Patrick Dodson (WA, Australian Labor Party, Shadow Assistant Minister for Reconciliation) Share this | Hansard source

I rise to speak in relation to the Social Services Legislation Amendment (Ending the Poverty Trap) Bill 2018. The rate of Newstart is obviously too low, and the government needs to increase it. It's a very simple matter, but complex. But it has to be addressed. It's just not possible to live with dignity on $40 a day. I don't know whether you've ever seen people walking in the streets hoping to find someone that might give them a dollar to supplement their meagre bit of income in order to buy something to eat or to pay for something that they need to fix. It's not a pleasant sight.

I remember an old lady once coming from Bathurst Island. She came to Darwin, and she saw Aboriginal people and white people looking into the rubbish bins—these are the public rubbish bins on the streets—for things to take out either to eat, to sell or to use in some other manner. She remarked to me that Australia must be a poor place, because people have to live by going to the rubbish bins, and that she felt very sympathetic to the Aboriginal people. I see many things on a daily basis where I come from, in Broome, and in Fitzroy Crossing, Kununurra or any of those towns in the Kimberley and the Pilbara. I don't see the lauded words about how people are well off, how they're getting ahead, where the jobs are and how people are actually participating in a world that we would like to see them participating in. Newstart is trapping people in poverty. It's pushing them into homelessness and, if you're homeless, that's the start of many other social problems, of course. It's preventing people from getting work. If there's work to be had, it prevents people from getting it.

The refusal of the Prime Minister and the Treasurer to even acknowledge the seriousness of this problem appears very cruel and heartless. We're talking about fellow human beings, whether they're First Nations peoples or others or whether they're in their 50s or are young people. We're talking about people who have, for one reason or another, come to rely upon a measure that the government believes is very generous but in reality is not. How does the government expect people to find work if they can't afford a haircut, new shoes or a decent shirt? How are people meant to get to an interview if they can't afford to keep a car on the road or pay for public transport—if it exists? It does not in some of these places. How does the government expect people to keep healthy if they can't afford to eat well and eat good food, to replace a refrigerator or the air conditioning if it's broken down, or to go to the doctor and have their prescriptions actually filled?

This is why Labor took to the election a commitment to review the payment, the purpose of which was to address Newstart's inadequacy by increasing the rate and lifting people out of poverty, just as we did with the pension when we were last in government. But we did not win the election, and the ball is now in the government's court, sitting there waiting for the Treasurer and Prime Minister to act, to show some compassion and empathy with those in our society who live in poverty.

The current rate of Newstart is simply not enough to live on, and the government must increase it. There are over 722,000 Australians who rely on Newstart and almost one million Australians who rely on Newstart and other allowances, like sickness allowance and youth allowance, that are linked to the Newstart rate,. We've already heard that there is broad support for boosting Newstart. Boosting it is backed by the Business Council of Australia, as well as former Liberal leaders John Howard and John Hewson—I bet they live on more than $40 a day. COTA, the Council on the Ageing, and National Seniors have called for its increase as have COSBOA, the Council of Small Business Organisations Australia, the Small Business Association of Australia, Deloitte, KPMG and the Local Government Association. We can also add the Hon. Barnaby Joyce, Senator Canavan and Senator Sinodinos to the list because of their concerns about it. Even the Reserve Bank has lent its support to an increase. When the governor, Philip Lowe, was asked recently in Adelaide whether Newstart should be increased, he said:

Anything at the moment that can boost income growth is good for the economy.

…   …   …

… stronger support payments for unemployed people will help as well but that's up to the government.

He's right. It is up to the government, and they need to explain why they keep ruling it out.

Increasing Newstart would be a very quick and very effective form of economic stimulus, as so many economists have pointed out. It would help people in those regions under the most economic pressure. An increase would be spent locally, creating jobs where they are needed and boosting the local economy. With interest rates lower than during the GFC, wages growth at a record low and unemployment and underemployment hurting families, the government has an economic opportunity here to again show how great it is at managing our economy by dealing with the least within it. Of course, the government is trying desperately to say, 'There's nothing to see here; you're all mistaken. Newstart's okay.'

In defending the indefensible, there are three red herrings that Liberal and National ministers, MPs and senators have in high rotation: people get other payments; Newstart is indexed; it's only a temporary payment. Each of these arguments is disingenuous. People on Newstart deserve to be treated with much more respect by this government. It's their government, after all, as well.

'People get other payments.' A favourite argument of ministers at the moment is to say, 'Yes, 40 bucks a day isn't very much, but, don't worry, people get other payments.' The Treasurer, Mr Frydenberg, said last week:

We're not changing Newstart and the reason why is Newstart recipients, 99 per cent of [them] receive other benefits, so it might be a parenting benefit or another benefit.

This is a very sneaky line for the Treasurer to put forward, especially when he has literally thousands of bureaucrats to make sure his numbers are right.

Let's look at the facts according to the government's own figures. In answers provided to Senate estimates, the Department of Social Security confirmed that 52 per cent of all Newstart recipients receive only the base rate of Newstart plus supplements. The most common of these is the energy supplement, which is just $8.80 a fortnight. The department has also confirmed that, on average, 52 per cent of Newstart recipients receive just $14.64 a fortnight in supplements. This means the majority of people on Newstart are getting by on $40 a day plus a dollar. 'A Dollar Down and a Dollar a Week'—haven't we heard that song before! One of the most egregious examples of out-of-touch politicians was the Treasurer seriously arguing that Newstart doesn't need to go up because most Australians get a dollar a day of other payments. This line is nothing more than a cynical sound bite. Even rent assistance is only received by 21 per cent of couples and singles on Newstart. The average rent people are paying is $456 a fortnight, and only $115, on average, is covered by rent assistance. The Treasurer should choose his words more carefully when he's talking about people in such difficult circumstances because he does wield an enormous amount of influence and, if the poor and the struggling and those who live in hopelessness do not hear words of encouragement from the second most powerful person in the country—the Treasurer—then what hope is there for them?

'Newstart is indexed.' The second red herring is the Liberals and Nationals claiming that Newstart doesn't need to be increased because it's indexed twice a year. But this is the problem: it only goes up by CPI, not the cost of living and not in line with wages. That is why people on Newstart have fallen so far behind. There hasn't been a single real increase in Newstart payments in 25 years. It simply hasn't kept up with community living standards. This compares to the pension, which Labor reviewed and boosted significantly when we were in government. Labor's changes mean the pension is indexed by whichever is higher between the CPI and the Pensioner and Beneficiary Living Cost Index, which is a better measure of cost of living. The pension is also pegged to wages. Of course, the government wants to cut pensions by linking indexation to CPI, which would be a cut of $80 a week within 10 years.

'Newstart is a temporary payment.' The third red herring regularly deployed by the Liberal and Nationals is that Newstart is only a temporary payment. This is not the case for many people, particularly if they're in regions where local economies have been hit hard by structural change. In fact, the average time a person is on Newstart is three years. Can you imagine living on $40 a day for three years? One month would drive you insane. Three years would make you give up hope that your country cared for you or that your government had any compassion for your circumstances. The question the Prime Minister and the Treasurer and the minister for social security really need to answer is not 'Could you live on $40 a day' but 'Could you live on $40 a day for three years?' That's the question. Of course no-one can do that without falling into poverty.

Older people are on Newstart. Many of those on Newstart for long periods are older Australians. People over 55 make up the single largest group on Newstart. There are more than 183,000 Australians between 55 and the pension age who are on Newstart. That is one in four people on Newstart.

It is very difficult to get another job if you have been made redundant in your late 50s. After working for decades at Holden, Ford or Toyota—most of those are gone—or at whatever employment you had, it's very hard to get re-employed in your 50s, particularly if you worked in the trades areas or other hard areas. There are many men, in particular, in this situation who are struggling to live with any dignity after working for so long.

We also speak of people on the land. There are many women who have struggled to get back into the workforce after caring for their children, looking after aged parents or divorce. This is counter to the tired old stereotype that those people opposite like to rely on, which is linking unemployment to young people. It's time the government stopped simply ignoring those on Newstart.

The head of COTA Australia, Ian Yates, has called out the government's weak arguments for refusing to increase Newstart. He said:

Just blanket saying no on the basis that it is a short-term benefit is flying in the face of reality when people over the aged of 50, and particularly over the age of 60, are regularly staying on it for many years.

It is very difficult to live on Newstart, so for older unemployed people they run down their assets and they make decisions in terms of what they eat, medicines that they might have … that again is counterproductive because that ends up costing the Government more in the health system.

Ministers claim that the pension is generous. Of course, a dismissive and uncaring attitude towards pensioners and people who rely on social security is what Australians expect from the Liberals and Nationals. Just last week, the Minister for Families and Social Services described the pension as generous. She said:

I don't think a debate about whether I could live on (the pension) or not is relevant. It is a generous amount of money …

If the pension is generous, what would the minister describe Newstart as?

All of this does matter because she's in charge. Any increase in Newstart won't happen until the minister and her government drop their opposition to it. Newstart can only increase if the government want it to increase. We all know that Newstart cannot increase until the government want it to increase; they have the numbers in the House of Representatives. It's only the government that can get money bills through the House of Representatives, as was ably told to us earlier.

Increasing Newstart is very important, but this bill we are debating today is itself simply playing politics. That's because we know the government is responsible for this and the government has to do something about it. There is absolutely no chance of increasing Newstart unless the government comes to the party. We know that's not going to happen, so we've wasted a bit of time here this morning. It's something that the Prime Minister and the Treasurer have ruled out. It is time the government reviewed the payment and put forward an increase which it will support. Until it does that, hundreds of thousands of Australians will remain needlessly stuck in poverty, shut out of work and cut off from playing a full role in our community.

Australians are worried about inequality and disadvantage. We don't view ourselves as an unequal society. We don't want to tread the American pathway, but we see poverty, disadvantage and homelessness in our country. (Time expired)