Politics

Here’s Proof That Raising Newstart Is A Great Idea That Would Help Literally Everyone

Raise it now.

newstart centrelink

People have been calling on the government to raise the “simply inhumane” Newstart payment for years now. Now, a new report released this week demonstrates that raising Newstart would actually be a great idea, and would help the entire country.

And yes, that’s the entire country, not just people receiving Newstart. As the report, produced by Deloitte Access Economics for the Australian Council of Social Services, makes clear, raising Newstart would actually help everyone. That’s because people who rely on Newstart live all around Australia and raising the level of the payment would raise the amount of money they’re able to spend, in turn boosting businesses in the area. All in all, the report found that raising Newstart would likely create 12,000 jobs, lift wages, profits and tax revenue, and have this effect all around the country.

That’s not the only benefit, either. The report identifies two key aims for Australia’s economy, prosperity and fairness, which it describes as “the size of the pie” and “how the pie is sliced up”. It demonstrates how raising Newstart is good for both: increasing the size of the pie by increasing the amount of money people have to spend, and improving how the pie is sliced up because Newstart is going to the poorest people in this country, helping close the gap between them and the mega-rich.

And as for how much this would cost, this is a pretty small proposed increase to Newstart — a ‘catch up increase’ of $75 a week, or an extra $10.71 a day, for Newstart recipients. It would cost the government around $3.3 billion a year, but let’s keep that cost in perspective: this is the government, after all, that proposed corporate tax cuts costing around $65 billion over 10 years.

The majority of that $3.3 billion cost, too, would be cancelled out by the benefit of the program: that’s $3.3 billion flowing into the economy, being spent and boosting jobs and business. If you’re interested in the full numbers on how this would work, you can see the Deloitte report here.

We Really Didn’t Need A Report To Tell Us Newstart Is Unfair, Though

While it’s great that the report outlines reasons to raise Newstart, we really shouldn’t have needed any more reasons in the first place. Even John Howard is already on board with raising Newstart, and for good reason: the payment is incredibly low.

We already knew, for example, that the current Newstart payment works out at around $40 a day, which has to cover a recipient’s rent, transport, food, bills and other expenses. A report by the Salvation Army in May found that once you subtract housing expenses, that ends up being around $17 a day left to cover food, transport, phone, internet and utility bills, as well as everything else a person might need. That’s so low that any unexpected expense could tip a Newstart recipient into debt.

The level of Newstart hasn’t risen in real terms (that is, taking into account how much things cost as well as the level of the payment) since 1996. Meanwhile, most other payments offered by the government, including the aged pension, have risen over those twenty years. It’s worth remembering that Newstart is supposed to be a safety net to help out the unemployed — ideally, to help people in need get back on their feet. It’s pretty hard to do that when the government has kept that payment at a pretty unliveable level for decades.

How Do We Make This Happen?

Whether we’ll see action on the report’s recommendations isn’t clear yet. The Coalition government has a pretty abysmal track record on things like this, and Prime Minister Scott Morrison has previously taken a pretty strong stand against raising the payment, back when he was Treasurer. Labor, meanwhile, agree with ACOSS that Newstart is currently too low, but say they want to look into it further before committing to an increase.

The Greens, however, have a bill before Parliament right now which would increase both Newstart and Youth Allowance by $75 a week. That bill will be debated before the end of October, and if other MPs get on board, we could start taking action real soon.

As Greens Senator Rachel Siewert put it, “we don’t need a review, we don’t need an audit, we need action”

“We have all seen the reports, we have all seen the evidence, and we have all seen the human suffering of people struggling on the appallingly low payment,” she said. “We have the opportunity to get it done when my bill is debated in October- what are we waiting for?”