Newstart Allowance

The Hon. T.T. NGO (17:16): I move:

That this council—

1. Recognises that all Australian jobseekers deserve adequate income support to maintain a decent standard of living and have access to resources to look for work, which enables and supports recipients to transition to paid work as soon as possible;

2. Supports a root and branch review and measures which seek to increase and enhance Newstart and other related welfare payments, which adequately addresses the current level of poverty among Australian jobseekers;

3. Acknowledges the work of the Anti-Poverty Network South Australia, for its advocacy in this policy area;

4. Recognises that the Turnbull Liberal government, in its most recent federal budget, failed to address this issue and calls on it to immediately undertake a root and branch review; and

5. Recognises the last rise in Newstart occurred in 1994 under the Keating Labor government.

I rise to move this motion, which I put on the Notice Paper a few months ago after my meeting with the Anti-Poverty Network. I also spoke in this house about this very matter earlier in the year.

In doing so, I once again put on the record my support for a rise in the Newstart allowance. Newstart's fortnightly payments to single people without children total $545.80. The cost of essentials, such as housing, groceries, energy, transport and clothing, is a minimum of $866 per fortnight according to the Australian Council of Social Service.

The Newstart payment rises a mere $45 for single parents with children. Newstart is now less than 18 per cent of the average wage and less than 41 per cent of the minimum wage. The Anti-Poverty Network SA is a grassroots community alliance of people with direct, lived experience of poverty and unemployment, including sole parents, carers, aged and disability pensioners, students, jobseekers and others receiving welfare payments.

The Anti-Poverty Network has been running a very public campaign since 2013, trying to raise awareness of the need for an immediate rise in Newstart. It is their belief that current payments operate around $160 below the poverty line.

I ask whether any honourable members in this chamber truly believe that they could live on roughly $40 a day. It is unfortunate, as I have stated previously, that the media's continued focus on the so-called dole bludger has done a lot of political damage, as it seems federally that there are too few who have the courage to advocate for any increase in Newstart.

Many of the unemployed have difficulties finding work, through no fault of their own. Considering this, there are roughly 200,000 job vacancies nationwide. Those competing for that small number of vacancies include around 700,000 unemployed and 1.3 million underemployed people. It does not take an economist to understand that there is a shortage of supply compared with demand.

Likewise, as the economy continues to transform, it is an unfortunate fact that many workers who are losing their jobs in the old industries will find it increasingly difficult to be re-employed and will need time to reskill. I believe that it is time for all major political parties in the federal parliament to come together and make it a priority to raise the level of Newstart. It has been more than 24 years—yes, that's right, 24 years—since the last rise in Newstart by the then Keating government.

Former prime minister Malcolm Turnbull failed to do anything for Newstart recipients in his previous budgets. Julia Banks MP, like other members of the federal Liberal government, has previously said that she could live on $40 a day. I hope that the new Prime Minister, Mr Scott Morrison, who is trying to establish himself as a moderate and caring PM, can do something to assist these vulnerable people. So far, at least, Mr Shorten is more sensitive to the plight of jobseekers. He has recently stated:

I do think there's a real problem for the government payments for the people at the very bottom of our society.

That is why Labor has proposed having a root and branch review of Newstart and like-minded allowances and payments.

Who on earth amongst the government or anyone in the parliament could live on the Newstart allowance?

At this moment, 13 local councils are supporting the Anti-Poverty Network's campaign for a rise in Newstart. They are the City of Adelaide, Clare and Gilbert Valleys, Copper Coast, Kangaroo Island, Mount Gambier, Onkaparinga, Playford, Port Adelaide Enfield, Salisbury, Streaky Bay, Prospect, Elliston and Tea Tree Gully. Support has also been received from numerous community organisations such as ACOSS, Uniting Communities, Anglicare, St Vincent de Paul and the Salvation Army.

These organisations have called for an increase in Newstart of at least $75 per week, along with the Australian Council of Trade Unions, noting the impact of the very low payments on physical and mental wellbeing and social connectedness. According to a 2015 survey by ACOSS, 40 per cent of recipients are unable to pay their bills on time or see a dentist, 46 per cent are only able to afford second-hand clothes most of the time and 50 per cent are unable to raise $2,000 in the event of an emergency.

Further, 44 per cent report having an unsustainable level of debt, owing more than they can afford, with a majority reporting turning off heating and cooling to save money; 32 per cent skipped meals over the past year; 25 per cent are suffering from a housing crisis, spending more than 50 per cent of their income on housing; 20 per cent report not having enough money for essentials like housing, food and electricity; and 63 per cent report that their income had fallen behind the cost of living over the past two years.

Last Monday 17 September 2018, a report by Deloitte Access Economics was released. It was commissioned by ACOSS with support from SACOSS and the other state and territory councils of social service. The report states that South Australia's total disposable income would increase by $288 million if the federal government raised Newstart, Youth Allowance and related payments by $75 per week. The report also states that 12,000 new jobs would be created, wages would increase, corporate profits would increase and federal government revenue would increase by $1 billion, with the total growth in Australia's economy increasing by $4 billion. This evidence demonstrates that there are broader economic benefits in implementing a rise in Newstart.

While support from community organisations and trade unions for a rise in Newstart is not really that surprising, there have been voices of support that have been much more unexpected. These voices include the former prime minister John Howard, who has stated that there should be a rise in Newstart.

As I have stated in this place previously, leading economist Chris Richardson from Deloitte Access Economics believes there should be a $50 a week increase in Newstart. He believes that fixing the unnecessarily cruel dole payments is a more urgent priority than budget repair. He stated: 'We make trouble for ourselves if we let the poorest of the poor get poorer.' The Business Council of Australia is also supportive of raising Newstart, with the chief executive, Jennifer Westacott, stating:

You can not live on $39 a day.

We really have to get our head around this, but not just in terms of tinkering with the allowance. We've got to make sure that allowance is adequate…we've got to make sure the programs are there, the literacy programs, the numeracy programs, that the jobs services networks are doing their jobs properly.

A lot of these people are shockingly disadvantaged.

The National Centre for Social and Economic Modelling released an analysis this week showing recipients of Newstart are five times more likely to be living in poverty than other fellow Australians. I offer the chamber a couple of testimonies from Newstart recipients, who wrote to my former council, the Port Adelaide Enfield council, recently about their difficulties living on Newstart. First, there is a resident known as Brendan. Brendan writes:

It [Newstart] is simply too low to live on. For the individual, the low rate of Newstart creates a serious hindrance to finding work and remaining ready for work, while for the economy as a whole, it is a needless brake on consumer demand.

We have fallen victim to the delusion that unemployment payments need to be punitively low in order to motivate people into work, and people are hurting because of it.

Finally, Brendan adds this:

As unemployed workers our health, our dignity, our ability to be and remain part of a community, our ability to find employment, all of these things are slowly eroded by the drastic inadequacy of Newstart, making unemployment a much greater blight on an affected area, and increasing the risks of homelessness and crime.

Then there is Catherine, who writes:

My rent costs $230 per week, I get $40 per week rent relief leaving only $77.00 for food, bills and other living costs. Obviously, I cannot cover my basic living costs with only $77 and resort to utilising my credit cards in order to get by. This is a vicious cycle.

When I do get employment, I try to pay off the credit cards, however as you are well aware the interest rates, the ever increasing power and gas costs, insurance, car registration, phone and wi-fi costs, along with the sporadic nature of work opportunities, I find this impossible.

I rarely buy new clothes or even second-hand clothes. I avoid using my gas heater in winter. I have skipped meals, and I utilise my credit card to pay medical bills and dentist costs. Occasionally I lash out and join my friends for a meal out (using my credit card) knowing that it will only add to my increasing debt. However, I figure this is important for my mental health, networking, social health and ultimately my ability to be in good mind and spirit for job seeking.

I take this opportunity to thank the Anti-Poverty Network for its advocacy in this area. Its chief spokesperson, Mr Pas Forgione, has been doing a great job getting out to various local councils and community groups to promote this very important area of public policy. I commend this motion to the council.

Debate adjourned on motion of Hon. D.G.E. Hood.