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Magazine of the Socialist Party in Australia

Government refuses to increase Newstart

The Coalition government is refusing to increase Newstart payments for the unemployed. This is despite pressure mounting on them from many quarters including the trade unions, NGOs, opposition parties, and even some Coalition MPs.

A single person on Newstart currently receives around $278 a week. That is a mere $40 a day. This is nowhere near enough for anyone to get by on.

Last year the Australian Council of Social Services called for a $75 a week increase to Newstart. Labor are now also talking about the need to raise Newstart, something they previously were against. While Labor have refused to commit to an actual figure, they have said that they would review the amount closer to the next election – in 3 years.

Despite pressure being put on the government, and the obvious evidence that Newstart is too low, the government is still trying to claim that Newstart payments are adequate.

In August they released figures showing a 5% drop in the number of Newstart recipients. The Coalition are trying to say that this is an indication that Newstart is functioning as intended, because people are moving on from it into jobs.

However, this data is inconsistent throughout the country. In Palmerston, Northern Territory the number of recipients has actually grown by 20%. In outback communities such as Katherine and Barkly, there has been a 16% increase. In outback South Australia it has gone up by 5%.

The truth is that unemployment and underemployment are getting worse. Some of those who have moved off the payments would have done so because of the gruelling regime that is placed upon them by Centrelink and the private job network providers. Rather than ‘work for the dole’ many people would have instead sought support from family and friends.

To give an example, between July and December last year, over 55,000 people who are homeless or on the cusp of homelessness had their Newstart payments suddenly suspended. Of this, around 5000 went on to lose their entire payments. It is by targeting the most vulnerable that the government manages to meet it targets of reducing the number of Newstart recipients.

The government claim that they are focused on “job creation”. Anne Ruston, the current social services minister, claims that everyone currently on Newstart should be able to find a job with government assistance.

But this statement is completely out of touch with reality. According to the Australian Unemployed Workers’ Union for every vacant job there are 15 people unemployed or underemployed. This says nothing of the quality of the available jobs either.

The idea that the equivalent of $15,000 a year or less is enough to survive on for any length of time is ridiculous. A survey from the Australian Council of Social Service found that 84% of people on Newstart have skipped meals to save money.

A $75 a week increase would be a good start but is not nearly enough to help bring recipients out of a life of poverty. The Socialist Party demands an immediate increase of $250 a week for single adults, with future increases linked to inflation. This money could easily be raised by increasing taxes on the mega profits of the top corporations.

Newstart should be a safety net for any worker that finds themselves out of work. After all, workers do not decide what jobs are available and when. If employers cannot provide enough jobs then we should be entitled to welfare payments that ensure a decent standard of living.

While this sounds reasonable, it is resisted by the bosses as they prefer the threat of unemployment to hang over the heads of workers. This keeps them desperate and discourages them from asking for higher wages.

While the bosses try to play unemployed workers off against those with jobs, we should see decent Newstart payments as something that is in all of our interests.

A rise in Newstart payments will only be won if both employed and unemployed workers unite and fight for it. This is how governments were forced to provide welfare payments to begin with. Unions should be leading calls for an increase in Newstart, linking it with an increase in wages.

But ultimately poverty and inequality will not be eliminated by a fundamentally unequal system. We need to campaign for a democratic socialist society that creates enough jobs and provides enough wealth for us all to live comfortably.

By Kai Perry