The Australian Greens welcome the primary finding in the majority report
that current rates of Newstart are inadequate.
On the weight of evidence presented by 78 submitters, the majority committee
report has questioned, 'whether Newstart Allowance provides recipients a
standard of living that is acceptable in the Australian context for anything
but the shortest period of time.'
As the committee, 'agrees that Newstart Allowance does not allow people
to live at an acceptable standard in the long term'
and references the extensive body of significant evidence which demonstrated
inadequacy, these additional comments will not cover that evidence any further.
However, these additional comments are necessary, because despite
questioning the adequacy of the payment, the majority report fails to follow
through with a comprehensive package of recommendations to government such
as increasing Newstart and other allowances, applying appropriate indexation,
and improving job services, even though this was the preferred outcome for many
The Australian Greens are particularly disappointed with the majority
report, because the committee has perceived the resolution to inadequacy to be
a choice between:
[One] of two possible solutions... either Newstart Allowance
should be increased to raise the standard of living available to recipients, or
more careful thought needs to be applied to how best to ensure that people
spend as little time as possible on welfare between jobs.
The committee was not ‘forced’ to take this approach. It has
demonstrated a lack of will to find appropriate and sufficient solutions to
resolve the clearly demonstrated inadequacy of the payment.
The focus on moving people off allowance payments as quickly as possible
also seems inconsistent with the assertion in the majority report that, 'since
the 2006 Welfare to Work reforms, Newstart has shifted from a payment
designed only for people who have the capacity to work full time to also
support people who have less capacity to work due to caring responsibilities or
Rather than tackling the reality presented by the Australian Council of
Social Service (ACOSS) that currently 62 per cent of Newstart recipients have
durations of more than a year on the payment,
the recommendations by the majority report are primarily set around a
superficial analysis of budgetary constraints.
We strongly disagree with this budget analysis and question the
priorities of any Government that cannot find the necessary revenue to
implement a $50 a week increase, while still continuing to give highly
profitable multi-national mining companies multi-billion dollar subsidies.
The Australian Greens also note that there are a number of disguised
costs associated with poverty, that impact on a range of other budget areas,
from health to the services provided by a range of non-government organisations,
and a true costing should also factor in interaction with the justice system,
lower educational outcomes and lost productivity. For example, the Aged
Discrimination Commissioner highlighted a report which demonstrated that if the
workforce participation of people over 60 was increase by just 3% the benefit
to the Australian economy would be $48 billion a year.
There is also insufficient modelling to effectively measure the costs
and benefits of lifting the Newstart payment including the intergenerational
benefits of a reduction in the number of children living in poverty. Similarly,
there is no assessment of how social security and health expenditure might be
reduced if fewer people were entrenched in poverty.
In the view of the Australian Greens, inadequacy of the payment can only
be effectively tackled by an appropriate increase to the current payment rates.
A fair and equitable system would lift the payment rates by $50 per week for
Newstart Allowance Single, and adjust all other allowance payments in
proportion to the single rate, as recommended by a majority of submitters to
the inquiry – including peak bodies such as ACOSS, service providers such as
Anglicare and the Business Council of Australia.
More appropriate indexation is also crucial to ensuring that the
purchasing power of the payment does not continue to decline, as it has over
the past 8 years, according to evidence provided by ACOSS.
The majority committee report notes that such a change can be addressed
easily through the application of government policy, yet fails to address this
as a recommendation.
Given that the indexing pensions at a different rate to allowances is causing
the two payment types to diverge significantly over time, it would be ideal to
index allowance payments according to a method that is identical to that which
is applied to pensions.
In the view of the Australian Greens, this remains a core measure that is
required to ensure any increases to the base rate are retained into the future,
and should have been formally recommended by the majority report, irrespective
of the specific policy mechanism which is required to revise the indexation
The Australian Greens recommend that the government increase the single
rate of New Start Allowance by $50 a week.
The Australian Greens recommend that the government apply proportional
increases to all other allowance payments.
The Australian Greens recommend that the government index all allowances
by the higher of the Consumer Price Index and Male Average Weekly Total
It is the view of the Australian Greens that these three recommendations
are necessary to fully alleviate the current inadequacy of the allowance
payments but should be considered alongside programs that deliver targeted job
seeker services and facilitate secure, on-going employment.
Responding to the inclusion of the Joint Agency Submission's arguments
Although the majority report does ultimately concluded that the payment
is inadequate, there are two attempts to blunt that central finding in favour
of inadequacy – by casting doubt over the capacity of policy makers to judge
adequacy and by implying that other government programs and payments are
currently offsetting the inadequacy of the base payment.
Both arguments are drawn from the joint agency submission,
and are discussed in the majority committee report.
The inclusion of these arguments may be intended to dull the overwhelming
number of arguments that point to inadequacy made by other submitters, but such
arguments simply cannot disguise the stark reality that the single rate of
Newstart is now less than 45 per cent of minimum wage, and $130 per week below
the poverty line or that it is declining in real terms, while cost of living
pressures, particularly relating to energy, food, transport and housing, are
The joint agency submission runs an argument that adequacy is a
subjective claim that is difficult to measure.
This seems an entirely inappropriate argument to be made by government agencies
that have often sought to measure their success in areas of social inclusion
and poverty. While it is true that over time more nuanced methods such as a
measure of multiple deprivations have replaced absolute concepts such as the
poverty line as a more appropriate tool for assessing the impact of poverty,
this collective shift in policy thinking away from absolute mechanisms does not
mean that appropriate measures of capacity and inclusion, and hence adequacy,
cannot be found.
A broad and robust international framework for policy making that takes
a capabilities approach has already been well-established, and it is this
subjective approach to health and wellbeing that underpins significant
international poverty eradication programs such as the Millennium Development
Evidence presented to this inquiry clearly demonstrates that
capabilities such as the ability to secure appropriate housing; maintain
adequate nutrition; and participate in the labour market are significantly
diminished by long periods spent on Newstart.
The impact of sustained poverty is also measurable. Many of the
submissions document that poverty has tangible impacts in the form of hunger,
psychological impacts, and homelessness, and have clearly demonstrated how
these impacts further entrench people in a cycle of poverty.
The second obscuring aspect that warrants mentioning is the multiple references
to the idea that the government provides a package of supports that offsets the
inadequacy of the base payment. It is particularly troubling that the graphs found
in the majority report compare the income of families to the minimum wage
obtained by a single individual working full time.
There appears to be some confusion on this point, as for example in Submission
54. It is important to reiterate the point that current programs such as
Family Tax Benefit and Rent Assistance are also extended to families living on
the minimum wage. Upon request, the Department produced additional materials
that clearly demonstrate this.
Yet the graphs that have been transferred through to the final report are still
not adequate as a tool for comparing the budgets of families on allowance
payments with those receiving the minimum wage.
Furthermore, while there is clearly a package of supports available from
the government that does modestly supplement the income of allowance
recipients, particularly families, this still has not been demonstrated to
sufficiently lift those families, particularly single parent families, out of
poverty. In fact, other submitters such as Anglicare and ACOSS have presented
evidence that clearly demonstrates the extent to which families living on
Newstart experience poverty, even with the current suite of additional
Hence, the Australian Greens remain unconvinced by the arguments
provided by the Joint Agency Submission that other government policies are
sufficient to offset the inadequacy of the base-payment of Newstart and other
allowances. Coupled with the recent legislation to shift single parents off the
higher Parenting Payment onto Newstart, once their youngest child turns eight,
lifting people out of poverty does not seem to be as important as achieving a
In conclusion, neither of these arguments from the majority committee
report significantly alter the central finding that Newstart is simply too low.
Therefore, it is extremely disappointing that the majority report does not
follow through with an appropriate recommendation to directly tackle its
initial finding of inadequacy.
Response to the Majority Report Recommendations
The Australian Greens acknowledge that the majority committee report has
identified some of the key challenges faced by people who are living on
allowance payments for more than a very short period of time.
In particular, the majority committee report has done a good job of
recognising the specific needs of unemployed older workers, and of carers who
are transitioning into the workforce. The duration of time that older workers
spend on Newstart, and the impact that this has on that cohort, is of
significant concern to the Australian Greens and we are glad this was covered
well in the majority report.
None-the-less, we are concerned that the report has not given a
comprehensive picture of the specific challenges that many long term Newstart
recipients face, apart from asserting that, 'since the 2006 Welfare to Work reforms,
Newstart has shifted from a payment designed only for people who have the
capacity to work full time to also support people who have less capacity to
work due to caring responsibilities or a disability.'
Evidence given to the committee demonstrated that long term Newstart
recipients are likely to be older workers, to have a partial disability or
mental illness, to face communication or language barriers or lack marketable
skills and have low level of formal education.
An excellent overview of the challenges faced by Newstart recipients is
provided by ACOSS’s 2011 paper, Beyond Stereotypes: Myths and Facts About
Social Security Recipients of Working Age. This paper presents data provided
by DEEWR through Estimates, and reports that:
- One in two have not completed year 12
- One in three is aged over 45
- One in seven has a disability that means they can only work
- One in ten is indigenous
- One in fifteen is a sole parent
Programs that help overcome these barriers to work are necessary and
need to be addressed in the recommendations. However, the majority committee
report has failed to demonstrate how specialised services would deal with the
multiple barriers to work that some Newstart recipients face; for example,
older workers, with a low level of formal education and those with a partial
disability will still be left behind.
It is of concern that these recommendations almost entirely ignore the
different supports required by the long term unemployed in comparison to those
who have recently left the workforce, even though the report references
evidence from the Department of Education, Employment and Workplace Relations (DEEWR)
that since 2009, the case load of stream 4 job seekers who are “have been
identified to have multiple and complex needs” has doubled from 11 per cent to
22 per cent of total cases.
Failing to address these concerns will ensure that some Newstart
recipients continue to languish in poverty, despite the clear evidence that
extended periods of time spent in poverty only diminishes people’s capacity to
enter the workforce.
As a result, we disagree with the premise that the specialised
employment supports for carers and older workers that form recommendations 1, 2
and 3 of the majority committee report will fully overcome barriers to work for
all Newstart recipients.
Given that there are significant gaps in the current employment services
system, the Australian Greens consider it entirely inappropriate for the
committee to merely recommend reorganising the existing Job Services Australia
programs in this piecemeal fashion.
In the view of the Australian Greens a comprehensive, independent review
of job seeker services would deliver a more substantial package of reforms in
this area with a particular focus on developing support programs for the most
disadvantage job seekers.
We also note that there is still insufficient analysis of how
individuals are churning through the job seeker system as a result of cycling
in and out of short term employment opportunities. By its own admission, DEEWR
has been unable to effectively measure how many people are in fact cycling
through on and off Newstart or at what frequency.
It is also particularly concerning to note that the answers from DEEWR
and the Department of Human Services (DHS) in response to questions about
possible churning put to them by the committee were not able to demonstrate
effective data sharing between those two important Departments. This indicates a
siloed approach to these matters within government that should be reviewed as
part of any effort to better address the dynamics of short term and casual
The Australian Greens recommend that the government initiate an
independent inquiry into the functioning of Job Services Australia programs,
and assess the effectiveness of its expenditure with regard to helping people
into work, particularly those people who face multiple barriers to employment
and the long term unemployed.
The majority report’s recommendations 4 and 5 are geared towards
providing greater opportunities for Newstart recipients undertake a very small
amount of paid work.
The Australian Greens recognise the principles behind recommendation 5
which calls for an increase to the working credit thresholds. However, in our
view, it is a significantly more complex issue than is presented in the
majority report, and if applied in this manner, could increase the exposure of
Newstart applicants to a system of payments that is even more difficult to
comprehend, and easy to accidentally fail to comply with. The mismatch between
government reporting requirements and pay day is well documented problem, which
brings an increased risk of misreporting, and swings in income that can be
devastating to households without any savings to buffer them.
Where temporary casual work results in additional financial penalties on
low income households it is also more likely to act as a disincentive to
employment. As this recommendation requires further development and does not
directly tackle adequacy, we do not support this recommendation as it stands.
The Australian Greens also question the assumption throughout the
majority report that causal work will lead to secure, ongoing work in the
future. The majority report does pick up on the evidence from submitters that
even partial engagement with the workforce ensures that individuals are more
work ready than those who are not engaged. However, while improvements to the
income free threshold would be welcome, the committee’s suggestion of a three
hours per week at the minimum wage threshold is the absolutely bare-minimum
that a jobseeker could legally work in a single shift and is not even close to
the equivalent of a full standard 7.5 hour day at work.
The income free threshold is an important component of support for those
on income support, however we do not think the recommended three hour per week
limit is sufficient and believe it should be higher.
Furthermore, there is still no clear explanation as to how causal, part
time work leads into secure, full time work, despite the assertion in the
majority report that, “The majority of Newstart recipients who transition to
work initially do so through casual and part time work.”
Given that there is no clear evidence to underpin the assertion that
casual work will lead to a permanent exit from the allowance payment system, it
is the view of the Australian Greens that these matters would be better
addressed in conjunction with a review of job services.
Recommendations 6 and 7 in the main committee report are primarily
attempts to tinker with the way in which Centrelink delivers services and
information to its customers. These are not necessarily inappropriate tasks for
Centrelink to commit to resolving, as there is no reason why the system is not
focused on customer service, and the provision of accurate, easily
understandable information. However, these recommendations also do not directly
tackle the issue of inadequacy.
In conclusion, it is the view of the Australian Greens that it is
irresponsible to ignore the primary finding of this report that Newstart and
other allowances are simply inadequate.
Policy makers should recognise that this inadequacy can only be fully
resolved by taking steps to improve the base level of payment, as well as
helping to decrease the time that people have to spend on Newstart by providing
better employment services and support.
Senator Rachel Siewert
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