Major parties must agree to increase Newstart to reduce worsening poverty

22 May 2013

The Australian Council of Social Service today called on the nation’s major political parties to agree to move urgently to legislate an increase in low income support payments, such as Newstart Allowance, in order to stem the rise in poverty, following the release of yet another report showing that people are falling deeper into poverty in our country.

“The Salvation Army report shines a spotlight on a problem community welfare groups, the business sector, unions and others have been raising for a long time,” said ACOSS CEO, Dr Cassandra Goldie. “We know that the $35 a day Newstart payment is now grossly inadequate and has been allowed to fall further behind community living standards because it’s not properly indexed and hasn’t been increased in real terms for nearly 20 years.

“This new report puts a human face to the impact of the federal government’s decision to cut the payments of over 80,000 single parents, most of whom are women. Not only has there been a 12% increase in people on Newstart seeking help from the Salvation Army, more than 40% cent were single parents with children older than seven. This is the age at which parents are forced off parenting payments onto Newstart Allowance, losing between $60-$110 a week.

“The Government was warned the move would be extremely damaging. We’re been hearing from so many single parents about the impacts since they came into effect in January, and now we have solid data to illustrate this.

“It is distressing that about 60% of people seeking emergency relief from the Salvation Army cannot afford dental treatment and 35% go without prescribed medication. More than half the 2705 respondents said they could not pay for out-of-school activities for their children and 37% could not afford school activities such as excursions.

“The government’s Budget announcement that people can keep more of their Newstart Allowance when they find employment does not help the 4 out of 5 people on Newstart who cannot get into paid work. The Salvation Army report highlights the challenges facing jobseekers – from finding child care, to inadeqate help from employment services for people disadvantaged in the labour market. People can’t simply walk out of poverty into paid employment tomorrow, as is often naively assumed.

“It was extremely disappointing that the federal Government chose not to include an increase in the Newstart payment in last week’s Budget, despite widespread community support.

“It was also disturbing that on the same day that the House of Representatives passed an Australian Greens motion declaring that the rate of Newstart Allowance is too low last week, the federal Opposition announced that it would take away a $4 a week supplement that provides a little extra support to those people on Allowance payments who are falling deeper into poverty.

“An increase in the lowest social security payments for single people including single parents is the one policy that would have the most immediate and widespread impact on the lives of people affected by poverty. Lifting the single rate of allowance payments would help lift almost one million people out of the most desperate of situations. Greater investment in employment assistance for those most disadvantaged in the labour market is also essential.

“As a nation we can and should do better. We call on our elected representatives to show leadership on this issue and legislate a much needed $50 increase in Allowance payments for single people as a matter of urgency,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155