ACOSS applauds Senate inquiry into adequacy of income support payments

26 June 2012

The Australian Council of Social Service today congratulated federal Senators for agreeing to hold an Inquiry into the adequacy of income support payments such as Newstart and Youth Allowance. The Australian Greens motion successfully passed in the Senate this afternoon.

ACOSS CEO Dr Cassandra Goldie said, “Senators have done the right thing. We know that people on these low Allowances are doing it the toughest. This Inquiry will shine the light on the extent of that struggle and hopefully point to ways forward on how to make our income support system more effective and fairer for everyone.

“Newstart Allowance hasn’t been increased in real terms since 1994. We welcomed the recent Budget announcement of a $4 a week Supplementary Allowance but continue to insist on a minimum $50 a week increase as proposed by the Henry Tax Review.

“This is because Allowances such as Newstart have been falling further behind pensions for over a decade due to the fact that they are indexed to the CPI and not to wages. This simply must be fixed because we know it’s driving people into worsening poverty.

“We are pleased the Senate’s Employment, Education and Training References Committee will also inquire into the appropriateness of the allowance system as a support into work, with particular reference to the effectiveness of the payment as an incentive into work. Far from being an incentive to get people into work, even business groups now admit that such low payments have become a disincentive towards employment.

“More broadly the Inquiry will also look at the impact of the changing nature of the labour market, especially the rise of insecure work and decline of unskilled jobs. This is important to give us a clearer picture of the nature and frequency of individual interaction with the allowance payment system and over and underpayment of allowances to recipients.

“The Inquiry will allow for a fuller examination of the impact of keeping income support payments so low on people’s lives. Clearly there is something wrong with the current system and this is an opportunity for us to identify the problems and take remedies to fix it. This is crucial if we are to give people currently out of paid employment the best opportunity to enter the workforce, and ensure they are afforded a dignified,decent,liveable payment while they are locked out.

“ACOSS looks forward to participating in this Inquiry, alongside the broad range of community welfare organisations that have been highlighting these issues for a long time,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

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