Rachel Siewert (WA, Australian Greens) Share this | Hansard source

It's with pleasure that I commence the debate on this very important issue. The Social Security Amendment (Caring for People on Newstart) Bill 2017 that we are debating is about increasing the single rate of the Newstart payment and the single independent rate of youth allowance. We've been hearing a lot about inequality lately in this chamber. In fact, we Greens have been raising this issue for a long time. Inequality is one of the greatest challenges that we face not only in Australia but globally. Income inequality is growing in Australia, and many people battle daily with poverty and with the impacts of inequality to meet their basic living expenses. Inequality creates significant negative effects on people's physical and mental wellbeing, societal cohesion and stability, and our economic growth and productivity, to the point where we are seeing industry and businesses talking about the impact of inequality. The research and literature is clear about the impacts of inequality on people and on our society and community.

In mid-2014, I initiated a Senate Community Affairs Committee inquiry on the back of that horror 2014 budget. That inquiry into the extent of income inequality in Australia found that, on a number of metrics, the evidence indicates that inequality has increased in Australia against the backdrop of rising incomes and across all income deciles. Currently there are nearly three million people, 13.3 per cent of our population, living below the poverty line in Australia, after taking account of their housing costs. Seven hundred and thirty-one thousand and three hundred of these are children.

Poverty and inequality have devastating impacts on life outcomes. Poverty undermines access to education and training, and educational outcomes are directly related to socio-economic status. Poverty limits access to safe and secure housing, transport, employment outcomes, child care and many other aspects of full participation in society. Poverty is a daily challenge for many Australians, undermining their ability to have dignified, meaningful and productive lives. What is incredibly saddening is that the number of people falling into poverty is increasing and that those most likely to find themselves living below the poverty line are already facing the most disadvantage. We are in fact a wealthy nation and have resources available to us to significantly reduce the existing rate of poverty, if only there were the political will to do so. No-one in a country as well off as Australia should be living in poverty and dealing with the increasing levels of inequality we are facing in this country.

Of those on income support in Australia, 36.1 per cent are living below the poverty line, including 55 per cent of people receiving Newstart allowance, and others continue to struggle on extremely low incomes. We need visionary policies to overcome the underlying drivers of poverty. We need such things as affordable housing and access to education and employment, and we need to ensure we have a strong social security system that properly supports people and is fit to meet the challenges we face in the 21st century. A strong social safety net is the foundation of a more inclusive and productive society. The Australian Greens want to see a stronger safety net and adequate income support payments. A strong social safety net is a key part of addressing inequality. A social safety net ensures that, when people fall on hard times, there are supports in place to help them when they need it most.

The changing nature of work—increasing part-time and casual employment, underemployment, short-term contracts and uncertainty of weekly incomes—highlights the need for a 21st century social safety net that is more flexible and responsive. Such a system is better suited to supporting people to maintain their financial resilience as they move in and out of work and to cope better with variable and uncertain income. This is why many modern and progressive societies are adopting more flexible and responsive social security systems as a way of ensuring their economies remain competitive, their communities stable and their workers better able to respond productively to rapidly changing workplaces and technologies.

Australia's income support system is complex, inadequate, punitive and difficult to navigate. The Greens are committed to developing a 21st century social safety net that supports and underpins an inclusive community and a fair and just society, where we have a productive workforce. We will continue to campaign for a social safety net that truly supports those in our community and meets the needs of the 21st century. But right now there are those that are unemployed and on Newstart who are struggling to survive because the payment is inadequate and puts them below the poverty line, living on extremely low incomes. In fact, poverty is a barrier to trying to find employment. So we are very proudly bringing this bill in to address that most immediate issue.

The evidence presented to the Community Affairs References Committee inquiry into inequality in Australia in 2014 showed that the level of the Newstart payment is too low. In conclusion, the report Bridging our growing divide: inequality inAustraliaThe extent of income inequality in Australia found it is clear that income is a key factor in determining the economic wellbeing of most Australians. A low income or low-transfer payments will often exacerbate the disadvantage suffered by a person and their dependants. Take the case of a retrenched worker who may be forced to live on savings or the Newstart allowance for a period of time. This may mean forgoing health services, out-of-pocket expenses, remortgaging or ending child care or private school tuition for the children. A more prolonged period of unemployment may lead to despondency, mental health problems, marital breakdown and homelessness; again, underpinning the impact low Newstart payments have on people.

This same inquiry looked at what principles should inform a well-designed social security system. One of the principles put forward by ACOSS and COTA Australia was the principle of adequacy. The word 'adequacy' is the key point here. Generally, adequacy of income-support payments is considered fundamental and, in fact, goes undisputed. Currently, the ratio of the Newstart payment to the full-time minimum wage is 38.54 per cent. This comparison relates to the maximum fortnightly payment for a single Newstart support recipient with no dependant children and does not include other allowances such as individuals may be receiving. However, it does provide an indication of the inadequacy of the base rate of the payment itself. Sadly, this ratio has been falling since the mid-1990s. In fact, it has even fallen further since this report.

Professor Peter Whiteford told the committee that the relative financial position of a Newstart recipient today is lower than it was in the early 1990s. He said that the poorest 10 per cent are 40 per cent better off than they were in the early nineties. But if you are on Newstart, the real increase in your payment is negligible. Someone who is at the 10th percentile is 40 per cent better off, but a person on Newstart compared to somebody who was on Newstart in the early nineties is not 40 per cent better off. The reason is that people on these income payments are moving down the income distribution. Back in the early nineties, if you were a single person on Newstart, you were about $6 to $10 a week below the tenth percentile point. You are now about $160 a week below that point—this was in 2014. People on these payments are falling down, so to speak. I would have thought a person on Newstart, or Youth Allowance, is now right at the real bottom of the income distribution.

The committee was clear on the importance of the payment levels of income-support payments being adequate to ensure that people are not living in poverty, yet still nothing has been done. The Australian Greens want to see people who are unemployed move into stable and suitable employment. We do not support the argument the keeping people in poverty helps that. A number of submitters to the Senate inequality inquiry took issue with the argument that a lower payment would promote participation in the workforce. Current payment levels are so low they could hinder an individual's ability to find work. For example, this could be because an individual is unable to meeting the cost of clothing themselves or meet the cost of transport to a job interview. Such incomes can lead to physical and mental ill health. An adequate base payment would reduce the stress factors Newstart recipients face and provide them with a springboard to find employment and join the labour market.

Australia's key unemployment benefit, Newstart, has not had a real legislated increase in over two decades. A single person on Newstart receiving the maximum payment has to live on $38.39, including the energy supplement, a day. This is less than half the minimum wage. The Australian Greens have long been calling for an increase to Newstart and had a bill in two previous parliaments to increase the single rates of Newstart and independent Youth Allowance. Leading community organisations, businesses and the community have all called repeatedly to increase these inadequate payments. Despite this, both Liberal and Labor governments have failed to act, despite frequent calls and strong campaigning.

Instead, governments have successively hacked away at the income support system, reducing much-needed supports. Instead, the government has deliberately—in fact, I would say maliciously—propagated myths about those on unemployment benefits and takes every opportunity to demonise those accessing income support, without any compassion or understanding of the reality of those living below the poverty line who are trying to make ends meet when they are on Newstart.

Now, in fact, we see the government harassing people on Newstart, with letters with the AFP logo on them and, one week later, following it up with a text to people on income support, including people that have poor mental health. Imagine the impact on those people. The fact is that there are not enough jobs for people on Newstart at this point. According to the ABS, in February 2017, there were 186,400 job vacancies in Australia, while there were 743,700 people who were unemployed. Young people are more than twice as likely to be unemployed.

Humiliating, demonising, attacking people and making people's lives harder is not the way that we should be addressing this issue. Making it more difficult for people to re-enter the workforce is not the way we should be addressing this matter. We recognise that single people living on Newstart and independent youth allowance are the ones who are typically the most disadvantaged by our current income support system. The maximum fortnightly payment of Newstart for a single person with no dependent children, at the time of this bill's introduction, is $535.60. That is $338.60 less per fortnight than the maximum rate of the payment for singles, including the pension supplement on the age and disability pensions—and those are considered too low. The maximum fortnightly payment for youth allowance living away from home is $437.50. That is $98.10 less per fortnight than the rate of Newstart for a single person with no dependent children.

The Social Security Amendment (Caring for People on Newstart) Bill 2017 will give effect to the Australian Greens' commitment at the last election to increase the single rate of Newstart and the single independent rates of youth allowance by $110 per fortnight. For single Newstart recipients, it does this by introducing a Newstart supplement of $110 a fortnight. For single independent youth allowance recipients, the maximum basic rates are also increased by $110 a fortnight. It is not hard to image what people trying to live on these payments could do with that additional money. They will spend it and drive the economy at the same time as it helps improve their situation. This change will help by bringing some relief to those on the very lowest rates of income support and will assist them to make their lives just that little bit better.

The focus on singles is based on evidence that these households are the most at risk of poverty. The ACOSS report Poverty in Australia in 2016 found that single people generally faced a significantly higher risk of poverty than couples—26.4 per cent compared to 10.1 per cent. Thirty-three per cent of single-parent families are living in poverty, compared with 11.3 per cent of couples with children. This reflects, in part, the economies of scale available to people living with partners.

This bill will also index these payments to those of other income support payments, such as the pension. We know that the rates of indexation between the pension and Newstart are different. The pension has coped with the increasing costs of living a lot better, and has risen a lot more, than the Newstart allowance, so this bill addresses that issue. The call for an increase in the base rate of allowance payments has received widespread support, not only from social services organisations but also from business groups, unions and various economists.

In 2012, the Senate Education, Employment and Workplace Relations References Committee report entitled The adequacy of the allowance payment system for jobseekers and others, the appropriateness of the allowance payment system as a support into work and the impact of the changing nature of the labour market found that the payment rate of Newstart was inadequate. That was in 2012—five years ago! Despite these findings, both Liberal and Labor governments have refused to take action. The Greens are the only party that are calling for a rise in this inadequate payment.

As well as assisting people out of poverty, the other key reasons for increasing the single rates for Newstart and the independent youth allowance include: the extended length of time that many recipients now have to spend on these payments; the cost of living pressures faced by those in receipt of the single rate of the allowances; and the growing gap between the pension and allowance payments due to these different types of indexation. This bill will directly assist single people living on Newstart and the independent youth allowance. It is imperative that these people receive an increase in this allowance.

The gap between the allowance and the pension payment is increasing. Newstart allowance is indexed to the movement in the CPI in March and September; the youth allowance is indexed once in January. Pensions are indexed twice a year, in March and September, by the greater of the movement in the CPI or PBLCI—an index designed to better reflect the price changes affecting pensioners. The rate is also benchmarked to a percentage of the male total average weekly earnings. It is time that Newstart was similarly indexed.

This bill will address this widening gap. A $110 per fortnight increase in eligible payments will ensure a fairer and more straightforward social security system and immediately help Australian people who are living in poverty on these low-income support payments. Better indexation will help maintain the value of an increase into the future. This is one of the ways that we need to address the growing inequality in this country.

The Greens have long advocated for this increase. We have long advocated and recognised that inequality in this country is growing. Part of that is due to these low rates of payments. The ideological approach of this current government gets in the way of their seeing that this is an imperative and must be done. For those who care about inequality in this country, this is a logical step that needs to be taken.

I commend this bill to the chamber and urge everyone in this chamber to realise the urgent need to increase Newstart and the independent rate of youth allowance and to take this vital step. I acknowledge there are other things to do to address inequality, and we will be addressing those, but this is one thing that we can do now to increase the payments that people are struggling to live on and to start to address inequality in this country.