New Budget Standards Show Australia’s Social Safety Net is Inadequate

Australian jobseekers relying on unemployment benefits cannot afford a basic standard of living, according to a new report, which is giving rise to calls from the social sector for an immediate increase to Newstart.

The report, compiled by UNSW’s Social Policy Research Centre (SPRC) and supported by Catholic Social Services Australia (CSSA), the Australian Council of Social Service (ACOSS) and United Voice, aimed to produce a new set of budget standards for low-paid and unemployed families that were relevant to contemporary Australian conditions.

Researchers behind the New Budget Standards for Low-Paid and Unemployed Australians Report calculated baskets of goods and services for a range of living situations, working out the Minimum Income for Healthy Living (MIHL) to ensure both material and social needs were met.

Among the findings, released on Wednesday, it showed Newstart Allowance fell short of the minimum income required for a basic standard of living.

According to researchers, for a single person on Newstart the allowance needs to rise by $96 a week to meet the identified budget standard, with a rise of $58 a week for a couple with one child and $126 a week for a couple with two children.

The report has sparked calls from the social sector to use the new budget standard measurements to set welfare payments in the future, amid claims current levels of income support for low-paid and unemployed Australians are inadequate.

ACOSS CEO Dr Cassandra Goldie said people on low incomes were living in “emergency conditions”.

“Single people receiving social security are struggling to live on incomes nearly $100 a week below the budget standard. For a couple with children it’s $126 a week below. Such low rates of payments deny a family and their children the most basic standard of living we expect for each other as human beings,” Goldie said.

“It is vital that government immediately increase Newstart to help alleviate the dire levels of poverty we’re seeing as a result of our failure to increase the basic rate of working-age social security payments in more than 20 years.”

Professor Peter Saunders, who led the research, said the findings suggested a change was needed in how Newstart levels were determined.

“Newstart levels are currently set at the discretion of the government,” Saunders said.

“But the evidence presented in this study suggests that a mechanism similar to the minimum wage, which is set independently, would ensure that income floors are maintained at an adequate level as circumstances change.”

CSSA CEO Fr Frank Brennan said the organisation had been advocating since the last federal election for the establishment of an independent commission to advise government on the appropriate level of welfare payments to ensure people can have access to basic requirements.

“A safety net that doesn’t provide enough income for a family to have even a minimum adequate standard of living, is no safety net at all,” Brennan said.

“Low household income is a central factor in shaping individual and family life opportunities.

“How can people be expected to present at job interviews or take part in educational opportunities to increase their chances of securing employment, when they are forced to continually focus on how they will keep a roof over their heads and have enough money to eat?”

The report also raised questions about whether a single, standardised national safety net was meaningful, suggesting a safety net that better reflected variations in housing costs depending on where people lived, could deliver more equitable outcomes.

According to the report the largest single cost to family budgets was housing, which in all family types exceeded the 30 per cent benchmark that identifies families facing housing stress.

Other than housing, the largest areas of the family budget were food, household goods and services and transport.