While low-income relief welcome, more than just a quick fix needed

12 March 2020

While the Government’s stimulus package provides welcome short-term relief for people on low incomes, much more is needed to safeguard people and the economy, says the Australian Council of Social Service.

In response to the $750 one-off payments for people receiving payments including Newstart, Youth Allowance, Austudy, Disability Support Pension, Carers Payment, Family Tax Benefits, Commonwealth Senior Health Card Holders and the Age Pension, from March 31, 2020, with one payment per eligible person, ACOSS CEO Cassandra Goldie said:

“People are doing it really tough, especially people on Newstart and Youth Allowance – the lowest payments – and pensioners who don’t own their home. The payment will be welcome short-term relief but it’s nowhere near enough. Leading economists urged the government to increase Newstart ongoing to build consumer confidence and to guarantee that the payment would be spent into the real economy.

“We know that increasing Newstart by $95 per week ongoing would inject $4 billion into the economy a year and generate more than 12,000 jobs, helping to deliver the ongoing confidence business is crying out for.

“We’re calling on the Government to urgently increase Newstart by $95 per week ongoing by the Federal Budget to help lift people out of poverty and prevent those facing job losses from falling into the poverty trap, while rebuilding the economy.

“The Government has not targeted today’s package in the way that was needed, with some of these $750 payments going to households who don’t qualify for a pension because they have millions in superannuation assets. These households are less likely to spend than someone living on $40 a day. Others are seriously left behind, particularly larger families on very low incomes.

“While we welcome the waiver of some wait times for social security payments, such as Sickness Allowance, this is not the answer for people unable to work due to coronavirus. We back calls from the ACTU to guarantee at least two weeks paid leave for people prevented from working due to this health crisis.

“Just like everyone else trying to get by on Newstart, people who lose their jobs as a result of the coronavirus, need more than $40 a day to put food on the table and keep a roof over their head. Sickness Allowance, less than 40% of the minimum wage, will not result in people taking time off paid work when they need to self-quarantine.

We also need a guarantee that all wait times and mutual obligation requirements for social security payments are waived during the coronavirus outbreak. The Government must also ensure that Centrelink is better resourced to handle the distribution of payments.

“A key missing gap in today’s stimulus package is investment in public infrastructure which can be rapidly rolled out, particularly in social housing construction, which would reduce homelessness, while creating jobs.

“Another missing gap appears to be support for community service organistaions on the front line of responding to the economic and health challenges, such as homelessness and childcare services.

“While the direct funds to small businesses should soften rising unemployment, the depreciation allowances may be less effective, because businesses will not invest in new assets without the confidence of ongoing demand.

“Overall, while some parts of today’s stimulus package are likely to be effective in the short term, we will need to see much more from the government in coming weeks in order to safeguard people and the economy.”