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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-09-19 Daily Xml
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Newstart Allowance

The Hon. T.A. FRANKS (16:16): I move:

That this council—

1. Notes that Newstart, at $269.40 per week for a single person with no children, is significantly below the poverty line of $426.30 a week, as defined by the ACOSS Poverty in Australia Report, 2016;

2. Acknowledges the 13 South Australian councils that have called for Newstart to be raised: Port Adelaide Enfield, Streaky Bay, Salisbury, Playford, Onkaparinga, Mount Gambier, Kangaroo Island, Elliston, Copper Coast, Clare Valley, Prospect, Tea Tree Gully and the Adelaide City Council;

3. Commends the work of the Anti-Poverty Network in raising these issues at all levels of government, it not being just a federal issue; and

4. Calls on the federal government to increase the level of Newstart as a matter of urgency.

I would like to acknowledge that there are members of the Anti-Poverty Network with us, watching from the gallery today. The Anti-Poverty Network has shown considerable and remarkable leadership in spearheading a campaign and raising the issue of poverty to all levels of government. I would also like to acknowledge those 13 South Australian councils that have called for Newstart to be raised, doing what councils should do and standing up for their communities.

It is now time that the federal government took leadership in raising the level of Newstart to ensure that Australians need no longer live below the poverty line. Hard times can befall any of us and every South Australian should have the real support that they need, when they need it—the support they need to pay the rent on time, to be able to afford to put food on the table and to keep the lights on. This is the kind of support that an income support scheme such as Newstart should provide, but instead of real support, the current levels simply condemn our most disadvantaged to live in poverty.

It is true that only the federal government can raise Newstart, but in the absence of leadership at a national level, the duty to speak up for those suffering disadvantage falls to all of us. Local councils have started to pick up this slack, speaking up for their residents and taking a stand for those in desperate need of financial relief. For those who would say that the councils should stick to the Rs (the rates and the rubbish), I should point out that it is not just roads, rates and rubbish, but it is, indeed, residents that those councils are there to represent—two more Rs for those councils.

This is not the first time I have brought such a motion before this parliament, but I certainly would hope that it could be the last because it would become redundant. We like to think of ourselves as a lucky or a wealthy country but that luck and that wealth is not distributed fairly. We still find ourselves with over 800,000 people, including parents, carers, people with disability, and other people locked out of paid work as well as students, all struggling daily to afford the very basic essentials like a roof over their heads and food on their tables.

Our politicians like to boast about our many years of economic growth; yet along with this the gap between the rich and the poor has widened and Newstart has not increased in real terms for over 24 years. Beyond the rising cost of living and the failure to raise Newstart we know that people living in poverty end up having to pay what is called a poverty premium. It has been documented by the South Australian Council of Social Services most recently.

For example, let's look at the cost of Internet data, something that is vital for participation in society today. It is particularly necessary of course for those looking for work. Internet data is more affordable if you have a home Internet plan; however, if you are homeless your only Internet connection might be via your phone which is a 328 per cent poverty premium price to you. Or, let's look at bank dishonour fees which are much more likely to apply and accumulate for those on low incomes, or household bills and electricity prices. Most energy companies offer discounts for customers who pay on time. If you do not have the money upfront then you can pay up to 28 per cent extra on your power bills. I am sure it is not hard to see how these extra costs disproportionately affect those living below the poverty line.

Australia's social safety net is something most of us contribute to and most of us benefit from at different times in our lives. This safety net should allow people to afford a roof over their head and food on the table, but that current rate does not even cover the costs of basic essentials, and every day people are making tough choices: do they pay for rent, their food, their bills or their medication?

For Newstart recipients, who account for 84 per cent of recipients of all those allowances, a $75 a week increase would be a 27 per cent increase in the current base rate. That sounds like a large increase but given the last real increase in Newstart was more than 20 years ago and it was then only $2.95 a week, a substantial increase is well overdue. Such an increase would be roughly equivalent to the real increase in the average wage in South Australia over the last two decades and it would still be much less than increases in the age pension which have been necessary to keep many of our older Australians out of poverty.

Of course, for those who are unconvinced by the social arguments, perhaps let us talk about numbers. A recent study undertaken by Deloitte on behalf of SACOSS found that South Australia's disposable income would increase by $208 million if the federal government's Newstart and Youth Allowance income support payments were raised by that $75 a week. Consumption would increase by $330 million, and economic output would increase by $123 million in 2018-19. It should come as no surprise that that is indeed why the Committee for Economic Development of Australia (CEDA) has recently also come out in support of the 'raise the rate' campaign stating that parliament needs to catch up to community expectations, and that CEDA is supporting that $75 a week increase as well.

If none of the stories that we have all heard no doubt of the impossibility of surviving on Newstart payments is enough to convince members in this place that we must lobby our federal colleagues and the federal government, then surely those economic arguments might be heard. It is disgusting that we continue to punish those who cannot work or want to work but cannot find a job or need more work than they have, with the absurd ideas that there are 'deserving' and 'undeserving' poor. It demonstrates an appalling lack of compassion and understanding for those in our community. However, 55 per cent of those on Newstart are living below the poverty line.

Brendan Runn, who is now the KPMG Chief Economist, previously stated that the low level of Newstart is actually forming a barrier to employment as it is insufficient to allow unemployed people to actively search for jobs. We punish people when they are not in work, and yet there is only one job available for every eight people looking for paid work or more hours. The failure of successive federal governments to address the inadequacy of these payments is a national shame and it is our responsibility as state parliamentarians.

There is no doubt that we need to raise the rate of Newstart. We need to look beyond the current status quo and forget the idea that this is a dog-eat-dog society where people are pushed into poverty by necessity. We need to do better and aim higher. The goal should be for every Australian to live with dignity in a state we would be proud to have our friends and family also live—in a state that we here represent. With those few words, I commend the motion.

Debate adjourned on motion of Hon. T.J. Stephens.

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