Right: Government claims for Newstart being part of a package that facilitates "work-readiness" are often disputed by those who complain of "meaningless" work-for dole schemes, inappropriate referrals to unsuitable jobs and training courses and, above all, the inadequacy of Newstart itself to finance anything but a subsistence life, let alone things like a basic wardrobe with which to impress employers.
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Arguments against increasing the Newstart allowance
1. The Newstart allowance is only intended as short-term support
Opponents of an increase to Newstart argue that it is important to recognise that the allowance is not a pension in the sense of the old age pension. It is not meant to supply an income to its recipients over the long term. Newstart is intended to supply temporary support for those who will soon have work; it is not meant as a permanent income for someone who will remain unemployed.
James Pearson, the chief executive of the Australian Chamber of Commerce and Industry (ACCI), has stated, The important thing to remember is Newstart isnt a pension, its to provide some help for people who are looking for work.
The prime minister, Scott Morrison, has made the same point. Mr Morrison has stated,Newstart is not intended to be a payment you live on. It supports you while you get yourself back into work.
In a Q&A program broadcast on May 4, 2018, Victorian Liberal MP, Tim Wilson, similarly stressed that Newstart was intended only as a short-term expedient to support people as they moved into employment. He stated, We've been focused very much on making sure that people can move off Newstart and get into jobs.
The same point was made by Minister for Employment, Michaelia Cash, who has stated,We focus very much on getting people off welfare and into work. The best form of welfare is a job. It is there to provide a basic safety net for those who are looking for work who are on welfare.
Ms Cash reiterated this point noting, Those who can work should work and our welfare system should be there as a genuine safety net, not as something that people can choose to fund their lifestyle.
2. The employment market in Australia is growing
Opponents of an increase in Newstart point to Australias growing job market as an indication that such an increase is not necessary.
The Australian Governments JobOutlook has stated,The future of Australian jobs is strong, with the number of workers in most industries expected to grow over the next five years. There are likely to be around 886,000 more jobs by 2023.
The Australian Governments Australian Jobs Report (to January 2018) stated that labour market conditions have strengthened considerably&with employment increasing by a robust 403,300 (or 3.3%), more than double the decade annual average rate of 1.6%. The increase in employment was due, predominantly, to a rise in full-time employment, up by 293,200 (or 3.6%) to 8,460,900 in January 2018, while part-time employment increased by 110,100 (or 2.8%) to 3,992,600. The unemployment rate fell from 5.7% in January 2017 to 5.5% in January2018, while the participation rate rose by 1.0 percentage point to 65.6%, as stronger labour market conditions encouraged more people to enter the labour market.
More recent figures have shown the same continued improvement. Australias labour market rebounded in August, 2018, with monthly jobs growth of 44,000 against a forecast rise of just 18,000. At the same time, the level of labour force participation edged higher, which left the unemployment rate unchanged at a near six-year low of 5.3%. The rebound in employment was due to a 33,700 rise in the number of full-time jobs.
Kristina Clifton of the Commonwealth Bank stated,Trend data shows jobs growth of 29,000 per month. With the working age population increasing by around 20,000 each month, this is enough to keep downward pressure on the unemployment rate&We expect above trend GDP growth over the next few years. This growth should help bring down the unemployment rate even further.
Callam Pickering of the Indeed Jobs website has observed, A further positive is the ongoing improvement in labour market outcomes for younger Australians. The unemployment rate among 15-24 year olds has declined to 11.2%, from 12.4% at the beginning of the year, with the decline particularly impressive since it has coincided with a sizable increase in participation.
Opponents of increases in Newstart argue that Australias strong employment market makes such an increse unnecessary. In February, 2018, Social Services Minister Christian Porter stated, We've worked very hard to get the growth in actual numbers and expenditure on a payment like Newstart down. So, under six years of Labor, the Newstart bill every year so the unemployment welfare benefit bill every year was growing at an average each year of 13.5 per cent every single year for six years.
The actual average growth under us since we've been in government is 3.7 per cent. What does that represent in human terms? It represents more people moving off Newstart and into employment quicker.
3. Increasing the Newstart allowance would be a disincentive to recipients to seek work
It has been argued that if Newstart were increased this would act as a disincentive for the unemployed to find work. According to this argument, if Newstart supplied a comfortable livelihood for recipients, they would no longer have a motivation to find work. They would lose their work ethic and become dependent on government support.
This line of thought has been explained by Philip Mendes, Associate Professor and the Director of the Social Inclusion and Social Policy Research Unit in the Department of Social Work at Monash University. In an opinion piece published in On Line Opinion on December 7, 2018. Professor Mendes stated, Neoliberals believe the state should act to motivate and discipline welfare recipients, and reintegrate them with mainstream social values and morality, such as self-reliance and the work ethic. Income support should shift from being a right or entitlement to a privilege. Welfare dependent individuals should be given incentives to choose employment over welfare&
Welfare dependence is a popular term often used in the News Corp media to depict the increasing (and prolonged) financial reliance of individuals or families on income support payments for their primary source of income. Neoliberals construct welfare recipients as holding fundamentally different values and attitudes to the rest of the community. Dependence on welfare is interpreted as an addiction not dissimilar to that of helpless dependence on drugs, alcohol or gambling.
Those explaining the origin and purpose of Newstart have noted that the unemployment benefit was designed to be lower than the minimum wage so it would be an incentive to move into paid work, and it was supposed to be for a 'short time' that people would be on it. As a result, it was never indexed or raised in the same way as payments such as the aged or disability pensions.
In line with the perspectives explained above, a reader of Bargain Oz has noted that a more generous Newstart could deprive people of the incentive to find work. In a comment posted on May 4, 2018, he noted, If the Newstart allowance covered food, mortgage, entertainment, takeaway coffee and food, bills, car cost, new phone&. There wouldn't be much point in working. I'd resign and get a cash in hand part time job. system
Another respondent to the same publication noted, Keep in mind that the allowance wasn't designed to be a long term living solution. There has to be a balance between being able to live and still keeping it low enough so that there is an incentive for someone to go out and look for a job.
Even at this current rate, there are already many people who live off it for years and aren't willing to get off their arse to look for work. If they were to raise that amount too high, the number of those people would just increase and that would put more strain on the welfare system
4. Increasing the Newstart allowance would take funds away from other programs
Opponents of an increase in Newstart argue that Australia is still struggling to emerge from deficit and that there are budget priorities of far greater significance than a Newstart rise.
The prime minister, Scott Morrison, has stated, Were in a $10bn deficit&while that is the best result weve had in a decade its still a deficit&so I dont think you can all of a sudden go Oh, lets make whoopee .
Among the greater priorities for funding which Mr Morrison noiminated were additional schools funding, additional hospitals funding and affordable medicines funding.
Mr Morrison also stressed the importance of funding the National Disability Insurance Scheme (NDIS). He stated, I remember being on this program as Treasurer a while back, talking about how Im guaranteeing full funding of the NDIS based on the improved trajectory of the economy and what that will mean for the governments revenues to support the NDIS. So my priorities havent changed.
The Prime Minister has further indicated that if it were possible to increase welfare spending, his priority would be to increase the old age pension, not the Newstart allowance. Responding to the Labor Oppositions announcement that it would conduct an inquiry into the edequacy of Newstart, Mr Morrison stated, I heard the other day they were thinking of increasing the Newstart payment. Well I've got to tell you, if I thought I had the money to do that, I reckon I'd be doing it for pensioners first.
James Pearson, the chief executive of the Australian Chamber of Commerce and Industry (ACCI) has made a similar point. Mr Pearson indicated that his organisation does not support an increase in Newstart. Mr Pearson stated, Increasing the Newstart allowance to the extent that it would make a material difference would be a significant cost to the budget. He argued that there are far better uses to which this money could be put, including directing it toward job creation measures. Mr Pearson concluded, Our argument is that kind of expenditure would more useful to spend on programs that are already proving to be successful in getting people who are long-term unemployed into jobs.
Numerous members of the government have stressed that it has a duty to spend taxpayer money responsibly and in the most appropriate manner. When he was Social Services Minister, in 2015, the current Prime Minister, Scott Morrison, stated,More than eight of 10 income taxpayers are needed to pay for our annual social services bill. The contribution of these taxpayers must be respected by ensuring that the welfare system focuses on those most in need.
5. Newstart is set at a level which allows recipients to survive
Supporters of the current level at which Newstart is set claim that it is an appropriate level to support recipients.
In May, 2018, former Liberal MP, Julia Banks, stated, I could live on 40 bucks a day knowing the government is supporting me with Newstart to look for employment. Ms Banks defended herself against accusations that she was out of touch with what was required for people to sustain themselves, claiming,I speak to constituents every day and all I can say is the dignity of having a job and finding work is what our policy is about.
A similar claim has been made by the Minister for Employment, Michaelia Cash, who, in justifying the amount of assistance offered the unemployed under Newstart, stated,Certainly as a backpacker ... I lived off a very, very minimal amount of money.
Though acknowledging that living on the Newstart allowance requires discipline, a number of readers of Bargain Oz have claimed that if recipients were careful, it is possible to get by on Newstart. One noted, Centrelink recipients get free dental at the Royal Dental Hospital (and community dental clinics) and doctors generally bulk bill them. You can live on it comfortably IF you CHOOSE to live within that means. Like give up parties, booze, smokes and buy food, give up your own internet ( phone or computer plans) and use libraries&If you have a car, use it only to attend jobs not hooning around with mates, frag racing or drifting in groups. All achievable. Depends on what you are prepared to do.
Another Bargain Oz respondent, who had lived on Newstart for over a year, claimed that, although challenging, it is possible to survive on the allowance. He wrote,It was definitely possible, I had a roof over my head, I had clothes, I had food and it allowed me to get&through 1.5 years of Newstart and get a job that I really enjoy. Another Newstart recipient similarly noted, I live on Newstart. Yes, there are some things I do not have. I don't own a car, relying on public transport instead. Do I want a car? No. I find public transport to be sufficient, time consuming but sufficient. I also use taxis when necessary which is very rare. A further respondent detailed some of the measures he employs in order to live on Newstart. He wrote, I am careful with my money on many things, so as I can afford some small luxuries which are important to me. I go through phases also, spend nothing for couple of days, to save. For example, there are people selling Dominos vouchers for $2, I can essentially spend $2 a day and thats most of my food for a day covered. Then half price crumpets and vegemite.
I always shop for whats half price at supermarket. I actually go straight to the catalogue at the front of Coles, and decide what I will buy mostly based on whats on a good sale&I shop for bargain meals, that still taste good (to me) . There is an RSL club that has a $5-$6 special every day. Another club does $5.50 lunch, includes all you can eat salad bar and some fruits.