In the lead up to the federal budget, there was a campaign by unions, social services groups and even the business lobby to have the Newstart unemployment benefit raised from $40 to $50 a day. Liberal backbencher Julia Banks courted criticism when she claimed in an interview she could live off the payment, added to this criticism was the fact she owned several properties. Bill Shorten stated the payment was too low but only committed to a review.
On budget night Tuesday, there was no announced increase in the fortnightly payment of $545.80 for a single with no dependents. Malcolm Turnbull, when asked about this decision stated “We believe the setting is right. It is a safety net”. Liberal backbencher Tim Wilson on the ABC’s Q&A program Monday night also defended current payment level “The social safety net is not supposed to be a hammock where people get accommodated to it”.
However former Liberal Prime Minister John Howard who introduced mutual obligation for welfare recipients stated he now supported an increase in the Newstart allowance when asked about it at a PricewaterhouseCoopers post-budget breakfast “I was in favour of freezing that when it happened, but I think the freeze has probably gone on too long”.
The argument for keeping Newstart low is so it acts as a disincentive for people to remain on welfare and so they continue to seek out employment opportunities. Government MPs have also highlighted that those receiving Newstart are entitled to other subsidies and supplements such as rent assistance.
However, it is being argued by some, including from the business lobby that the payment being so low actually hinders recipients ability to seek out employment such as gaining transport to job interviews and appropriate clothing. The Newstart allowance has not be raised in 25 years.
Given that the federal budget including the government’s signature 10-year tax cut plan needs to pass the Senate the crossbenchers have signalled they will propose raising Newstart as part of budget negotiations. Crossbencher Derryn Hinch made the point that those receiving Newstart are not “20-year-old pimply kids who just don’t want to work” but were “45, 55-year-old men and women who have been made redundant”.
The Greens put forward a motion in Senate yesterday calling on the Government to raise Newstart to $75 a day which was voted down by the major parties. Bill Shorten despite stating he could not live off $40 a day did not commit to an increase in Newstart in his budget reply speech.
Is it time to raise the Newstart allowance to help genuine people down on their luck trying to re-enter the workforce? Or should the payment remain low to act as a deterrent to remain on welfare? Have your say in our poll below.