Magazine of the Socialist Party, Australian section of the CWI

Increase welfare payments now!

Despite the rosy picture of the economy painted by the government, the recent federal budget once again failed to deliver any relief for the hundreds of thousands of people who are unemployed and struggling to make ends meet on the Newstart Allowance.

At the moment people on Newstart receive a measly $40 a day, or $14,190 per year. This is a shamefully low level and means that people often have to choose between paying rent and buying food. It locks many of those unemployed into a spiral of poverty.

A recent study at the University of NSW showed that the Newstart Allowance hasn’t been increased in real terms for the past 25 years, and it has not kept up with the rising costs of living. The research pointed out the increase needed to cover basic necessities was at least $96 a week for a single adult or $107 a week for a couple with no children.

The already unpopular Turnbull government is starting to come under pressure to increase welfare payments. The situation is so dire that even some of the government’s big business allies have come out in favour of a raise.

Deloitte Access Economics, the Business Council of Australia and the Australian Industry Group are now all in agreement on the inadequacy of unemployment benefits as they stand.

Even the former Liberal prime minister John Howard publicly acknowledged that welfare payments are too low. Howard himself was in favour of ending the practice of linking payment increases to the rate of inflation while he was in government, but has now changed his tune.

For years representatives of welfare recipients, NGOs, charities and socialists have called for an increase to welfare payments. These calls have stood in sharp contrast to the scapegoating of welfare recipients carried out by capitalist media outlets and major party politicians.

The haughty attitudes of Liberal and Labor MPs alike show just how out of touch these politicians are. One example is the Liberal MP Julia Banks who recently said that she would have no problem living on $40 a day. Her actual income is $200,000 a year and she owns five houses!

For years sections of the establishment have pushed for welfare payments to be kept low in order to “encourage” people to work. More accurately, they keep welfare payments low in an attempt to push people into low paid casual jobs. This plays a role in driving down all wages.

The truth is that unemployment is a problem created by big business and capitalism itself. It is not the fault of working people. The system simply fails to create enough decent jobs to go around.

By early 2018, there were about 16 unemployed or underemployed people for every job vacancy according to the Australian Unemployed Workers Union, using ABS data. This includes more than one million people who are in work but want more hours, and a million ‘hidden unemployed’ who are left out of the official unemployment rate.

The situation is even worse for young people. Official youth unemployment is currently over 12%, which is more than double the national unemployment rate, but the real figure is much higher.

The Foundation for Young Australians found that more than 60% of 25 year-olds in Australia today are holding higher education qualifications yet half of them can’t get full-time jobs.

The real welfare bludgers in this country are to be found amongst the big business elite. They rake in billions of dollars in subsides and benefits while refusing to create enough jobs. With that being the case, individuals on welfare payments should not be punished and forced into poverty. They should be paid enough to live a dignified life while they are searching for work.

While pressure is mounting, both the major parties are yet to commit to raising welfare payments at all. Even the proposal of a modest $75 a week increase by the Greens was voted down in parliament.

$75 a week would help, but it would not be nearly enough to drag people out of poverty. Socialists demand an immediate increase of $250 a week for single adults with future increases linked to inflation. Funds for this could be raised by increasing taxes on the super profits of the top corporations in Australia.

This increase to welfare payments should go hand in hand with other measures to address rising costs of living and the job crisis. Unemployment is a part of the capitalist system, and can only be addressed with a socialist approach.

By Tim Tran