Number of Aussies on Newstart at Record High
2 February 2015 at 10:15 am
The number of Australians on welfare payments is increasing with the number of people on Newstart for more than 12 months at its highest level ever.
Figures released by the Department of Social Services (DSS) show that at the end of 2014, 527,318 had been receiving the Newstart Allowance for at least one year, an increase of almost 13 per cent on the previous year.
The total number of people on any kind of Newstart Allowance or Youth Allowance increased 827,039 to 858,373, a jump of 3.8 per cent.
The total number of job seekers increased by 3.6 per cent overall from 406 703 to 421 245.
Despite the increase in demand for Newstart, Australia’s peak welfare body, the Australian Council of Social Services (ACOSS), called for the amount that eligible people receive to be increased.
“It is disturbing that some of the harshest social security measures in last year's Budget targeted working-age payments, especially the proposed six month wait for unemployment payments for many people up to 29 years of age, when the major drivers of growth in Budget expenditures lie elsewhere,” ACOSS said in its 2015 Budget recommendation.
“The main purpose of income support for unemployed people is to share the risk of unemployment between each individual and Government. The removal of income support for up to six months each year from unemployed young people would undermine that purpose.
“We are not aware of any other wealthy country that has responded to rising youth unemployment in this way.
“A fairer and more productive approach is to keep young people engaged with education, training and the labour market and support them in their transition to paid employment through income support and effective employment and training programs.”
ACOSS argued that an increase of $51 per week in Newstart payments should be introduced at a cost of $1.3 billion from 2016 to 2017.
“The real value of Allowance payments has not increased since the early 1990s, and these payments were excluded from the $32 per week in pensions announced in 2009,” ACOSS said.
“The Henry Report on the tax-transfer system recommended that the single rate of Allowance payments be benchmarked to two-thirds of the partnered rate, as was implemented for single pensioners in 2009.
“This would currently require a $51 per week rise in the single rate of Newstart Allowance, which should also extend to other Allowances such as Austudy and Abstudy payments and the Youth Allowance for those aged over 17 years living away from their parents. Payments for sole parents on Newstart Allowance should also increase accordingly.
“As the Henry Report noted, there is room to increase these payments without significantly weakening work incentives. A single adult on Newstart Allowance who obtains a fulltime job at the minimum wage would more than double their disposable income.
“This payment increase would have a substantial and immediate effect on reducing poverty, including among sole parent families affected by last year's payment cuts (which would be fully restored for the poorest of those families by a combination of the Newstart Allowance and Family Tax Benefit increases proposed here).”