The nation’s peak welfare group has demanded an even higher increase to Newstart as people on the welfare payment confront rising living pressures.
The Australian Council of Social Services now wants a $95 increase to the $279.50 weekly payment, after previously demanding a $75 a week rise.
In a budget submission released on Thursday, it says increasing food, rent and medical costs are widening inequality in the face of decades of inaction on the welfare payment.
ACOSS CEO Dr Cassandra Goldie told SBS News that people on the allowance are skipping meals, sleeping rough and missing medication to get by.
Australian Council of Social Service (ACOSS) CEO Cassandra Goldie at Parliament House in Canberra. Source: AAP
“Life happens to us – people lose jobs, people get sick, people have relationships that break up - we urge the government to act,” she said.
“We have got people relying on Newstart going without food and not able to turn on the fan because they are trying to save on their power bills.”
The call to increase the rate by another $20 comes after ACOSS indexed the minimum amount needed to cover the costs of living for a single unemployed person.
ACOSS says there is an expanding gap between the rate of Newstart, rental assistance and youth allowance payments, and the living expenses people incur.
It wants the Newstart rate indexed on wage growth, like the pension, instead of inflation, saying it has not been increased in real teams in 25 years.
ACOSS wants the rate of Newstart increased by $95 a week. Source: AAP
Dr Goldie said this is “a matter of urgency” for those living on the $40 a day rate.
“Every year that goes by prices are going up. We know that food, in particular, is something we are very worried about, “ Dr Goldie said.
“One of the terrible consequences of these horrible bushfires and the impacts of the drought is we are going to have the cost of essentials going up.”
ACOSS used research from UNSW’s Social Policy Research Centre, which helped formulate their previous $75 figure, to find basic weekly living costs have risen around $26 to $460 a week.
There has been widespread support from politicians of all sides of politics for a rate rise to the welfare payment.
But the federal government has remained firm in its argument that it would rather people get a job, citing the number of people on Newstart has fallen to around 680,000 people.
The Morrison Government is also seeking to overhaul the way welfare recipients report employment income to simplify the process and to ensure payments are correct.
ACOSS' ambitious call to increase welfare payments including Newstart, youth allowance and sickness allowance for some 850,000 people is estimated to cost $3.8 billion.
It argues this investment would be targeted at those most in need in society, help rural and regional communities, and even those affected by bushfires.
“We face stagnating incomes, rising unemployment, and massive gaps in our critical and essential services … then facing the climate crisis and the devastation of extreme weather events,” Dr Goldie said.
“We need to invest and we need to invest big."
To help pay for this spending, ACOSS is advocating for a crackdown on tax avoidance from international business and tax trusts.
Australia was hit hard by bushfires in 2019. Source: Getty Images
It also puts forward introducing a ‘sugar tax’ on sweetened drinks and broadening the income test on the medicare levy, as well as taxing alcohol on the basis of its content.
The welfare group is also pushing for $2.3 billion to increase home care packages for aged care and $2 billion for more community services, including for the homeless, mental health and food relief services.
Cutting fossil fuel subsidies and instead using the billions to fund disaster relief and a transition towards a low-carbon economy is another call.
Dr Goldie says climate change widens and entrenches poverty, commending the federal government for preparing to sacrifice its surplus to invest in fire-affected communities.
Prime Minister Scott Morrison recently announced $2 billion for bushfire recovery through a range of support measures.
But Dr Goldie said she wishes this same political will would be shown investing in others in need.
“The federal government can decide to what extent it is going to lift up the lives of people on a daily basis,” she said.
“The solutions are clear and we absolutely have a decision before us.”
The federal budget is due to be released on 12 May.
