Does anyone in Australia think Newstart is adequate?

Last night Treasurer Josh Frydenberg gave us another crackdown on welfare recipients: the government says it will save around $2.1 billion over five years through data-sharing so that welfare recipients who work will report their income as they earn it, thus avoiding overpayments. Further, Newstart recipients were to be excluded from the government’s $75 one-off energy assistance payment — a move so unpopular it was abandoned within 10 hours. 

As has been already observed, last night’s budget was the 25th without an increase (in real terms) to the Newstart unemployment benefit. Today, the payment stands at around $40 a day.

Such a longstanding bipartisan stance on any policy is rare. Leaving aside those bleeding hearts at the Australian Unemployed Workers Union and the Australian Council of Social Services — who, as you would expect, favour a lift to the rate — it’s worth looking at where the community and interest groups are at on this one. Is the payment adequate as it stands?

Yes!

Scott Morrison: Despite the mild concession on the energy payment, the Prime Minister reiterated on ABC’s News Breakfast that the payment would not go up, saying that recipients are not supposed to stay on Newstart in the long run. “What we’re doing is getting those people in record numbers who are on Newstart into jobs — that’s the best form of welfare,” he said. Morrison pointed out that the payment goes up (thanks to indexing) twice a year. Which is true — and last September it increased by $2.20 a week. 

Well, who’s to say?

Bill Shorten: The opposition leader has been strangely equivocal about Newstart. He’s admitted that no one in parliament could live on that amount, and has promised a “root and branch review” of the program in the first term of a Shorten government. But, for reasons no one can quite fathom, Labor has as yet refused to firmly commit to an increase.

No

Business Council of Australia: The BCA are by no means a particularly progressive organisation — but they have been saying, for years, that Newstart is too low. Chief executive Jennifer Westacott wrote in the The Weekend Australian in September 2017:

I’m proud to have called out the inadequacy of the Newstart unemployment allowance which, at only $38 a day for single people, has itself become a barrier to effective jobseeking. The objective of welfare reform should be to ensure the right incentives and training programs are in place so people can get into the workforce as quickly as possible and stay employed.

She called last year’s budget a “a missed opportunity to do something on Newstart”.

John Howard: Seemingly the last conservative to actually be able to get anything done, Howard told the PricewaterhouseCoopers post-budget breakfast last year the rate should be raised.

I actually think there is an argument about that, I do. I was in favour of freezing that when it happened, but I think the freeze has probably gone on too long.

Arthur Sinodinos: Gently and equivocally, the New South Wales senator and influential Liberal argued the payment should be raised on Q&A this week:

Over time [Newstart] should be higher. That’s probably a slightly radical thing for me to say here … but my observation is this does raise an issue that should be considered at some stage.

All of South Australia: Late last year, a South Australian parliamentary inquiry into poverty made the recommendation — endorsed by Liberal, Labor, Greens and SA Best MPs — that the federal government make an urgent increase to Newstart:

The committee agrees with the overwhelming majority of submissions to the inquiry that the Newstart allowance is far too low and falls well short of the state-based poverty line.The committee calls on the federal government to make a meaningful increase to the rate of the Newstart allowance (and other base allowances) as a matter of urgency.

Deloitte: The relatively conservative account and audit firm still believes “unnecessarily cruel” dole payments are a more urgent priority than budget repair.

“It is our standout failure as a nation,” Deloitte Access Economics senior partner Chris Richardson said in May last year. “I’m a longstanding campaigner for budget repair, but I would rank it behind the need to lift unemployment benefits in Australia.”

Further, their modelling shows raising unemployment benefits by $75 a week would bring higher economic growth and employment over the long-term. 

Have you lived on the Newstart payment? Share your experiences: boss@crikey.com.au.