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

I move:

That this bill be now read a second time.

I seek leave to table an explanatory memorandum relating to the bill.

Leave granted.

I seek leave to have the second reading speech incorporated into the Hansard.

Leave granted.

The speech read as follows—

SOCIAL SECURITY AMENDMENT (CARING FOR PEOPLE ON NEWSTART) BILL 2017

Inequality is one of the greatest challenges we face; income inequality is growing in Australia and many people battle daily with meeting basic living expenses and poverty.

Inequality creates significant negative effects on individuals' physical and mental wellbeing, societal cohesion and stability, and economic growth and productivity.

Currently there are 2.99 million people (13.3% of the population) living below the poverty line in Australia, after taking account of their housing costs. 731,300 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 correlated with socio-economic status. Poverty limits access to safe, secure and appropriate housing, transport, employment outcomes, childcare, and many other aspects of full participation in society. Poverty is a daily challenge for many Australians, undermining their ability to have 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 a wealthy country and have the resources available to us to significantly reduce the existing rate of poverty, if only there was the political will to do so.

No one in a country as rich as Australia should be living in poverty.

Of those on income support, 36.1% are living below the poverty line, including 55% of people receiving Newstart Allowance.

The Australian Greens want a stronger social safety net and adequate income support payments.

A strong social safety net is the foundation of a more inclusive and productive society.

We need visionary policy to overcome the underlying drivers of poverty, such as affordable housing, 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 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, under-employment, short-term contracts and uncertain weekly incomes – means that we need a twenty-first 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 copes 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 twenty-first century social safety net that supports a productive workforce and an inclusive community. Quite simply people who are unemployed and on Newstart are struggling to survive because the payment is inadequate and puts them below the poverty line, poverty itself, is a barrier to employment.

The evidence provided to the committee inquiry Bridging our growing divide: inequality in Australia. The extent of income inequality in Australia in 2014 showed that the level of the Newstart payment is too low.

In conclusion, the report found that:

It is clear that income is a key factor in determining the economic wellbeing 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 foregoing health services with out of pocket expenses, refinancing a mortgage or ending childcare or private school tuition for their children. A more prolonged period of unemployment may lead to despondency, mental health problems, marital breakdown and homelessness.

Australia's key unemployment payment, Newstart, hasn't 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 the previous two parliaments to increase the single rates of Newstart and independent Youth Allowance. Leading community organisations, business and the community have all called repeatedly to increase this inadequate payment. Despite this, both Liberal and Labor governments have failed to act.

Instead, the Government has successively hacked away at the income support system, reducing much needed support. Instead, the Government has deliberately and maliciously propagated myths and is demonising those accessing income support, without any compassion or understanding of the reality of living below the poverty line.

The fact is, there are not enough jobs. 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 and attacking people makes life harder and helps to trap people in poverty, making it more difficult for people to re-enter the workforce. 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 the Bill's introduction is $535.60; $338.60 less per fortnight than the maximum rate of payment for singles (including the Pension Supplement) on the age and disability pensions. The maximum fortnightly payment for Youth Allowance (living away from home) is $437.50; $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 increased by $110 a fortnight.

It is not hard to imagine what people trying to live on these payments could do with the additional money. They will spend it and drive the economy at the same time.

This change will bring relief to those on the very lowest rates of income support and assist them out of poverty.

The focus on singles is based on evidence that these households are the most at risk of poverty. The ACOSS report Poverty in Australia 2016 found that single people generally faced a significantly higher risk of poverty than couples (24.6% to 10.1%), while 33.2% of single parent families are living in poverty (compared with 11.3% of couples with children). This reflects, in part, the economies of scale available to people living with partners.

The Bill will also index other social security allowance payments and pensions to the higher of Consumer Price Index (CPI), Male Total Average Weekly Earnings (MTAWE) or the Pensioner and Beneficiary Living Cost Index (PBLCI). This will ensure that the gap between pensions and allowance payments does not continue to widen.

The call for an increase in the base rate of allowance payments has received widespread support from not only social services organisations but also from business groups, unions and various economists.

In 2012, the Senate Education and Employment Reference inquiry titled 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; this was in 2012, 5 years ago. Despite the finding, the Liberal and Labor parties refused to take action, the Greens then, and now, are the only party calling for a raise in this inadequate payment.

As well as assisting people out of poverty, the key reasons for increasing the single rates of Newstart and independent Youth Allowance include:

(a) the extended length of time that many recipients spend on the payments;

(b) the cost of living pressures faced by those in receipt of the single rate of the allowances; and

(c) the growing gap between the pension and allowance payment types due to different methods of indexation.

This Bill will directly assist single people living on Newstart and independent Youth Allowance for an extended period of time by providing them with a more stable, adequate base income.

The gap between the allowance and pension payments is increasing. Newstart Allowance is indexed to movements in the CPI in March and September each year and Youth Allowance is indexed to the CPI once a year in January. Pensions are indexed twice a year (in March and September) by the greater of the movement in the CPI or the PBLCI—an index designed to better reflect the price changes affecting pensioners—and the rate is also benchmarked to a percentage of Male Total Average Weekly Earnings.

This Bill will address this widening gap, by ensuring that these classes of payment are indexed by the same methodology and that they are in line with changes to both prices and wages.

A $110 increase to the eligible payments will ensure a fairer and more straightforward social security system, and immediately help Australian people who are living in poverty on these income support payments. Better indexation will help maintain the value of an increase into the future.

I commend the Bill to the Senate.

I seek leave to continue my remarks later.

Leave granted; debate adjourned.