Liberal MP Julia Banks says she could live on $40 a day dole

A welfare recipient has challenged Liberal MP Julia Banks to test her claim that she could live on $40 a day.

Julia Banks claims she could live on the less than $40 a day dole. Picture: AAP.

Liberal backbencher Julia Banks says she could live on the less than $40-a-day dole payment, and a welfare recipient has challenged her to do so.

The former lawyer and businesswoman, a child of Greek immigrants, made the pledge on ABC radio in Melbourne yesterday, following calls from economist Chris Richardson, Business Council of Australia boss Jennifer Westacott and the welfare sector for the payment to be increased.

Opposition Leader Bill Shorten yesterday said he could not live on $40 a day and did not believe other parliamentarians would be capable of doing so, calling for a review of welfare payment levels.

Ms Banks was asked by radio host Rafael Epstein yesterday whether she could live off the dole payment.

“I could, I could live on $40 a day knowing that the government is supporting me with Newstart to look for employment,” she said.

Challenged on whether she was “out of touch”, as one talkback caller claimed, Ms Banks said: “I’m certainly not.”

“I speak to constituents every day, and all I can say is the dignity of having a job and finding work is what our policy is about,” she said.

Hobart Youth Allowance recipient Sherri Prendergast, 22, challenged Ms Banks to try living on the same amount she does.

“It kind of makes me wonder when was the last time that she was living off of $400 a fortnight,” Ms Prendergast told ABC radio this morning.

“I reckon she could give it a go.

“If you make more money than what people on Newstart are getting, I’d challenge people to do it, see what it feels like.

“I kind of hope that somebody in that kind of a position really does learn what it’s like.”

The maximum fortnightly Newstart payment is $545.80 for singles with no children, while the maximum fortnightly Youth Allowance payment for single, childless 16 to 24-year-old students living away from their parents to work or study is $445.80 — amounting to $38.99 a day for Newstart recipients and $31.84 a day for those on Youth Allowance.

This compares with a full aged pension rate, including the pension supplement and energy supplement, of $907.60 per fortnight for singles.

Australian average weekly earnings after tax in November 2017 were $2,456.20 per fortnight.

About a million Australians receive either Newstart or Youth Allowance.

Ms Prendergast told the ABC she had been attained certificates in business management and first aid during six years on Youth Allowance, and is currently getting her Responsible Service of Alcohol ticket as well as volunteering with a homelessness service.

She said she was luckier than others, because she lives with her sister, who charges her $100 a week, or almost half her income, in rent.

“The first week you find you normally have enough to do what you need to do, but the second week is usually like hell,” she said.

She said she prioritised food first, and then expenses such as her prepaid phone.

“You have to pre-plan if you need to get credit, and if something shows up out of nowhere like a job interview, or something like that, if you haven’t organised for that, you can’t do it. It’s out of the question,” she said.

Medical bills were also a significant expense.

“I have anxiety and depression and I’m medicated for both of them, and I’ve definitely had weeks and months when haven’t been able to afford it,” Ms Prendergast said.

“I also have asthma and I’ve had to go without Ventolin because I haven’t had the money that fortnight.”

‘I’ve been calling for a Newstart increase for years’: BCA boss

BCA chief executive Jennifer Westacott said she had been pushing for an increase to the Newstart payment “for years”.

“I’ve been talking about this for years, that you cannot live on $39 a day,” she told ABC radio.

“I said in 2011 you can’t live on $35.

“We really need 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, but we’ve also got to do other things, like this effective marginal tax rate when people going from being unemployed to working, we’ve got to make sure that the programs are there: the literacy programs, the numeracy programs, that the job services networks are doing their jobs properly. I mean a lot of these people are shockingly disadvantaged.”

Leading economist Chris Richardson this week said fixing “unnecessarily cruel” dole payments should be a more urgent priority than budget repair.