The Federal Government’s decision not to pursue a budget surplus is a sensible and welcome call. We urge the Government to demonstrate leadership once again by increasing income support payments for unemployed, students and single parents.

In a joint statement today Terese Edwards from the National Council of Single Mothers and Their Children (NCSMC), Dr Cassandra Goldie, CEO of the Australian Council of Social Service (ACOSS) and Maree O’Halloran from the National Welfare Rights Network (NWRN) called on the Treasurer and acting Prime Minister, Wayne Swan, to commit to an increase to the single rate of Newstart Allowance by $50 a week.

“The Federal Government could achieve help people in need and stimulate the economy by increasing the rate of Newstart for the 48,000 single parents already on the payment. An increase to Newstart would also address the savage withdrawal of $728 million over the next four years from single parents and their children.

“Payment cuts affecting single parents of between $60 and $110 per week will have a devastating impact upon single parent families and their children, who are already living below the poverty line. These cuts should be delayed until Newstart is increased.

Find out more about the $35 a day is not enough! campaign and Single Parent Payment cuts.

“Three Senate inquiries have raised concerns with the plan to push parents onto the Newstart Allowance. A new joint Committee on Human Rights noted, but was not convinced, by the department’s assertion that this measure is fair and would promote workforce participation.

“An estimated 10,000 single parents will lose access to all social security payments, and will also lose entitlement to the concessions and cheaper medicines that are attached to the Pensioner Concession Card.

“Parenting Payment single recipients currently working will face a harsher income test when moved onto the lower Newstart Allowance, which begins to be reduced when income reaches $32 per week. Parenting Payment (single) does not begin to be reduced until income reaches $87 per week plus $12 extra for each child.

“A single parent family earning between $200 and $500 a week will have their disposable income reduced by between 11.4 and 11.1 per cent. The implications for those single parents who are already in paid employment will be immediate, with parents raising children losing considerable amounts of income. Financial losses of this magnitude will be a major disincentive to work.

“Despite Government claims that 3,000 parents would be eligible for higher payments, such as the Disability Support Pension or the Carer Payment, only 400 parents have been deemed eligible for these payments.

“The Government must prioritise assistance for households doing it toughest. People on the Newstart Allowance of just $35 a day are at breaking point, with 70% reporting three or more indicators of financial stress. They are followed closely by people on Parenting Payment (77%).

“The Government needs to find room to make funding for the National Disability Insurance Scheme and the increased funding to education recommended in the Gonski review.

“The Senate report released in late November found that the rate of the Newstart Allowance, which stands at $246 per week, is inadequate, agreeing that it fails to provide an acceptable standard of living “for anything but the shortest period”. Labor and the Greens Senators have agreed with the overwhelming majority of submissions to a Senate inquiry that NSA needs to be increased and that indexation arrangements must be improved.

“We welcome the statement that a budget surplus is not the most important goal and point out the long-term damage and cost when families slide into poverty.”

For comment:

Dr Cassandra Goldie, CEO, Australian Council of Social Service: 0419 626 155
Maree O’Halloran, AM, President, National Welfare Rights Network: 0425 296 882
Terese Edwards, CEO, National Council of Single Mothers and Their Children: 0439 211 493

ACOSS response to surplus announcement: Letting go of fixed Budget surplus commitment is the right thing to do