Coronavirus: welfare groups want more spending to safeguard people on low incomes

Welfare recipients and holders of the commonwealth seniors health card or veteran’s gold card will start receiving a $750 payment from March 31.

ACOSS chief executive Cassandra Goldie said investment in public infrastructure, particularly in social housing construction, ­support for frontline community service organisations and an ­increase to Newstart by $95 a week would create jobs and ­reduce homelessness.

About 6.5 million Australians — including nearly 3.7 million pensioners — will be given $750 one-off payments under the Morrison government’s coronavirus stimulus package but seniors and welfare groups say the money does not go far enough in helping ­people on low incomes.

Welfare recipients and holders of the commonwealth seniors health card or veteran’s gold card will start receiving the money from March 31, with more than 90 per cent of payments to be made by mid-April in an attempt to assist households, bolster economic confidence and stave off a ­recession.

Josh Frydenberg urged Australians to use the money on “things that matter most to you”.

“Whether that is going out for a meal or buying a TV, getting something for your kids … discretionary or non-discretionary items, spend it as you see fit,” the Treasurer said.

He said more economic activity in the June quarter would be particularly important, as the government tries to prevent two quarters of negative growth — the technical definition of a recession.

“In the June quarter, just as we’ve seen in the March quarter, the spread of the coronavirus … has had an impact across the economy,” Mr Frydenberg said.

“It has disrupted end-to-end supply chains. It’s obviously had an impact on the tourism sector, on the international education sector and more broadly.”

Australian Chamber of Commerce and Industry chief executive James Pearson said there would be a knock-on effect in the under-pressure retail sector.

“This payment is targeted at those on low disposable incomes that are the most likely to spend any increase in income immediately. It will give them the ­confidence to spend rather than save their money,” he said.  While the measure, which will cost the government $4.8bn this fin­ancial year, was welcomed by key stakeholders as providing short-term relief for people on low incomes, the Australian Council of Social Service said more was needed to safeguard people and the economy. ACOSS chief executive Cassandra Goldie said investment in public infrastructure, particularly in social housing construction, ­support for frontline community service organisations and an ­increase to Newstart by $95 a week would create jobs and ­reduce homelessness.

 

Council on the Ageing chief executive Ian Yates said the temporary payments would help age pensioners and Newstart recip­ients with buying essentials but the money did not replace the ­“urgent need” to permanently raise New­start.

“A one-off payment is a welcome temporary relief, but it’s only 10 weeks’ worth of the at least $75 a week COTA is calling on the government to permanent raise the Newstart rate by,” Mr Yates said.

Anthony Albanese accused the government of previously rejecting cash handouts but said it was a good thing more money would be going into the pockets of pensioners and the unemployed.

Under its global financial crisis stimulus package, the Rudd government gave $900 bonus cheques to Australians with taxable incomes of up to $80,000.

There was also $4.8bn for pensioners, $3.9bn for families and $1.5bn for first-home buyers.

Australia Institute senior economist Matt Grudnoff said the $750 payment was the “most effective part” of the Morrison government’s $17.6bn coronavirus stimulus package, as people “living on the brink” spend any extra money they received on essentials.