Turn bipartisan concern for low Newstart into action for an increase

12 January 2013

The Australian Council of Social Service welcomes growing interest from all sides of politics in the urgent need to increase the Newstart Allowance payment, and is calling for bipartisan support to make this happen when parliament resumes in February.

“Politicians from all sides have acknowledged in recent weeks that the $35 a day Newstart payment is simply too low to live on. Now we need our federal leaders to come together and convert this concern into action,” said Acting ACOSS CEO Dr Tessa Boyd-Caine.

“We welcome media reports today that options are being considered by the Federal Government. Providing extra supports for people on Newstart, especially the long term unemployed, and allowing them to keep more of their payments if their number of hours of paid work increases, are both very important measures.

“However these measures alone will not address the fact that people on the Newstart Allowance are living in poverty, while we expect them to find and keep a job. A $50 a week increase to the single payment rate is urgently needed to address this. This is what the Government’s own Henry Tax Panel recommended in 2010.

ACOSS has calculated that the Newstart payment is around $74 below the poverty line, so the modest $50 increase will help enormously but still leave people below the poverty line. This makes the other measures a crucial part of the solution.

“Along with extra support measures to prepare people for paid work, and allow them to keep more of the money they earn, we also need to align the different indexation arrangements, which has led to allowances like Newstart falling $140 below pensions. If this is not addressed Newstart is expected to be worth just half the pensions by 2040.

“If we’re serious about addressing poverty in Australia, where 1 in 8 people, including 1 in 6 children are already living below the poverty line, we must right this historic wrong and increase the payment. This will put people in a much better position to be able to participate in society through paid work.

“There is ample evidence, including three parliamentary inquiries and reports by most major charities, that the payment is now so low it’s driving people into poverty and is a barrier to work. This can neither be ignored nor put off any longer. The payment hasn’t been increased in real terms for nearly two decades and continues to fall further behind community living standards.

“The much needed increase would also operate as a stimulus to the economy because people will use the money to feed themselves, pay their high rents and increasing bills, as well as on clothing and other basic items, which they are currently struggling to do or missing out on,” Dr Boyd-Caine said

Media Contact: Fernando de Freitas – 0419 626 155

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