Spring-Summer 2019

Raising Newstart Both Right and Smart

It is not right that in a country as rich as Australia, more than three million people are living in poverty including on average, more than five students in a classroom of 30 Australian school children. That can mean going to school or to bed hungry. More than nine in 10 of us agree, that “In Australia, no one should go without basic essentials like food, healthcare, transport and power.”

The single most effective solution to reducing poverty in Australia would be a $75 a week increase in Newstart. That’s why this year during Anti-Poverty Week we encouraged our network to support the Raise the Rate campaign. Increasing Newstart and linked payments would help reduce poverty for around one million Australians, including about 160,000 children whose parents depend on these payments. Increasingly, Newstart has become a dilapidated waiting room for the age pension with close to one in four recipients aged 55 years or more. It is also a de facto disability payment with up to two in five people assessed as having some type of disability and one in four with only a partial capacity to work. Sole parents are forced to claim this lower payment when their youngest child turns eight and often skip meals to ensure their children don’t.

Newstart traps people in poverty and many employers say it acts as a brake on job search. That’s why the Business Council of Australia called for an increase as long ago as 2012. No-one thinks the pension is generous, but Newstart at around $40 a day is now $20 a day lower than the age pension. KPMG’s submission to the Senate inquiry says that Raising Newstart Both Right and SmartNewstart should be increased by nearly $100 a week, arguing the low rate of the payment “tears at our inclusive social contract”. They state “Where the objective for Newstart is that it should be sufficient to meet the basic needs of a person who is required to spend time and money actively seeking work, it is hard to see how it can achieve this objective at less than two-thirds of the amount deemed to be reasonable for an Age Pension recipient who would have no such obligations.”

While all those receiving Newstart would love to get a job and do pick up work from time to time, a job is not the only solution to escaping poverty. According to the ACOSS/UNSW Sydney, Poverty in Australia 2018 report, in 2015-16 nearly 970,000 people who had wages as their main source of income were still living in poverty. That is due to a combination of slower wage growth and the rise of part-time, insecure or precarious work, where there just isn’t enough work available. The latest ABS unemployment numbers for August 2019 tell us more than 1.1 million Australians, or around the same number of people who live in Adelaide, are underemployed, meaning they cannot get as much work as they would like. This is in addition to over 700,000 people who are officially unemployed.

This Anti-Poverty Week, the Society continued their campaign to increase Newstart and encouraged their supporters to meet with their local MPs or senators. In Canberra, they hosted a Raise the Rate breakfast with CEOs who participated in their CEO Sleepout in June at the Canberra airport. At that event, employers heard from ‘David’, a 49-year-old former public servant who had been living on
Newstart for 12 months. He had resigned from his job to care for his elderly mother after she fell badly while living at home alone. After she passed away, he needed to sell the family home and ended up trying to make ends meet while job searching. For three months in the middle of a cold 2017 winter, he slept in his car. More recently, he described the experience of applying for jobs and finding out he was one of 25, 35 or even 48 being interviewed. Unfortunately, we expect to hear yet more harrowing stories of hardships endured by people trying to get by on Newstart as the Senate Inquiry continues public hearings.

While interest rates and tax cuts don’t seem to be boosting our flagging economy, raising Newstart by $75 a week would provide a much-needed stimulus with every dollar spent, especially in regional areas which are doing it tough in the worsening drought. At the end of Anti-Poverty Week, the NSW Deputy Premier John Barilaro spoke at the NCOSS Putting Regional Needs on the Map Anti-Poverty Week event. He became the first Coalition senior State MP to call for his Federal colleagues to reconsider their opposition to a Newstart increase. The WA, NT and ACT Governments have already called for an increase. We hope that the Federal Government will soon recognise that raising Newstart isn’t only the right thing to do, it’s the smart thing to do.

Toni Wren is the Executive Director of Anti-Poverty Week which ran from 13-19 October 2019. This article expands on an Opinion piece she wrote for the Sydney Morning Herald and The Age, published on 15/10/19. St Vincent de Paul National Council has been a major sponsor of Anti-Poverty Week since 2014.

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