Is the Newstart allowance enough to live on?

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Source: The Conversation.

The Newstart allowance is too low. That’s the word from politicians all over the political spectrum, including Pauline Hanson, Barnaby Joyce and even former Prime Minister John Howard. But it’s not an opinion shared by Prime Minister Scott Morrison, whose response has been “the best form of welfare is a job”.  

The Newstart allowance, given to those unemployed but looking for work, is currently set at $277.85 a week – less than $40 a day. Around 40 per cent of those on Newstart also receive rent assistance. However, Australian National University Professor Peter Whiteford found that, when comparing unemployment payments with average wages in each of the OECD’s 36 member states, Australia’s contribution to the unemployed is dead last. This can be attributed to the fact that, unlike unemployment benefits in most OECD nations, Newstart increases are not tied to wage increases – instead, they are tied to inflation, meaning Newstart lags behind other payments such as the pension.

OECD comparison by Peter Whiteford.

The Prime Minister has remained adamant that there will be no increase to Newstart payments, however. Mr Morrison pointed the finger at Labor members who advocate a review of Newstart payments in August, suggesting Labor was not being upfront with how much an increase would cost taxpayers.

“If the Labor Party thinks it should be increased, well tell us how much, and how you’re going to pay for it, and what’s going to change,” the Morrison said in a 7 News interview.

Obviously, the issue seems divisive in the political world. But I was curious how people in my local community of Bacchus Marsh felt about the issue, so I went out on the street to investigate.

There was a clear consensus that Newstart payments had to be increased. One man was unaware of what Newstart was and how much payments were, but when it was explained to him that payments were less than $40 a day, he was stunned.

“Terrible. Absolutely terrible. Not enough to survive on. (It should be) roughly at the minimum wage I reckon, to survive,” he said.

Other Bacchus Marsh residents echoed similar sentiments. Sandra, a storeowner who has been forced to live on Newstart in the past, said it was tough.

“It’s not a lot for somebody to survive on. For everyday living, petrol … that’s not gonna get very far, no,” she said.

“It (Newstart) did help me a lot because I was getting that as a top-up with my wage, being a single parent … but they were just very dicey. The minute I’d go over a certain amount, that’d be it, they’d cut me off the system. It helped me, but it wasn’t a lot.”

It seems the main argument for an increase in Newstart payments, then, is how inadequate $277.85 a week is to live on. On the other side of the coin, Morrison and his supporters would argue against the extra cost to the budget, and the potential disincentive an increase to unemployment benefits would be to the unemployed going out and finding a job.

Nevertheless, the debate has been prominent in the Australian political sphere for months, and with the Prime Minister’s steadfast refusal to increase Newstart payments, it’s a debate that may continue for months or even years to come.

 

 

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