Tim Storer (SA, Independent) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Social Services, Senator Fierravanti-Wells. The Newstart allowance for a single person stands at a low $277.30 per week. I recognise that it was increased by $7 in early March. Newstart hasn't lifted in line with national living standards for a quarter of a century. Newstart is indexed to CPI rather than wages. Wages have a much greater impact on living standards than CPI and have grown faster than CPI over time. As a result, Newstart has shrunk to the level of average wages, median wages, minimum wage and age pension and is set to shrink further. The Business Council of Australia, in its submission to the 2012 Senate inquiry into Newstart, argued for increasing Newstart on adequacy and fairness grounds. KPMG, the Australian Council of Social Service and well-respected economists such as Chris Richardson have made similar calls. Will the government take the BCA's advice and increase Newstart to be reflective of the current need?

Concetta Fierravanti-Wells (NSW, Liberal Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I thank Senator Storer for his question. The coalition knows that the best form of welfare is a job. The government wants a welfare system that supports the most vulnerable, encourages those capable of work or capable of study to do so, reduces intergenerational welfare dependency and is sustainable in the future. ACOSS argues that Newstart, on its own, is too low. However, less than one per cent of Newstart recipients receive Newstart alone. The other 99 per cent of Newstart recipients receive at least one additional payment and/or supplement based on their circumstances, as part of our strong social security safety net. This includes providing rent assistance to those in the private rental market and family tax benefit to those raising children. The coalition knows, as I have said, that the best form of welfare is a job, and under this government we have seen the largest increase in jobs since the GFC. The system also allows recipients to earn income from work or other sources before their payment is affected. It is also important to note that many recipients of Newstart do not remain on the payment for long. Around two-thirds of those granted Newstart exit income support within 12 months.

Our welfare system encourages those capable of work or study to do so, while supporting vulnerable people within our society. Specifically, Australia targets a bigger share of its cash transfers to households in the bottom income quintile than any other OECD country. The government remains committed to— (Time expired)

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Storer, a supplementary question.

Tim Storer (SA, Independent) Share this | Link to this | Hansard source

In August 2017, the Social Policy Research Centre of the University of New South Wales found that the single rate of Newstart and rent assistance fell $96 short of the absolute minimum required to cover the basic cost of living. Given this analysis, does the government see a case for significantly increasing Newstart?

Concetta Fierravanti-Wells (NSW, Liberal Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

As I have indicated, the government's objective is to get more people into work and to assist those on welfare to get into work. Our welfare system encourages those capable of work or study to do so, while at the same time supporting vulnerable people within our society. Specifically, Australia targets, as I said, a bigger share of its cash transfers to households in the bottom income quintile than any other OECD country. The government remains committed to providing a range of programs and payments, but this must necessarily be balanced with the responsibility to ensure that family assistance and social security payments are well targeted and sustainable into the future.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Storer, a final supplementary question.

Tim Storer (SA, Independent) Share this | Link to this | Hansard source

Will the government consider introducing an independent mechanism to regularly review and adjust Newstart, similar to what the Fair Work Commission uses to set the minimum wage?

Concetta Fierravanti-Wells (NSW, Liberal Party, Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I thank Senator Storer for that further supplementary question. As I said, the government wants a welfare system that supports the most vulnerable, that encourages those capable of working and, most importantly, reduces intergenerational welfare dependency, and we want to make it sustainable into the future. We want to encourage people to either work or study. I think it's important to note that, when we look at those on welfare, we consider them in their entirety. As I said, 99 per cent of Newstart recipients receive additional payments, additional supplements, based on their circumstances as part of our strong social security system. This includes providing rent assistance to those in the private rental market of up to $176 per fortnight for families. That equates to about $4,500 a year. (Time expired)