The City of Port Adelaide Enfield, in Adelaide's northern suburbs, made history on August 8 when it became the first local government in Australia to publicly advocate for the Newstart Allowance to be raised.
The motion, calling on Port Adelaide Enfield Council to lobby the federal government to raise Newstart, as well as produce a report into how council can assist local unemployed residents who are struggling, was sponsored by Councillor Michelle Hogan, and seconded by Councillor Peter Jamieson. It was passed by 11 votes to 2.
About 5100 Port Adelaide Enfield residents are unemployed. Its unemployment rate is 8.6%, significantly above the South Australian average.
The unprecedented decision came after weeks of sustained lobbying by Anti-Poverty Network SA, residents, welfare recipients and community organisations. Councillors were inundated with story after story after story of how difficult it is for unemployed people to survive, let alone live well, on Newstart. And they listened.
Anti-Poverty Network SA spokesperson Pas Forgione said: “The City of Port Adelaide Enfield has demonstrated leadership by sticking up for its unemployed residents — residents living in poverty, struggling to find work in an unfavourable labour market and facing wave after wave of attacks on their rights and their characters, from hostile governments and media outlets.
“We are glad they recognised the strong social justice, public health, and economic arguments for why Newstart needs to be raised.
“It is good for local jobseekers, good for the local community and good for council services and programs that are placed under pressure because of increasing levels of hardship. This is a no-brainer. Even business groups have acknowledged the inadequacy of Newstart.
“This positive decision is a sign of increasing public sympathy towards the unemployed and others receiving Centrelink payments and a sign that those on welfare payments are organising themselves and pushing back. We hope other councils will follow. There is no excuse for them not to.”
None of Australia's welfare payments are generous, but Newstart, at $267 a week ($14,500 a year), is $160 a week ($8000 a year) below the poverty line.
Newstart has not been raised in real terms since 1994. Australia ranks second-worst in the developed world for rates of poverty among the unemployed. Newstart has fallen behind the rest of the community. It is now less than 18% of the average wage and less than 41% of the minimum wage.
According to research by the Australian Council of Social Service (ACOSS):
- 37% of recipients are unable to pay their bills on time or see a dentist
- 46% are only able to afford second-hand clothes most of the time
- 40% postponed or were unable to purchase Christmas presents
- 50% are unable to raise $2000 in the event of an emergency
- 44% report having unsustainable levels of debt, owing more than they can afford
- 50% report turning off heating and cooling to save money
- 32% had skipped meals in the past year
- 25% are suffering a “housing crisis”, meaning they are spending more than 50% of their income on housing
- 20% report not having enough money for essentials like housing, food and electricity
- 63% report their income had fallen behind the cost of living over the past two years.
Compounding their problems is the worsening ratio between the number of jobs and the number of job-seekers.
There are about 170,000 job vacancies nationwide. Those competing for those vacancies include about 730,000 unemployed people and 1.1 million underemployed (those who are working but are looking for more work). The number of job-seekers totals 1.8 million, which equates to one job for every 11 job-seekers.
An alarming implication of this growing shortfall in jobs is that Newstart is becoming an arduous, long-term ordeal, rather than a brief bout of pain. About 70% of Newstart recipients are unemployed for more than 12 months.
Changes to eligibility requirements for two other welfare payments, Disability Support Pension and Parenting Payment Single, mean that there are also growing numbers of individuals with significant health issues — 25% of Newstart recipients have a diagnosed disability — and sole parents, languishing on the payment.
Life on Newstart
Heather Eckermann, a Newstart recipient and casual worker from Windsor Gardens, told the Port Adelaide Enfield mayor and councillors: “Financially, it is almost impossible to plan beyond the next payday; long-term planning on unemployment benefits just does not exist.
“Christmases during my periods of unemployment were always the hardest times for me. I’d get a $60 blouse from my grandmother while I give her a $5 hankie. Yes I know, it’s the thought that counts, family togetherness and so forth. But still I’d like to be able to think about my grandmother with a $20 note instead of $5.
“A rise in Newstart payments will take away the stress of living in poverty and allow people to focus on life in a more positive light and create a healthier lifestyle. By increasing unemployment benefits, we don’t have to live in poverty, we can live with dignity.”
Heather, who has experienced multiple periods of stable employment, followed by phases of unemployment, said: “I am now working part-time and am relatively safe in my position. I still rely on Centrelink payments to supplement my income and I am finally beginning to work my way out of the financial hole in which I found myself during my last period of unemployment.
“Without my Centrelink payment, which complements my work income, I can guarantee I would be homeless. My current rent comprises of 58% of my employment income. With my Centrelink payment, my rent consists of 45.3% [which is considered “housing stress”, and is only slightly below “housing crisis”].
“That is still nearly half of my disposable income going to rent.
“My current employment status reflects the vast majority of the trans [gender] community in South Australia. As a community, we generally come under the category of unemployable or underemployed.”