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

I move:

  That this bill now be read a second time.

I rise today to speak on the Australian Greens' Social Services Legislation Amendment (Ending the Poverty Trap) Bill 2018. This is in fact my fifth attempt to introduce a bill to raise Newstart. Last week was the Raise the Rate Week of Action, and we heard from people across the country about the difficulties they experienced living below the poverty line while on Newstart. I'll outline a few of those later in this contribution.

This bill provides additional financial assistance to single recipients of the basic rate of the Newstart allowance, youth allowance, Austudy, sickness allowance, special benefit, widow allowance and crisis payment, increasing them by $75 a week. The bill will provide additional financial assistance to single recipients of the maximum rate of away-from-home rates of youth allowance, increasing it by an amount of $75 a week.

The intention is for Abstudy to be increased by the amount of $75 a week as well. However, this payment is based in policy rather than in legislation.

Newstart, youth allowance and the other payments mentioned above have not had a real increase in 25 years. The current rate of Newstart and related payments is so low that people are unable to cover basic living costs, such as housing, food, transport, health care and utilities. One of the reasons these payments have fallen so far behind the real cost of living is that they have different indexation arrangements to the pension rate. This bill seeks to rectify this by improving indexation for these payments in line with the pension rate.

The bill will change the indexation arrangements for these payments and other income support payments to bring them into line with the higher of the CPI, the consumer price index, and the pensioner and beneficiary living cost index, the PBLCI. This will ensure that these payments better keep up with the real cost of living similarly to the age pension.

There have been growing calls from the social services sector, from the business sector and from economists to raise the rate of Newstart and youth allowance. This has been going on for many years. Recent research shows the majority of Australians also agree that the current levels of income support payments are too low. A poll commissioned by ACOSS in April this year found that 72 per cent of Australians agree that Newstart should be increased to help people better cover the basic costs of living and search for work. It is absolutely abundantly clear that the government is out of step with the community's expectations.

Last week a number of politicians from across the spectrum joined the ranks of people calling for an increase to Newstart. A number of Labor MPs have publicly come out in support of raising the rate, including Mike Freelander, Nick Champion, Patrick Gorman, Josh Wilson, Ged Kearney, Chris Hayes and in fact Labor leader Anthony Albanese. He said in Perth last Tuesday, 'The bells are ringing for an increase in Newstart.' Former Leader of the Nationals Barnaby Joyce joined current and former coalition colleagues John Howard, Matthew Canavan and Arthur Sinodinos in calling for an increase to Newstart.

I'm glad these members are taking the time to listen to the community and recognise that the current rate is inadequate. Every single parliamentary vote for the bill is a show of solidarity with unemployed workers in this country. I urge all members of parliament to vote on this bill according to their professed beliefs. Every vote for this bill is a vote for the unemployed, for those living in poverty and for members of our community who are doing it tough.

Last year the Productivity Commission found that, despite our having experienced 27 years of uninterrupted economic growth, the proportion of Australians experiencing relative income poverty—around nine to 10 per cent—has not changed. The fact that poverty rates have remained entrenched for decades demonstrates the lack of political will from previous governments and the current one to help those struggling to make ends meet. Today about three million people in Australia are living below the poverty line. This includes 739,000 children and 410,000 young people. Most of the people affected are living in deep poverty, well below the poverty line.

The Poverty in Australia 2018 report measured the average poverty gap in Australia, which is the difference between the incomes of people in poverty and the poverty line. It found that people in poverty are living $135 per week below the poverty line. This is unacceptable in this wealthy country. In a wealthy country like ours, no-one deserves to or should be living in poverty.

These figures paint a picture of a country and a government that are letting down people on the lowest incomes. We are an incredibly wealthy country. We are currently the wealthiest nation in the world when it comes to the median wealth per adult. Today we have a clear choice to make. We can choose to strengthen our social security system of which we were once so proud. This is one of the best levers we have available to reduce poverty in this country. We can choose to help people on income support payments cover everyday essentials like health, heating, food and rent. An immediate increase in Newstart and related payments will change this picture. It will assist in alleviating poverty, help reduce income inequality and help people who are studying and seeking employment. I hope today we can make the right choice for children living in poverty, for families, for students, for single parents and for disabled people.

ACOSS, the Australian Council of Social Service, and the University of New South Wales released the Poverty in Australia 2018 report. The report found that households relying mainly on income support payments are five times more likely to experience poverty compared to those households relying mainly on wages and salaries. This reflects the fact that income support payments are usually below the poverty line. Unsurprisingly, those who experience the highest poverty rates are on youth allowance and Newstart, with 64 per cent of people on youth allowance and 55 per cent of people on Newstart experiencing poverty. The report also revealed that the freezing of Newstart since 1994 has contributed to a progressive deepening of poverty in households that are mainly reliant on Newstart. I find it utterly shameful that this country has the second-worst poverty rate in the OECD amongst unemployed people.

The Salvation Army's 2018 Economic and Social Impact Survey found that, after paying for accommodation, Newstart recipients were left with just $17 a day. How are people expected to look for work when they are living below the poverty line and trying to survive on $17 a day? Poverty can have devastating impacts on a person's health and mental health. It increases a person's risk of homelessness, social isolation and loneliness. How are these circumstances conducive to helping someone find work?

The ACOSS and Jobs Australia report Faces of unemploymentvery clearly demonstrates that Newstart is not a temporary payment. The report found that, in March 2018, 64 per cent of people had received unemployment payments for more than a year, 44 per cent for over two years and 15 per cent for more than five years. It also highlighted how a person's chances of leaving unemployment payments sharply diminish over time. Seeing Newstart as a temporary payment also masks the number of youth allowance recipients who move from youth allowance to Newstart when they turn 22. The latest data from the Department of Social Services shows that people spend an average of 156 weeks on Newstart. So the government is either wilfully ignorant or misleading our nation when it says that two-thirds of people move off Newstart very quickly. It says that but then doesn't acknowledge how many people are on this for over a year—44 per cent for over two years and 15 per cent for over five years.

When faced with increasing calls to raise the rate, this government resorts to the line that 99 per cent of people on Newstart also receive other benefits. Let me be clear: these additional payments in no way substitute for the woefully low rate of Newstart and youth allowance. For most Newstart recipients, the only additional payment they receive is the energy supplement, which is 65c per day. Sixty-five cents per day for a week won't even buy you a cup of coffee; we actually made that point when the energy supplement was put in place. While I argued very strongly for it to be maintained because it helps a tiny bit, it does not raise people out of poverty. Around a third of Newstart recipients receive rent assistance of around $10 a day. Even after you combine the maximum rate of the energy supplement, rent assistance and Newstart, it doesn't come close to covering the basic costs of living.

I ask Australians to not believe what the government says; this is not a transition payment anymore. The employment situation in this country has changed from when the unemployment benefits first came in, and it's certainly changed since 1994. People have to survive on this payment long term. We know that poverty can act as a barrier to finding work. By keeping payments so low, Newstart is doing the opposite of what it is meant to do.

The abysmally low rate of Newstart isn't only affecting adults; it also has a detrimental impact on children. The Australian Research Alliance for Children and Youth report released in 2019, To have and to have not: measuring child deprivation and opportunity in Australia, found that children living in poverty felt impacts in all areas of their wellbeing, spreading far wider than just the material basics. The report found that children living below the poverty line were 1.7 times more likely to face food insecurity and 2½ times more likely to be missing out on learning at home. We know this has a negative impact on children in the long term because children who grow up in adverse conditions are more likely to experience poorer outcomes as adults. As you might expect, the No. 1 recommendation of the report was to raise the rate of Newstart by $75 a week to give all kids a fair go.

An increase to Newstart would also have an immediate effect on single parents doing it tough. In 2013, following on from the initial legislation that went through in 2006, 80,000 single parents who were originally grandfathered were transferred from parenting payment (single) to Newstart. This resulted in a sharp rise in poverty among unemployed single parents—from 35 per cent in 2013 to 59 per cent in 2015. Every day, single parents are being forced onto Newstart when their youngest child turns eight and being pushed into further poverty. This situation unfairly impacts on women, because over 80 per cent of single parents are women. Children in single-parent families are three times more likely to live in poverty than children in coupled families are. We should be alleviating poverty, not exacerbating it along gender lines. Raising Newstart and the related payments provides us with a real opportunity to change the poverty rates of single-parent families across this country.

One of the distressing scenarios that is all too often left out of the debate is the impact of Newstart on older Australians. The share of older unemployed workers is growing, with 43 per cent of Newstart recipients now older than 45 years. There are now more unemployed workers aged between 55 and 64 receiving Newstart than any other age cohort. Older Australians also spend the most time on Newstart compared to other age groups. I hear too often from older people who are dismissed by potential employers and their employment service providers because of their age. They are considered too old for employment but too young for the age pension. But instead of being able to live with dignity older Australians on Newstart are pushed into poverty long term. Having had to use up virtually all of their savings to qualify for Newstart, they then age on Newstart and go onto the age pension with no savings.

The research paints a stark picture of the devastating impacts of poverty, inequality and deprivation. But what does it mean to actually live on as little as $40 a day? I asked the community to share their personal experiences of living on Newstart. The responses I received were profound, and highlighted the constant stress and anxiety felt by many income support recipients. The words they used to describe what it's like to be on Newstart included 'demeaning', 'humiliating', 'stigmatising', 'degrading' and 'trapped'. One person told me about the worry and despair they felt about being on Newstart:

It's eating one meal (and nothing extravagant) a day, because, in order to pay the minimal bills you have, that's all you can afford. It's being constantly cold in winter. It's getting sick but not going to the doctor unless you really have to. It's wearing your mostly secondhand clothes until they pretty much fall apart. It's dreading socialising because it's likely to cost and if your friends pay your way, they get sick of it and you feel like a dreg for accepting. It's being treated as if you are a useless, bludging scunge by officials, media and others in society. It's despair, loss of ability to see a future for yourself, it's constantly worrying about your ability to keep a roof above your head, to keep Centrelink and compliance agencies happy so you don't get breached and lose your home, your ability to pay your bills and the stigma that goes along with failing at those things which makes it hard in future to get a rental etc. It's not living, it's barely existence.

One parent told me about the consequences of living on Newstart for her and her son:

It breeds depression and anxiety. It leads to social isolation. The stress of worrying about how you will feed your family leads to health issues which cost the Government far more than an increase would. I have gone without food to feed my son, not let him go to birthday parties because I couldn't afford a present to give. I've kept him home from school because I didn't have food to send or petrol to get him there. The depression associated with being financially way under the poverty line leads to mental health issues that are there for life, needing medication which again costs money we don't have and costs the Government. Making people live on the current rate of Newstart is a breach of human rights. It affects mostly single parents and it takes away you dignity.

Another person told me about the damaging impacts of Newstart on her health:

The day I get paid doesn't give me relief at all instead it's when the panic sinks in. I don't eat breakfast or lunch most days because I can't afford it once I've paid bills. Right now I'm sitting here with my last $13 trying to work out how to make it stretch till Tuesday. I go hungry a lot and when you're hungry you feel hopeless it's a constant state of living in despair. I feel like a burden to my family and friends. I had to borrow money off of my dad and he's on a pension. I've been hospitalized before because I've been suicidal over the stress of it all. On Newstart you can't afford to live at all you just exist.

Increasing Newstart and related payments and amending the indexation rate will help reduce poverty for hundreds of thousands of Australians. The cost associated with increasing these payments is far outweighed by the multitude of benefits to the people who are trying to survive on them, but doing so will also benefit our economy and our society. Independent modelling by Deloitte Access Economics last year demonstrated that increasing Newstart by $75 a week would boost the Australian economy by over $4 billion as a result of extra spending. We know it will boost spending because, when people living below the poverty line get access to a few more dollars, they spend them on the basic costs of living. It'll go straight back into the economy. Deloitte also found that increasing Newstart would create an extra 12,000 jobs. If we can afford to hand out tax cuts to people earning $200,000 a year—and those tax cuts, by the way, are about $11,000, and Newstart is $15,000, so they'll get a tax cut of almost the same amount as Newstart—this country can afford to raise Newstart and youth allowance by $75 a week.

We should not overlook the powerful impact that raising these payments will have on our communities. It will help strengthen our local communities by lifting people out of poverty. It will increase people's social and economic participation while they seek employment or undertake study. It will reduce pressure on the charities that are already struggling to keep up with demand as to food relief, housing and homelessness. Last year the proportion of food insecure Australians seeking food relief increased from 46 per cent to 51 per cent.

This country can afford to increase Newstart and youth allowance. We can afford to. And we must enable people to live with dignity. This government is wilfully misleading the community in saying that we can't afford it and that people are only living on these as transition payments. That is just not true, and the statistics bear that out. The statistics from its own Department of Social Security bear out that people are stuck on these payments, living in poverty. I recommend this bill to the chamber.