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

My question is to the Minister representing the Minister for Employment and Workplace Relations, Senator Wong. In light of the fact that Newstart has now been found to be inadequate by the Senate inquiry last year, the latest round of indexation for those on Newstart has seen the base rate increase by just $4.40 per fortnight while the base pension rate has increased by $21.70 per fortnight. Single parents now living on Newstart will receive a whole $4.80 per fortnight. If they were on parenting payment single they would have received $19.60. However, it was announced last Friday that rents in Perth for the last quarter have gone up by 4.4 per cent or $60 per fortnight. How does the government expect those on Newstart and in particular single parents to be able to pay this increase and maintain secure accommodation?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

Obviously, I will make a number of points to start with. Newstart is designed to support people while they are looking for work. I am very conscious that this is an issue that a range of individuals in this chamber have looked at in detail. It is the case that it is very tough for people to live on low or fixed incomes. In terms of the indexation issues that have been raised, they obviously predate this government. Indexation arrangements for allowances and pensions have been a longstanding feature of our social security system.

In terms of the position the government has taken, I want to make clear a few of the things that have been done to try to support particularly sole parents, who were referenced by the senator. I start by making the point that we on this side do believe that the best way you can ensure a family's security is to support and encourage people into work. The evidence of intergenerational disadvantage that results from long-term unemployment is very cogent. The question is: how do you support people into work?

I make the point that this government has put in place a very substantial amount of assistance. For example, the government is investing some $5.9 billion and reforming Jobs Services Australia to target assistance to those most in need. Of the over 500,000 Newstart recipients, 150,000 get tailored assistance in training, skills development and work experience. The senator would also be aware of the taper rate changes which were part of the previous budget which ensure that sole parents moving onto Newstart retain more of every dollar they earn.

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

Mr President, I ask a supplementary question. The minister did not adequately answer the question. I ask again: how does the government expect single parents to pay their rent when not only has rent in Perth gone up by $60 a fortnight but transport has gone up by 4.7 per cent, the basket of goods I bought last year when I was living on Newstart has gone up by 6.2 per cent and health has gone up by 9.5 per cent? How are these increases in cost-of-living prices offset by a measly 2.2 per cent rise in indexation?

John Hogg (President) Share this | Link to this | Hansard source

Order! That is a very long question. I call the minister.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I suppose the first response would be that it would be incorrect to look at only one program to suggest that that was all particularly low-income families were receiving. The senator would be aware that there is obviously the family payment system, the school kids bonus that the government has put in place as well as a supplement which she may or may not have referred to in her question.

In terms of the priority for low-income families, you can see from the policies of the government, particularly the increase in the tax-free threshold, which is a very substantial reform to the tax system, that it is primarily geared at low-income Australians. Unlike the coalition, we do not believe that tax reform is simply about taking away from people on low and middle incomes. We have prioritised in the tax reforms that we have put in place and in the superannuation reforms we have put in place low-income families such as the ones to whom the senator refers.

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

Mr President, I ask a further supplementary question. Current projections if indexation remains the same are that Newstart will be about one-third of the age pension. How far does this gap have to widen before the government realises that this is in fact not an incentive to work?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

As I said, these indexation arrangements are not a reform put in place by this government; they are a pre-existing feature of Australia's social security system. I acknowledge there is demonstrably different indexation and therefore different outcomes depending on whether one is on a pension or an allowance. I, like many other Labor senators, have received representations in relation to that.

I again make the point that it would be wrong to look at only one allowance as the only way in which this government is providing support to low-income Australians and unemployed Australians. I also make the point—and I appreciate there is a difference of views between us and Senator Siewert and her party—that we do believe that the best way to alleviate family poverty is to bring people into the workforce, to engage people and to ensure people are participating. That is the Labor government's position and has been for many years now.