Lift Newstart by $75 per week (not paltry $1.65pw which happens tomorrow) to ease poverty and strengthen the economy
Responding to the Government’s announcement today that last year’s Budget was balanced, ACOSS calls on the Government to boost incomes to stimulate essential consumer spending. As ACOSS warned, tax cuts don’t seem to be having the promised effect and now is not the time to bring forward tax cuts slated for 2022.
“The most effective measure for the economy now is to increase Newstart. With the Budget in balance, the Government is running out of excuses for not boosting the incomes of people who need the greatest relief. The Government should prepare now to announce a major boost for people on the lowest incomes and a substantial social housing infrastructure package in the budget statement at the end of the year, because the tax cuts are not delivering the boost we need,” ACOSS CEO Dr Cassandra Goldie said today.
More tax cuts won’t boost growth, lift Newstart instead
“As NAB and Westpac Bank reported recently and ACOSS has warned, heavily indebted households seem to be saving their tax cuts. To make matters worse, unemployment has begun to rise as job vacancies fall.
“Bringing forward the 2022 round of tax cuts that mainly go to people earning $100,000 or more won’t help the economy right now. It will only undermine the Government’s ability to fund essential services.
“Instead, we urge the Government to lift Newstart Allowance by $75pw. This would inject $3 billion into local economies that are doing it tough over the next 12 months, because people living hand to mouth are sure to spend the money locally on essentials like food and travel to job interviews. Modelling by Deloitte Access Economics estimates this would boost growth in the economy by $4 billion (much more than the $3 billion cost to Government) and create 12,000 jobs.
Tomorrow’s Newstart indexation is a pitiful $1.65pw
“There hasn’t been a real increase to the rate of Newstart for 25 years, while the cost of essentials such as housing has skyrocketed, well beyond the slight indexation of the rate.
‘’Because Newstart is only indexed to the CPI, and not wages as with the age pension, the next increase due tomorrow is a pitiful $1.65 per week, less than the cost of a loaf of bread or 2L of milk.
With infrastructure investment, think beyond roads and rail: think housing
“ACOSS has put a proposal to government to invest $7 billion to build 20,000 homes for people at risk of homelessness over the next three years, to kick start the flagging home construction sector, boost employment and stem the rise in homelessness.
“Unlike big transport projects like roads and rail, direct investment in home construction could be ramped up quickly. Without it, there’s a risk home construction will collapse next year.
“There are 116,000 people either sleeping rough, living in over-crowded homes or living in insecure housing, such as boarding houses and hotels. We can see the evidence of the rise in homelessness on the streets. The best solution is secure, subsidised housing for people on the lowest incomes who have been shut of rental markets across the country.
“We call on the Government to be prepared in its end-of-year budget statement to put this year’s likely surplus to good use by investing in good policy that will act as highly effective economic stimulus, lifting Newstart to ease the most severe poverty, and ending the scourge of homelessness.”