Newstart Recipients Living on $17 a Day After Accommodation Costs

The Salvation Army has urged the federal government to raise the level of Newstart, after new research revealed the average recipient was living on just $17 a day after accommodation expenses.    

The charity’s 2018 Economic and Social Impact Survey (ESIS) examined 1,267 people using Salvation Army services.

Released on Wednesday to coincide with the Salvos Red Shield Appeal, the survey found that after accommodation expenses, Newstart recipients had just $17 per day to cover all other living expenses including food, bills, transport and health.

Of the people who access our services, more than 90% of households with children use over half of their income to pay housing costs, which doesn't leave much for even the basic necessities of life. To read the findings of our research, go to https://t.co/zf0Qmwhxl7. pic.twitter.com/8BiCxMYFbS

— Salvos Australia (@salvos) May 23, 2018

The Salvation Army’s Major Paul Moulds said the research confirmed that the federal government’s decision not to raise Newstart in the budget had failed vulnerable Australians.

“It is simply inhumane that corporations and wealthy households are handed a tax cut, while the most disadvantaged and marginalised people in this country continue to be ignored,” Moulds said.

“It is widely acknowledged it will take a minimum increase of $75 a week just to ensure people can live on the poverty line – let alone above it.”

Newstart has not been raised in real terms for 24 years, and respondents to the survey expressed the hardship this had caused them.

“The bills keep getting higher and my income hasn’t increased… things feel impossible [and the] financial stress is making me lose unhealthy amounts of weight, I feel like I’m stuck in a rut,” one respondent said.

Another added: “I just can’t afford to pay anything. I can’t afford to pay my energy bills. I have to go to charities for those. A lot of the time I’m hungry because I can’t afford to buy food. Sometimes it’s food or petrol.”

Moulds said the inaction of the federal government had put further pressure on the charity to help families make ends meet.

“With increases in the cost of living, we see people going without medication, skipping meals and adequate winter heating because they are caught in the cycle of poverty,” he said.

After paying rent expenses, Newstart recipients are surviving on just $17 a day.
That's $17 a day for:
– groceries
– bills
– clothing
– transport
– medical expenses
– emergencies

Any comments on this @juliabanksmp?https://t.co/8z677rLQdh

— GetUp! (@GetUp) May 23, 2018

The survey also found that 90 per cent of households with children experienced extreme housing stress, spending more than half of their income on housing.

Added to this, more than two out of five households with children had experienced food insecurity and were unable to afford either three meals a day, daily fresh fruit or vegetables, or at least one meal a day with meat or a vegetable equivalent.

Australian Unemployed Workers’ Union spokesperson Jeremy Poxon, told Pro Bono News he welcomed this research, especially in light of recent political debate about whether people could live on the $38.99 a day received by Newstart recipients.      

“We’re really glad to see that they’ve done this research, because this idea of living on $40 a day was almost treated by some in the media and especially by politicians as an extra bit of pocket money on top of housing and other expenses,” Poxon said.

“It’s great to see the Salvation Army and lots of other civil society organisations trying to show the picture a little bit more. Because it’s not just living on $40 a day, when you consider how much that money gets eroded away by basic living costs.”

Treasurer Scott Morrison recently defended the decision to maintain the welfare payment freeze, noting that Newstart was not intended to be a payment you live on, but rather a payment “while you get yourself back into work”.

But Poxon said the common government rhetoric of “the best form of welfare is a job” did not reflect reality.

“This battle has been going on a long time and it’s not just the Coalition, it’s both sides of government which operate under this false logic and fantasy that the thing that’s keeping unemployed people out of work is their own individual motivation,” he said.

“Again and again we have to educate the public, as well as our political class apparently, that the actual main barrier to people being able to find work is the [lack of] jobs that exist in our economy.

“The majority of people on Newstart have been locked out of the labour market, locked out of the economy, and instead of giving them a helping hand and a decent payment we are [punishing] people.”

The AUWU will be holding a rally outside Julia Banks’ Melbourne office this Friday, after the Liberal MP controversially claimed she could live on $40 a day “knowing the government is supporting me”.

Unemployed workers will present Banks with their Newstart budgets, and ask for tips on how to survive on $40 a day.

Poxon said this type of grassroots action was necessary to try and turn the political tide on welfare payments.

“We can’t really wait for things to change from a top down level. These are our lives. We’re struggling,” he said.

“So a lot of the advocacy work we’re doing is literally trying to organise and mobilise unemployed workers and welfare recipients to tell the whole story.

“Obviously there’s a lack of visibility and we are usually relegated to the margins of political and public debate… so on Friday we’re trying to mobilise that energy into a grassroots awareness building campaign.”

The Australian Council of Social Service (ACOSS) has long called for Newstart to be raised by $75 per week and CEO Dr Cassandra Goldie said the tide of support was slowly turning their way.

“[On Wednesday], the Salvation Army renewed their calls for an increase to Newstart. These calls are backed by former prime minister of Australia John Howard, author and lecturer Jane Caro, the Council of Small Business, Chris Richardson from Deloitte Access Economics, Heather Ridout AO from Australian Super, Dr Ken Henry from the ­National Australia Bank, and Jennifer Westacott from the Business Council of Australia,” Goldie said.

“A minimum increase of $75 per week to Newstart and related payments will help people struggling to afford three meals a day cover the cost of essentials such as a roof over their head, transport, bills and clothing.

“Newstart is currently just $278 per week. This and related payments have not increased in real terms for 24 years. It is near impossible to look for work or study if you’re homeless and hungry.”

New survey of 1,267 people who call on @Salvos services finds the average person receiving #Newstart is living on just $17 a day after accommodation expenses – https://t.co/ZCak6jwwQH

It's time to #RaisetheRate https://t.co/57uEV40nEE pic.twitter.com/hA2QTjF7OP

— ACOSS (@ACOSS) May 22, 2018

Greens Senator Rachel Siewert, who recently put forward a motion to raise Newstart in line with ACOSS recommendations, said these latest findings should not be ignored by the government or the Labor Party.

“Government MPs should try living off the rate of Newstart for at least a week, let’s see if they are so confident about lecturing job seekers on how the payment is sufficient once they have given it a crack,” Siewert said.

“Bill Shorten’s Labor Party needs to get off the fence and commit to increasing the payment if elected. We have a breadth of research and a range of economists and social service organisations saying it is far too low. We do not need another review to know that the payment is too low, it is well established.

“I urge both the old parties to support my bill that would increase the rate of Newstart by $75 a week. It is well overdue and would help jobseekers find work whilst injecting money into the economy as job seekers use the additional support on goods and services.”