For over a decade the adequacy of Newstart and related payments has been called into question. With no increase in material terms since 1994, the wider community has joined the community sector, businesses and economists in arguing for an increase to payments and a review of the supports available to jobseekers. This is the context in which the committee began this inquiry, which gathered considerable evidence from over 450 submitters and witnesses, including organisations, academics, state and local governments, as well as many private individuals who receive income support payments between July 2019 and February 2020.
The evidence discussed throughout the report was received prior to the emergence of the COVID-19 pandemic. The impacts of the pandemic on people's social and professional lives have been unprecedented and are still unfolding. The measures put in place across the globe to stop the spread of the virus are having direct and profound impacts on the economy and employment in every country, including Australia. While the committee acknowledges that the Australian Government's economic response has included measures to assist existing income support recipients and newly unemployed people, these measures are currently time-limited. As such, the findings of this inquiry are highly relevant today and into the future beyond the COVID-19 crisis. Importantly, the findings and recommendations discussed in this report can assist in the development of appropriate policies and programs to support the anticipated increased number of jobseekers due to the COVID-19 crisis beyond the temporary measures put in place by the government.
Living in poverty
Throughout the inquiry, the committee received compelling evidence that the rates of income support payments for working-age jobseekers are inadequate. Further, they impede peoples’ ability to engage socially and economically within their community. Significantly, the committee found that the income support system is not meeting its objective of ensuring a minimum standard of living for working-age jobseekers, as too many live in poverty. Noting this fundamental deficiency of the income support system, the report starts with an examination of the payment rates against various measures of poverty and out lines early on the urgent need to review payment rates.
The negative impacts of inadequate rates of income support payments on individuals and the wider community cannot be underestimated. Impacts on individuals include the inability to afford daily basic essentials, elevated risk of homelessness and detrimental effects on their physical and mental health. At a community level, health services, state, territory and local governments, and the not-for-profit sector are under increased financial pressure due to the demand for emergency relief assistance and other important support services. As a result, the committee has made a series of recommendations to address and further understand these complex issues.
Barriers to employment
Improving people's economic participation is critical. However, the committee found that jobseekers face many barriers to employment beyond labour market conditions. Importantly, the evidence indicates that the income support system itself is acting as a key barrier to employment because of the inadequate payment rates that force people into poverty, the flaws in the design of mutual obligation requirements and the inefficiency of employment programs. Further, some income support recipients experience additional challenges that further compromise their ability to secure work, which often results in long-term unemployment. Indeed, the committee received considerable evidence in relation to the additional barriers to employment experienced by people with disability and medical conditions who have no or only partial capacity to work; older unemployed workers; single parents; people living in remote, rural and regional Australia; First Nations Peoples; and young people on Youth Allowance (jobseeker). With uncertain economic conditions on the horizon, it is critical to have a system that supports and facilitates transition to work and economic participation. As a result, the committee has made several recommendations aimed at ensuring that the income support system provides an adequate safety net and focuses on supporting people - back into work.
Reforming the system
The final chapter of the report discusses approaches to the design of an adequate system to support working-age unemployed people. Indeed, this inquiry has clearly exposed systemic deficiencies in the current income support system. Evidence to the inquiry has made clear the need for major reform of the social security system to ensure the income support system provides an adequate safety net for working-age unemployed people and becomes a strong enabler for economic participation. It is timely and critical to engage in major reform to ensure the social security system provides an adequate safety net for all Australians at all times.
The committee received a wealth of information and evidence throughout the inquiry and thanks all those who participated. As a result, the committee has made 27 recommendations, which aim to ensure Australia's social security system fulfills its role of providing an adequate minimum standard of living for the unemployed.