In the years since I joined Anglicare Australia, much has been said about the need to raise the rate of Newstart.
There was the Henry Tax Review, which called for a boost to Newstart back in 2010.
Months later it was the OECD. They called our abysmally low Newstart payment an outlier in the developed world.
By 2011, the Business Council of Australia joined the chorusline. They said the payment was making it harder for people to look for work.
Fast forward another year. The Senate started an inquiry on unemployment payments, which agreed that Newstart was failing to provide an ‘acceptable’ standard of living. In fact, every single business and community group that was part of the inquiry wanted an increase.
I will spare you the full year-by-year list. Needless to say, the past decade has seen State and Territory governments, inquiries, reviews, and countless organisations beg for change. Study after study, report after report, has made the same call.
Now a new study has the dubious honour of joining that list. The annual Poverty in Australia report, released by the Australian Council of Social Service and the University of New South Wales, found that one in eight Australians was living in poverty. Worse still, one in six children is growing up in poverty. Poverty has become a national crisis, and the trends show it will only get worse.
The biggest risk factor for living in poverty? You guessed it. Having to rely on Newstart.
Anglicare Australia was a partner in this research. We weren’t surprised by the results. It backs up what we’ve been saying for over a decade.
As for the government? Its position hasn’t changed either. The freeze on Newstart has been one of the few mainstays in a decade of political chaos, even though the excuses have changed with the seasons.
First they said raising Newstart wouldn’t pass the pub test. They’ve been robbed of that one. Poll after poll – including our own research with Ipsos – shows that Australians want Newstart to go up. With so many of us living in poverty or knowing someone who does, it is no surprise that support for an increase is surging.
Then they said Newstart was only a temporary payment. That line disappeared from government talking points after interviewers ripped it to shreds. Many Australians are stranded on the payment for five years or more. Older people are the biggest victims of this limbo, with some trapped on Newstart until they retire.
Now we’re being sold a new story. Instead of fixing Newstart, the government wants ‘more jobs in a stronger economy.’ The best form of welfare is a job, they tell us, so we must ‘grow the pie.’
Here’s the problem. That approach won’t help the people who are doing it tough. In fact, last week’s research shows it might make things even worse.
Looking at households under the poverty line, the Poverty in Australia report found that more people live in poverty during economic booms. The biggest surges in poverty have coincided with our strongest periods of economic growth.
On one level, this makes sense. A booming economy means that rents become more expensive, certain living costs go up, and businesses can start charging their customers more. That’s bad news for people who work part-time, earn the minimum wage, or are stuck on Newstart.
On another level, this is hard to accept. It flies in the face of what politicians have been telling us for a generation – that if we have a strong economy, everything else will fall into place.
This report turns Australia’s political consensus on its head. If we don’t have a strong safety net, other steps we take – like introducing tax cuts and stoking investment in the housing market – can make poverty even worse. And the first step to a stronger safety net is raising the rate of Newstart. Lifting Newstart is the single biggest step we could take to reduce poverty in Australia.
The sad history of Newstart is littered with reports that were ignored and studies that were buried. This one shakes our economic orthodoxy to its core. Let’s make sure it isn’t forgotten.