Research Suggests Significant Benefits to Raising Welfare

Raising Newstart and Youth Allowance would create jobs, raise wages and significantly boost regional economies, new research suggests, as the Greens ramp up their efforts to increase the payments by $75 a week.

The report from Deloitte Access Economics said regional communities would receive a multi-million dollar boost through increased consumer spending if these welfare payments were raised.

A $75 a week increase to Newstart and Youth Allowance would cost the budget $3.3 billion a year, but the report said it would create 12,000 new jobs by 2020-21 and lift wages.

Researchers noted Australia had very low Newstart payments, at the same time it had high wages and high minimum wages compared with other countries in the OECD.

“That combination tells you that the underlying causes of long term welfare dependency are a larger and more complicated policy and societal failure,” the report said.

“Yet that doesn’t diminish the point that the existing rate of working age payments are too low.”

The Australian Council of Social Service (ACOSS) – which commissioned the report – said the research confirmed what was already known.

“Raising the rate of Newstart and related payments will help hundreds of thousands of people struggling to put a roof over their head and food on the table with an income of less than $40 per day,” ACOSS CEO Dr Cassandra Goldie said.

“More than two thirds of people support an increase to Newstart, as do all the leading charities, community organisations, the Committee for Economic Development, Deloitte Access Economics, KPMG, Australian Industry Group, and the Business Council of Australia.”

Dr Cassandra Goldie and Chris Richardson talking about the benefits of raising the rate of Newstart and Youth Allowance. Good for people. Good for the economy. Absolutely necessary for social justice. #raisetherate #auspol pic.twitter.com/arqUUQJWDa

— ACOSS (@ACOSS) September 17, 2018

Around 770,000 Australians receive $39 a day on the Newstart or Youth Allowance payment – which is little more than half of what someone working full-time on the minimum wage earns.

The Greens currently have a bill before Parliament that would increase these payments by $75 a week, and Senator Rachel Siewert used the latest research to again call for support.

“Newstart hasn’t been increased since 1994 – this is a significant policy failure by successive governments that must be urgently fixed,” Siewert said.

“We have the opportunity to get it done when my bill is debated in October – what are we waiting for?

“In a wealthy country such as ours, no one should be living in poverty, struggling to put food on the table and it is beggars belief that Labor and the Coalition refuse to do anything about it.”

The federal government has constantly refused to support an increase to the payments, with then-Treasurer Scott Morrison telling the National Press Club in May that Newstart was “not intended to be a payment you live on”.

“It supports you while you get yourself back into work,” Morrison said.

“Our priority is to provide tax relief for working Australians and ensure we create a stronger economy so we can provide those people not in work with the best form of welfare… which is a job.”

.@MichaelKeenanMP says the government will not consider raising the Newstart allowance.

‘We consider Newstart to be a transitional payment.’

MORE: https://t.co/ykweMevBOK #newsday pic.twitter.com/6RSrbvonFx

— Sky News Australia (@SkyNewsAust) September 18, 2018

Labor has also refused to commit to a payment increase, but rather has promised to undertake “a root and branch review” of welfare payments if elected.

Responding to the report, Labor MP Jim Chalmers said: “We’ve made our position very clear that Newstart is too low in this country. What we want to do is go about it in a very responsible and considered way in government… to see what, if anything, can be done about it.”