart recipients were to be excluded from the government’s $75 one-off energy assistance payment — a move so unpopular it was abandoned within 10 hours.
As has been already observed, last night’s budget was the 25th without an increase (in real terms) to the Newstart unemployment benefit. Today, the payment stands at around $40 a day.
Such a longstanding bipartisan stance on any policy is rare. Leaving aside those bleeding hearts at the Australian Unemployed Workers Union and the Australian Council of Social Services — who, as you would expect, favour a lift to the rate — it’s worth looking at where the community and interest groups are at on this one. Is the payment adequate as it stands?
Yes!
Scott Morrison: Despite the mild concession on the energy payment, the Prime Minister reiterated on ABC’s News Breakfast that the payment would not go up, saying that recipients are not supposed to stay on Newstart in the long run. “What we’re doing is getting those people in record numbers who are on Newstart into jobs — that’s the best form of welfare,” he said. Morrison pointed out that the payment goes up (thanks to indexing) twice a year. Which is true — and last September it increased by $2.20 a week.
Well, who’s to say?
Bill Shorten: The opposition leader has been strangely equivocal about Newstart. He’s admitted that no one in parliament could live on that amount, and has promised a “root and branch review” of the program in the first term of a Shorten government. But, for reasons no one can quite fathom, Labor has as yet refused to firmly commit to an increase.
No
Business Council of Australia: The BCA are by no means a particularly progressive organisation — but they have been saying, for years, that Newstart is too low. Chief executive Jennifer Westacott wrote in the The Weekend Australian in September 2017:
I’m proud to have called out the inadequacy of the Newstart unemployment allowance which, at only $38 a day for single people, has itself become a barrier to effective jobseeking. The objective of welfare reform should be to ensure the right incentives and training programs are in place so people can get into the workforce as quickly as possible and stay employed.
She called last year’s budget a “a missed opportunity to do something on Newstart”.
John Howard: Seemingly the last conservative to actually be able to get anything done, Howard told the PricewaterhouseCoopers post-budget breakfast last year the rate should be raised.
I actually think there is an argument about that, I do. I was in favour of freezing that when it happened, but I think the freeze has probably gone on too long.
Arthur Sinodinos: Gently and equivocally, the New South Wales senator and influential Liberal argued the payment should be raised on Q&A this week:
Over time [Newstart] should be higher. That’s probably a slightly radical thing for me to say here … but my observation is this does raise an issue that should be considered at some stage.
All of South Australia: Late last year, a South Australian parliamentary inquiry into poverty made the recommendation — endorsed by Liberal, Labor, Greens and SA Best MPs — that the federal government make an urgent increase to Newstart:
The committee agrees with the overwhelming majority of submissions to the inquiry that the Newstart allowance is far too low and falls well short of the state-based poverty line.The committee calls on the federal government to make a meaningful increase to the rate of the Newstart allowance (and other base allowances) as a matter of urgency.
Deloitte: The relatively conservative account and audit firm still believes “unnecessarily cruel” dole payments are a more urgent priority than budget repair.
“It is our standout failure as a nation,” Deloitte Access Economics senior partner Chris Richardson said in May last year. “I’m a longstanding campaigner for budget repair, but I would rank it behind the need to lift unemployment benefits in Australia.”
Further, their modelling shows raising unemployment benefits by $75 a week would bring higher economic growth and employment over the long-term.
Have you lived on the Newstart payment? Share your experiences: boss@crikey.com.au.
It seems to me that the whole Newstart system is an anachronism and become a cost saving measure for government as people are thrown off higher paying types of assistance.
The original unemployment benefit suited times of shorter unemployment and a different housing situation. Rents are much higher than they used to be, public housing is scarcer and employment is more precarious.
On cost-saving, an example is the raising of the pension age. This reduces cost to the Treasury, but has created a pool of poverty as many older job-seekers find it hard to get an interview, let alone a job. Successive governments have shown a distinct lack of aggression in forcing a change in attitude by employers, leaving these people in an economic jail of extreme poverty.
I presume the issue is that the ALP need to avoid another scare campaign.
Coming out in support of this will immediately trigger a scare campaign by Murdoch and ScoMo and it’ll drown everything out, as ultimately, most Australians don’t care.
No the issue is that the ALP is 95% the Libs on everything, they just want to be in government not actually plan to do anything or be accountable to the electorate.
Pie in the sky electric cars and a mish mash of focus grouped positive buzz words don’t make for a good government.
the ALP Shorten government will waste time, money as they fail and earn the distrust of the electorate just as the Libs/Nats have.
Party politics is everything but nothing, neither major party present an alternative whilst they are so alike and uninspired to change.
I would withhold judgment on this until seeing Labor’s campaign announcements.
I think the ALP have been cagey on a number of things just to give themselves maximum flexibility until they see the numbers they are working with in the budget.
Are free rose tinted specs coming out of the SussexSt swamp these days?
And your grey tints come free as well AR? I know Labor isn’t sufficiently different to satisfy you, but they are in opposition and therefore judged by what they say rather than what they do, and the free press is neither free nor impartial.
Largely though you judge them by what they haven’t done, and yet they aren’t in power, which seems to escape you.
If and when they attain govt, feel free to fire away. At the moment though your cynicism just reads as a Don Quixote, tilting at windmills
Not only should newstart be increased but there should be a complete revamp on how best to assist those unemployed people who are willing to work but unable to afford to leave their current situation.
Government should pay any unemployed/ underemployed persons transport to, between and from regional, rural and remote regions if there is a greater chance of employment. Pacific island workers are supported to work in agriculture, do more for any locals who are interested in farm work.
Proper income support for people who work in seasonal casual work, so they have some security that they won’t have to wait months to recieve support when they are not employed.
Employment services should return to direct government control, not the current mix of private company’s who don’t want unemployed people to access work unless they get paid for it.
Specific details about jobs ie location, pay, are not freely available to the unemployed without registering with the service provider first…. they present unnecessary barriers for the motivated unemployed person who should receive encouragement and support without the need to sign up with providers.
“The best form of welfare is moving off NewStart into underemployment and paying a greater proportion of your less than liveable wage on getting to and from work!”/”You don’t know how good you got it.”?
….. “Be thankful we’re screwing you and your life!”
When I last heard, the current member for Chisholm (and would-be member for Flinders) Julie Banks claims she could live on the dole.
If only she could get the opportunity to prove it. But that would mean she had put all of her considerable assets into some dud investment, and even a short-termer’s parliamentary payout would probably amount to twenty years worth of Newstart allowances.
Newstart is just one of our too many national disgraces, but the one that most disgraces far too many Australians.