A man recently shared his story with us about living on Newstart. He received the payment for three months, and in that time became malnourished and underweight because he could not afford to eat more than one meal per day. After rent and other bills, he had around $40 per week left. This man was starving but still had to fulfill his job search requirements. Luckily, he found a job, but most people receiving Newstart spend more than 12 months on the payment; a payment so low that it literally starves people.
The last time Newstart was increased above inflation was in 1994, when it went up by $2.95 per week. To give an idea of just how long it has been since Newstart received a real increase: 24 years ago Muriel’s Wedding was showing in cinemas; petrol set you back around 60 cents a litre; and Nelson Mandela became president of South Africa.
Since 1994, wages and pensions have risen well above inflation (and in 2009, the former Labor Government increased the Age, Disability Support and Carer pensions by $32 per week). Since 1994, of course, housing costs have skyrocketed, as have other essential costs of living, including energy bills and out-of-pocket health care costs. But successive governments have expected people who are unemployed, studying or looking after children to cover the cost of living with a payment that was not even enough in the ‘90s, let alone in 2018.
This is why people on Newstart skip meals and cannot heat their homes in winter. This is why they cannot afford to travel to job interviews. This is the main reason why people sleep in their cars, couch surf or sleep on the streets—because Newstart and Rent Assistance are not enough to keep a roof over your head.
ACOSS is calling for Newstart, Youth Allowance and other similar payments to be lifted by a minimum of $75 per week, to help people cover the cost of the absolute basics. Our position is based on research done by the University of NSW where they looked at the minimum level of income someone who is unemployed needs to cover housing, food, transport and clothing. They found that Newstart and Rent Assistance falls $96 per week short of what is required for a single person. ACOSS therefore calls for Newstart to rise by $75 and Rent Assistance for a single person by $20 per week to bring people up to this benchmark.
Lifting these payments would give people a chance to eat enough and to cover the cost of the bus ticket or fuel to get to that job interview. It would help pay for school shoes for the kids (there are more than 110,000 single parents on Newstart). It would right a longstanding wrong that has impoverished people in Australia for more than a quarter of a century.
It is also good for the economy. Deloitte Access Economics has looked at the economic benefits of a $75 per week increase to Youth Allowance and Newstart and unsurprisingly, it is extremely positive. This policy would deliver 12,000 new jobs across the country and wages would rise by 0.2%. Government revenue would increase by around $1 billion. Rural and regional Australia would be the biggest beneficiaries because of the number of people outside of our cities needing these payments, and almost every cent would be spent locally.
Lifting Newstart and other allowances would do more to reduce poverty in Australia than any other policy. It is the bare minimum required to reduce inequality and help people with important aspects of their lives, like giving their little ones all they need and finding paid work that is sustainable and fulfilling.
We all benefit if we ensure that we all have access to enough money to live with dignity if we lose our job, get sick, need to care for children or are studying. We should not lose everything if we are not able to be in paid work for a range of reasons at some stage in our lives.
This is why we must Raise the Rate and give people enough to put food on the table and keep the lights on. We can change lives if we Raise the Rate. Show your support here
Dr Cassandra Goldie is the CEO of ACOSS, a national advocate for action to reduce poverty and inequality and the peak body for the community services sector in Australia.