With our federal politicians receiving pay increases from 1 July, and their strong advocacy for tax relief for the top end of town, it seems timely to remind ourselves that the unemployment benefit hasn’t budged in a quarter of a century. The situation is now so dire that even business groups and conservative economists believe something needs to be done about it.
Like too many others, I’ve been forced to rely on Newstart to get by in the past. The most recent period was just after the Gillard Labor government had shifted single parents with children over eight years old who were receiving parenting benefits over to the Newstart allowance. That decision left families like ours between $60-$100 a week worse off, but as the economists spruiked it at the time, the government would save $728m over the next four years. We didn’t find much consolation in that.
I was a single parent and we had been experiencing persistent housing stress at the time, so I recall the government’s decision well. I’d just managed to upgrade our housing situation to a private rental after a couple of years of unsettled tenancy as guests in the family homes of friends and in open share house environments. I had been forced onto the dole after a workplace accident and had been on Newstart for around nine months, before shifting across to a study allowance. The total payments from Centrelink left us about $200 shy of the monthly rent.
When not parenting and studying full time, I’d try to find work, but my hours of availability were limited. More often, I’d cover the gap using a credit card and try to catch up on that debt further down the line. The house was fairly run-down and uninsulated, which contributed to high heating bills in Melbourne’s long winters. Payment of those bills and other utilities was regularly left until receiving the final notice and often beyond, through payment plans to catch up on overdue payments. We skipped meals, struggled with school fees, school uniforms, and things like school excursions and concerts and all the other crushing experiences that people endure living hand to mouth.
The Australian Council of Social Services (Acoss) estimates that around 1.4 million Australians relying on the Newstart allowance continue to live on a fortnightly budget that sits $300 below the internationally accepted poverty line. That means the nation’s unemployed, and its underemployed, are living hand-to-mouth existences.
Often these kinds of figures fail to “cut through” to the public conscience. Consequently we see embarrassing and somewhat offensive publicity stunts such as the one that embroiled Liberal MP Julia Banks last month, after she claimed that she could live on $40 a day. That figure was rounded up from the current Newstart daily rate of $38.98. The difference is important, because every dollar counts when you’re actually struggling in poverty. It’s also worthwhile pointing out that Banks’ daily travel allowance for each sitting day of parliament amounts to $285 a day. That’s on top of her minister’s salary.
Banks echoed the opinions of many of her colleagues on the big hill when she said that she didn’t believe the payment was too low. The Salvation Army disagrees, describing life on Newstart as “devastating hardship”. Alongside Acoss, the Salvos have called for the allowance to be lifted by $75 a week. Economist Chris Richardson, a senior partner at Deloitte Access Economics, also disagrees, describing the payment as “embarrassingly inadequate” and urging government to improve it by $50 a week, as well as indexing it to future wages instead of prices in order to keep up with national living standards. That would cost the commonwealth $3bn, but would be money “well spent” according to Richardson.
Raising the payment has support from other unlikely quarters too. The Council of Small Business thinks it needs to go up. So does the Australian Industry Group and the Business Council of Australia. In June, the Australian Local Government Association (Alga) also passed a motion calling on the federal government to immediately increase Newstart, the Youth Allowance, and related payments arguing that it would “increase the wellbeing and life chances” of people receiving the allowance.
Any increase to the payment was noticeably absent from the federal government’s latest budget. The Labor party has promised to look into it if it wins the next election, with opposition leader Bill Shorten saying his party will give welfare payments a “root and branch” review. Both the Coalition and Labor have been aware of the dire situation since the 2009 Henry Review, which recommended that the Newstart allowance be raised.
They were reminded of it again in 2012 in a National Centre for Social and Economic Modelling report which said indexing Newstart to the consumer price index rather than income growth was ensuring “that these households continue to slide further behind the rest of the community in terms of economic resources and opportunities”.
Bill Shorten was workplace minister then and said the Gillard government would consider raising the payment. They never got around to it. Maybe they’ll be moved by the Newstart choir, which has rewritten the words to Gough Whitlam’s 1972 election campaign song, It’s Time, to call on Labor to lift the payment in order to provide the unemployed and underemployed with “a real start”.
“It’s time for shelter, not market helter-skelter!” they sing.
When I was trying to live on Newstart, I used to half-heartedly joke that if I remained quiet enough and barely moved, I would be able to make it through the day without incurring any more debt, because humour was just about the only thing I could afford. This is not a predicament that facilitates somebody acquiring employment. It is isolating and degrading and can contribute to increases of other significant community issues that we as a community continually struggle to resolve.
As 1.4 million of the country’s most vulnerable continue to experience housing stress, fall behind in their power and heating bills, skip meals, go without necessary medication and regular health checks, and miss out on employment opportunities, the government must heed the latest calls for a fair, sensible hike in welfare allowances.
- Jack Latimore is a Guardian Australia reporter and columnist