Newstart: It’s time to raise the rate

In many cases Newstart payments do not even cover the costs of weekly rent, let alone utilities and food.

The Australian Council of Social Service (ACOSS) has started a campaign to raise the single rate of Newstart, Youth Allowance and related payments.

Currently more than 800,000 people are without paid work and are struggling to meet basic needs such as housing and food. There are countless stories of those living on welfare having to choose between paying a bill or eating a meal. Anyone who has been unemployed knows it costs money to seek employment, from printing your resumes to the cost of travel to interviews, appropriate clothing or a haircut. It is nearly impossible to look for paid work if you are homeless and hungry.

Newstart payments have not risen in real terms in 24 years, while the cost of living continues to rise. Since the last real rise in 1994, Newstart rates have been indexed to CPI.

Newstart payments have been particularly neglected as other payments have been boosted either by above-inflation rate rises like the pension in 2009 or with one-off “bonuses” such as the Household Stimulus Package introduced by the Kevin Rudd government in 2009, which saw those on age and disability pensions, carer payments and Family Tax Benefit receive substantial amounts but recipients of Newstart received nothing.

The current single rate of Newstart is $273 a week or $39 a day. If you include the energy supplement and maximum payments for rent assistance and family payments, the most a single person who rents can get is $345 a week or $49 a day.

The median cost of rent in Melbourne is $450 a week; in regional Victoria it is $395. In Sydney the average cost of renting a private room in a shared rental property is $300–$400 a week. In many cases Newstart payments do not even cover the costs of weekly rent, let alone utilities and food.

The South Australian Council of Social Service has published a series of graphics entitled “poverty premiums”, making the point that being poor costs extra money.

An example is the cost of internet data, something that is more affordable if you have a home internet plan. If you are homeless, your only internet connection might be via your phone which is a 328% poverty premium.

Bank dishonour fees are more likely to apply and accumulate for those on low incomes.

Additionally, most energy companies offer discounts for customers who pay on time. If you don’t have the money up front you can pay up to 28% extra on your power bill.

It was recently reported that CEOs in Australia now earn an average $4.75 million — 78 times more than workers on an average wage. CEO wages have increased 46% faster than typical workers’ earning over the past 12 months. In fact, you know things are grim when the governor of the Reserve Bank of Australia says “it would be a good thing if workers [were] prepared to ask for larger wage rises”.

The unemployed and the employed alike are increasingly feeling the pinch. In the coming period campaign groups, such as state-based anti-poverty networks, the Australian Unemployed Workers Union and the First Nations Workers Alliance, will be campaigning for rises to Newstart and better conditions for those engaged in Work for the Dole programs.

The South Australian Anti-Poverty Network has already launched an “It’s Time” campaign to increase Newstart which includes a song specifically written for the campaign.

These, together with the Australia Council of Trade Union’s “Change the Rules” campaign will be critical in challenging the increasingly precarious situation neoliberalism has put us in.