‘Utterly shameful’: Renewed push to raise unemployment benefit

Leaders across the political spectrum have joined a renewed push to raise one of the country’s most contentious welfare benefits.

Leaders across the political spectrum have renewed their push for an increase to Australia’s unemployment benefit, with yet another Coalition figure breaking ranks to reject the government’s official position.

The Newstart Allowance has not risen in real terms for 25 years, going back to the mid-1990s. Jobseekers currently receive $555.70 per fortnight, or just under $40 a day.

Activists have repeatedly pressed for a $75-per-week increase to the payment. And as Australia’s politicians descended on Canberra for the resumption of parliament this morning, Greens Senator Rachel Siewert again spoke in favour of legislating that rise.

RELATED: Deloitte report recommends Newstart increase

“The current rate of Newstart and related payments is so low that people are unable to cover basic living costs, such as housing, food, transport, healthcare and utilities,” Ms Siewert said.

“This is unacceptable. In a wealthy country like Australia, no one deserves to be living in poverty.

“I find it utterly shameful that Australia has the second-worst poverty rate among unemployed people in the OECD.”

Ms Siewert said the problem was disproportionately affecting single parents — particularly women — and their children.

“We know that poverty can act as a barrier to finding work. By keeping payment rates below the poverty line, Newstart is doing the opposite of what it’s meant to do,” she said.

It is also increasingly plaguing people over the age of 45, who now make up 43 per cent of dole recipients and face the spectre of ageism in their struggle to find work.

“Instead of being able to live with dignity, older Australians on Newstart are pushed into poverty long-term, having had to use up most of their savings before they can apply for Newstart,” she said.

Greens Senator Rachel Siewert. Picture: AAP/Sam Mooy

One Nation leader Pauline Hanson also expressed support for raising Newstart today, though she was conscious of the potential cost.

“Yes, I do,” Ms Hanson said when she was asked whether she supported an increase.

“There’s talk about $75 a week that needs to be raised. I think that needs to be addressed, and it also needs to be costed. Can we afford it? That’s another thing too.”

But the crossbench alone will never have the numbers to legislate a rise in the rate — and neither major party has been particularly cooperative.

Labor acknowledged Newstart was “too low” during the election campaign, but would only commit to a review.

Meanwhile, the Coalition has long been staunchly opposed to a rise.

“You can’t just wave a magic wand and give welfare recipients a few more dollars and say you’ve fixed the so-called poverty trap,” Liberal Senator Wendy Askew said today, rebutting Ms Siewert.

Senate leader Mathias Cormann told ABC radio the payment was “transitional”.

“Most Australians who are on Newstart Allowance are on that payment for a very short period,” Mr Cormann said.

Data from the Department of Social Services shows the average time people receive the payment is 156 weeks.

Treasurer Josh Frydenberg has previously argued that Newstart recipients often receive other government benefits as well.

Mathias Cormann. Picture: Kym Smith

But a small group of Liberal and National MPs, including Barnaby Joyce, Arthur Sinodinos and Matthew Canavan, have recently diverged from the party line and publicly supported an increase.

“If someone’s on Newstart in a town like Woolbrook, it’s going to cost you $50 to go to Tamworth to do the groceries or to go to a job interview,” Mr Joyce said last week.

“They live in those places because the rent’s cheap, but the rent’s cheap because it’s a long way from the services.”

Dean Smith, a Liberal Senator from Western Australia, added his name to the list today.

“I am someone who believes the Newstart Allowance amount must be more than reviewed, which was Labor’s lame position. It should be increased,” Mr Smith said.

Former Liberal prime minister John Howard and Reserve Bank Governor Philip Lowe have also backed the idea.

Labor’s position is still complicated, though Senator Pat Dodson was perhaps the most passionate speaker in support of raising Newstart in the Senate today.

“Newstart is trapping people in poverty,” he said.

“The refusal of the PM to even acknowledge the seriousness of this problem appears very cruel and heartless. We’re talking about vulnerable human beings.

“How do they expect people to find work if they can’t afford a haircut, or new shoes, or a decent shirt? And how are people meant to get to an interview if they can’t afford to keep a car on the road or get public transport.

“The current rate of Newstart is simply not enough to live on, and the government must increase it.”

Labor Senator Pat Dodson. Picture: AAP/Mick Tsikas

Last year a report by Deloitte Access Economics found raising Newstart would have a range of “prosperity effects” and lead to 12,000 more people being employed by the 2020-21 financial year.

Deloitte concluded the allowance had not risen in line with national living standards for a quarter of a century, because it was indexed to prices rather than wages.

“Newstart has shrunk as a share of average wages, median wages, the minimum wage and the age pension,” it said.

The report was commissioned by the Australian Council of Social Service, which has long lobbied for an increase.

Deloitte modelled the impact of increasing the Newstart, Austudy, Sickness, Special Benefit, Widow and Youth allowances by $75 a week. That would cost the federal budget $3.3 billion each year.

When the report was released, chief economist Chris Richardson told 2GB the cost was worth it.

“In Australia, we have one of the highest minimum wages in the world and relative to that, one of the lowest unemployment benefits in the world,” Mr Richardson said.

“If people are worried, are we being tough enough on the unemployed, we are compared to every other nation. And the gap keeps growing.”