Politics

Welfare boost: Proposal to increase Newstart by $75 per week

Sep 17, 2018

The proposal suggests increasing the payment by $75 a week. Source: Shutterstock.

Raising the rate of Newstart by just $75 a week would lead to more Australians in employment, increase consumer spending and boost wages, according to a new economic report.

Financial firm Deloitte analysed the current rate of the jobseekers allowance and found that increasing the payment by just $10.71 a day would not only make the payment more fair, but would also benefit the overall Aussie economy.

The report, which was commissioned by the Australian Council of Social Service (ACOSS), recommended the increase – which would set the federal budget back $3.3 billion a year. However around a quarter of that figure would be recovered through increased tax due to the larger economy.

“This report confirms what we knew,” said ACOSS CEO Dr Cassandra Goldie. “An increase to Newstart and Youth Allowance will benefit every single community in Australia, particularly regional communities doing it tough.

“Raising the rate of Newstart and related payments will help hundreds of thousands of people struggling to put a roof over their head and food on the table with an income of less than $40 per day.”

Raising Newstart and Youth Allowance will lift thousands out of poverty and deliver millions of dollars to communities across Australia. #raisetherate #changelives @cassandragoldie opening the briefing of Deloitte Access Economics’ modelling on the benefits of lifting Newstart. pic.twitter.com/Igy6pUSIYY

— ACOSS (@ACOSS) September 16, 2018

Newstart has been the subject of debate recently as the payment has not risen in real terms for more than two decades, however it will increase by $2.20 this week as a result of twice-yearly indexation.

The report also found that the proposed boost to the payment would not only help to tackle poverty and boost the country’s economy, it would also deliver around 12,000 new jobs by 2021, and see wages increase by 0.2 per cent.

However, while the report acknowledged that the finacial benefits would “tend to fade over time”, it argued that “the most compelling reasons to adopt this reform revolve more around fairness than they do around prosperity”.

Goldie added: “We call on all Federal Politicians to do what is right for our communities, and increase Newstart and Youth Allowance by $75 per week as a matter of urgency. Not only is it the right thing to do as a matter of social justice, it will provide the necessary economic boost regional economies so desperately need.”

Recently, Starts at 60 revealed that older Aussies are actually spending longer on the dole than unemployed people in their 20s, debunking the “myth” that Newstart is a young person’s payment.

The findings, collated by the Australian Bureau of Statistics and analysed by The Benevolent Society, revealed that there were 174,532 Aussies aged 55 to 64 signed on, compared to 156,664 between the ages of 25 and 34. While there are more older Aussies simply in receipt of the benefit, the data also showed that unemployed Australians, aged 60-64, remain on the unemployment benefit for an average of 187 weeks before signing off, compared to 104 weeks for those aged 25-29.

And, whereas ‘signing off’ for younger generations means the recipient has landed a job, in many cases with older Aussies the ceasing of payments can often be explained by a transition to the Age Pension, after reaching the age of 65.

Joel Pringle from The Benevolent Society said these figures show an alarming number of older people are “stuck on Newstart in the years leading up to retirement”, which then contributes to the increasing problem of pension poverty suffered by recipients of the Age Pension.