Rob Idol

Not moving Newstart is an act of bipartisan apathy

Again, we’re discussing our poor welfare system, and Canberra’s inability to increase Newstart. Both parties have had their opportunities to move it, and they still do. Whether they will, is, unfortunately, a matter of discussion.

 

 

 

The Morrison Government managed to deliver their big promise, their tax cuts package that would gift a very large portion of the working population with a $1,080 bonus in their tax (by way of an offset). It was clearly a popular decision – at the end of July yet and the ATO has seen an increase in tax return lodgements to the tune of around 500,000 on last year.

This bonus, whilst certainly welcome and needed, didn’t assist certain sections of the population. In fact, it didn’t serve those who actually needed the help the most and it seems. The modern state of populist politics is a double-edged sword – and we cannot forget those at the pointy end.

For those playing at home, we’re talking about the Newstart allowance here – more colloquially referred to as “the dole”. A welfare payment that in real terms has not increased for 25 years. A welfare payment that approximately 723,000 Aussies rely on as their only means for survival; but with 723,000 being around 2% of the population, it’s doesn’t seem to fit into the plans of what has now become a political system almost exclusively operating to win votes rather than achieve results.

Whether you agree with their politics or not, there is an exception to this. The Greens consistently put out a policy that is guaranteed to be unpopular with the majority but works to serve the minority that is forgotten in the dash to secure votes. So it should be no surprise that they’ve have been pushing a bill that would see Newstart increased by $75 per week since the middle of last year. Even former PM John Howard weighed into the discussion at the time, indicating that the now 25-year freeze on Newstart had “probably gone on too long”.

In the end, there was no large push to increase Newstart from anyone apart from The Greens. But there almost was. A probe launched by the Government in mid-2018 into the causes of long-term welfare was almost finished in the lead up to the last election.  It turns out, the final draft of that report which had been agreed to by MPs from the Coalition, Labor and members of the crossbench, specifically called for an increase to the Newstart payment for both singles and families.

 

This bipartisan support for an increase was, however, missing from the final report. It was removed at the behest of then social services minister, Paul Fletcher. The Libs had no desire to walk into an election they were expected to lose, with any indication they agreed that the lower end of town needed help too.

 

This bipartisan support for an increase was, however, missing from the final report. It was removed at the behest of then social services minister, Paul Fletcher. The Libs had no desire to walk into an election they were expected to lose, with any indication they agreed that the lower end of town needed help too.

That position, as we are learning now, doesn’t appear to be unanimous within the party. Last week saw a number of Labor backbenchers, business and welfare groups drag the issue back into the spotlight; and they quickly found themselves an ally in former deputy PM, Barnaby Joyce. Joyce said, “Certainly $555 or thereabouts a fortnight is difficult, especially in regional areas….especially if your rent’s $250 a week, well, you’re not really going to get by….It’s just the very nature of being poor. It’s more expensive to live; things go wrong, they need to be fixed, cars breakdown because they’re old, the heater you buy is the inefficient one.”

Before long, Joyce was joined by colleagues from the Nationals but also those from the Libs including Victorian MP Russell Broadbent.

PM Morrison, however, won’t be budged on the matter. He has made it crystal clear to his party that his “number one priority” is returning the budget to surplus and if there were to be any future increases in welfare payments, they would be directed at those on the aged pension.

Yesterday, Scott Morrison noted that the existing payment was “modest”, but also planted that he would not engage in “unfunded empathy”. Eric Abetz took it further, stating on Q&A that the existing debt would not allow an increase in Newstart, but if their hands weren’t tied, every politician would be open for such a thing.

Disappointing, but not unexpected. The Labor party have now changed their official position and called on the government to increase the payment; with a rather large caveat attached to it. They won’t decide on what that increase should be until closer to the next election. Subsequently, they’ll oppose the Green’s bill to increase the payment by $75 a week. Rather than take advantage of a situation that could see them force the issue and get a result in the near future; they’ll delay it until they can really capitalise on it for votes.

This is despite the fact that the Australian Council of Social Service is calling for it now; as are the Business Council of Australia. Even the modelling undertook by Deloitte Access Economics clearly shows that economic growth and employment would be higher over the long term as a result of a $75 per week increase. The Reserve Bank Governor, Philip Lowe, has also acknowledged that the increase would result in a benefit to the economy at large.

 

 

Brendan Rynne, the chief economist from accountancy firm KPMG, has also suggested that apart from the increase being fair policy, that it would also be good policy. Dr Rynne said, “People who are living on Newstart are on the poverty line….KPMG has worked out that Newstart has to be increased by about $80 a week for it to catch up to effective wage growth since 1994….given the number of people on Newstart, that’s going to cost the Government about $3 billion a year…the budget can afford it”.

The modelling exists; it’s supported by experts yet Labor won’t accept it until closer to an election that is almost three years away. How can this be seen as anything other than an attempt to leverage the lives and welfare of over 700,000 Australians against a cheap a grubby vote grab?

There is a bill now that lines up with that modelling and based on the level of support coming from the backbench of the Libs, it could pass with Labor support.

But what’s the big deal? The Morrison Government argues that Newstart isn’t supposed to be a lifestyle choice and that they are only interested in getting people off it, rather than the survival of those on it. Morrison has defended his refusal to entertain an increase by suggesting that “It goes up twice a year and 99% of people on Newstart are also on other payments”.

He’s right; it is indexed twice a year but it’s indexed against prices rather than wages like the age pension is. Which is all well and good if you are in a situation where prices are rising in line with wages; but since the last increase to Newstart in real terms back in 1994, wages have grown 40% faster than prices. The result is that the age pension has doubled in real terms since the year 2000 whilst Newstart hasn’t moved.

Many of those on Newstart do in fact receive other payments as Morrison suggested. But when that is actually broken down into real terms, the majority of Newstart recipients receive an average value in “other payments” of $7.32 per week – rather than living on $39 a day, they live on $40 a day.

 

An analysis of Newstart by the Australian National University’s Professor Peter Whiteford has found that “For many unemployed people, Australia not only doesn’t have one of the best safety nets in the world, it has one of the worst”.

 

Morrison has also claimed that our welfare safety net is one of the best in the world. However, an analysis of Newstart by the Australian National University’s Professor Peter Whiteford has found that “For many unemployed people, Australia not only doesn’t have one of the best safety nets in the world, it has one of the worst”.

This isn’t about handouts. This isn’t about damaging the incentive to get off Newstart and get a job. The majority of people living on Newstart don’t want to be – apart from the social pariah status that comes part and parcel with it, it is almost impossible to survive financially.

If anyone suggests that $555.70 (the current maximum Newstart allowance for a single with no children) is sufficient to cover the basics of survival, then they need to be committed to a room with padded walls. In 2018, the average weekly rent in this country is $427 per week ($854 per fortnight) – even the lowest of the capital cities (Adelaide) is $374 per week ($748 per fortnight). The average rent across regional towns is still $355 per week ($710 per fortnight).

So just getting a roof over your head requires you to secure accommodation at well below the average rental rates available (if you can find a landlord willing to accept your application without a job of course) and would still eat up your entire benefit payment – is it any wonder we have over 100,000 homeless in this country?

We are supposed to be not just a developed, first world representative democracy; but also one that sets an example of what others should aspire to. Ask any seriously successful business leader about the key to success for their organisation and they’ll tell you that it’s about how they treat those at the bottom, not how they reward those at the top.

A nation is no different; if we don’t provide a fair foundation for everyone to start from and a fair safety net to protect them when things don’t go well, then we are no different from those that deliberately seek to attack the most vulnerable in their societies. We aren’t all born into money; but we are all born (or choose to become) Australian – and that’s actually supposed to mean something.

 

 

 

 

 

 

 

Rob Idol

Rob is an aspiring writer who balances his time between a “real” job and his passion for politics, social justice and all things creative. He has an MBA, an unhealthy obsession with current events, an even unhealthier obsession with pop culture and has been known to offer favourable food reviews in exchange for free meals. www.robidol.com.au

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