Dole Cuts Will Put Recipients 32% Below the Poverty Line

Proposed cuts to unemployment benefits are “cruel” and could force recipients to a “historic” 32 per cent below the poverty line, according to new research.

A study by the Australia Institute has showed the level of financial support for the unemployed has fallen sharply since the early 1990s and is now 30 per cent below the poverty line.

According to researchers, the decision to remove compensation for the carbon tax could stretch the poverty gap by a further 2 per cent by June 2019 for those on unemployment benefits.

The research, Inequality & Poverty in Australia: The Case Against the Removal of the Clean Energy Supplement, also highlighted a “staggering inequality” in Australia with the 10 richest families possessing the same wealth as the poorest 3.9 million Australians combined.

Australia Institute executive director Ben Oquist said people on the dole were falling well below the poverty line and further cuts would increase inequality.

“At the time of the Sydney Olympics, a couple on unemployment benefits had enough income to put them on the poverty line. They are now 30 per cent below it,” Oquist said.

“Unbelievably the government plans to actually cut unemployment benefits as one the first acts of the new Parliament with the removal of the clean energy supplement for all new welfare beneficiaries.

“Despite years of work and reports arguing for the need to increase the dole – including from the BCA [Business Council of Australia] – the government is going to cut it by $8.80 per fortnight for singles and $7.90 each for couples, sending their income to an historic 32 per cent below the Henderson poverty line.”

Researchers argue the government’s position is contrary to the “growing consensus across business and the community sector” which is calling for income support to be increased, not decreased.

“Business groups, from KPMG to the BCA, recognise that unemployment benefits have reached such chronically low levels that it is diminishing opportunities to effectively bring people back into the workforce,” Oquist said.

“But the Coalition seems intent on cutting Australia’s shamefully low welfare support. It’s cruel, out of touch and will not benefit the Australian economy.”

It comes after the government announced plans in the 2016 budget to close carbon tax compensation to new recipients of government welfare benefits.

The move could save the government $1.4 billion over the forward estimates.

However, the cuts would affect the unemployed, pensioners, students, people with a disability and carers, with the study showing a single pensioner could be hit by $366 dollars per year.

Oquist said it stands in contrast to the pre-election budget which gave high-income earners a $315 a year tax cut in addition to those on more than $180,000 having the budget repair levy cut.

“The pre-election budget gave tax cuts exclusively to the highest income earners,” Oquist said.

“A policy which gives more to the richest while cutting support for people below the poverty line will only increase inequality in Australia,” Oquist said.