Living off $40 a day is the reality for more than 700,000 Australians who rely on Newstart payments to survive.
For 62-year-old Gae Guthrie, from Hastings Point on the New South Wales north coast, it means digging into life savings and compromising her health.
“You go without lots of things,” she said.
“Food is probably the biggest thing for me … I very rarely buy any meat.
“The doctor asked me once, because I’ve got brittle bones, he asked was I having meat, and I said I hardly ever eat any meat because it’s just not affordable.
“So that affects your health.”
Ms Guthrie said she received $754 a fortnight from the Government, which includes Newstart, Rent Assistance, pharmacy allowance and an energy supplement.
Deduct from that caravan site fees of $364 a fortnight, mandatory home and contents insurance, fuel to get her to and from her Newstart volunteer work, electricity, gas, water, medical bills and car maintenance (to name a few), and there’s very little left for food or anything else.
“I don’t know how people can live. If I balanced it all out, I’d be in the red.
“I’m just lucky I have a little bit of savings.”
Ms Guthrie said her story was one example of many, and that’s why she asked the ABC’s You Ask, We Answer project to investigate: “How are people like myself expected to survive on Newstart?”
|Status||Maximum fortnightly payment|
|Single, no children||$555.70|
|– Single, with a dependent child or children
– Single, aged 60 or over
– Single, after nine continuous months of payment
|Single principal carer granted an exemption for foster care, non-parent relative care under a court order, home schooling, distance education or large family.||$776.10|
Source: Department of Human Services
Could Newstart play a key role in the election?
Pas Forgione from the Australian Council of Social Service (ACOSS) said the rate of Newstart, in real terms, had not risen for 25 years.
“We’re hearing more and more from people who are looking for work that there’s simply not enough money to pay their rent, their bills, look after their health and search for work.”
He said there had been a recent change in public sentiment that could see the issue play a pivotal role at the federal election.
“The community understands that it’s not a liveable income, which is why we’ve seen a shift in public opinion.
“We know that according to a recent poll, 72 per cent of Australians support a raise to Newstart.”
Mr Forgione said there were around 7,905 Newstart and Youth Allowance recipients in Ms Guthrie’s north coast electorate of Richmond, and more than 10,000 further south in the marginal seat of Page.
“That’s a significant portion of the community, and it’s a large enough portion of the community to actually swing the outcome of the electoral contest.”
What if things stay the same?
Tony Davies is the head of social justice organisation Social Futures, which focuses on homelessness, housing, youth and family services and disability on the NSW north coast.
He said he had repeatedly seen the rate of Newstart hinder, rather than help, people re-enter the workforce.
“What happens is you’re forced into a cycle of debt, humiliation and isolation, and basically it undermines any attempt to get into work.
“People slip out of the system of work and they end up entrenched in a cycle of poverty.”
Mr Davies said to break the cycle of poverty, Newstart needed to increase by at least $75 per week and Rent Assistance by at least $20 per week.
“What that will do is actually make sure people who are trying to get work actually have enough to live on.
“Not only will you get the immense economic and social benefit of helping people into work … that money also flows into our economies.”
What are the parties promising?
Opposition Leader Bill Shorten has committed to a review of Newstart payments if Labor wins the election, admitting the current rate was too low.
But he refused to be drawn on how much the payment should be lifted by.
“I think common sense says that a review is going to conclude that amount is too low,” he told Q&A.
“I won’t pre-empt it, but I’m not having a review to cut it.”
Meanwhile, Prime Minister Scott Morrison is standing by the current amount.
“We have one of the best safety nets, if not the best, of anywhere in the world in our country,” he said.
Treasurer Josh Frydenberg has also dismissed calls for a major increase.
“Ninety-nine per cent of people on Newstart are actually on another type of benefit — it might be a parental allowance or another form of support.
“The other thing about Newstart is two-thirds of the people come off within 12 months and go into a job.”
The Liberal Party has outlined a welfare policy on its website that includes a random drug test trial for 5,000 new Newstart and Youth Allowance recipients and the introduction of stronger compliance measures.
The Greens, meanwhile, have said its policy would include:
- raising Newstart by $75 a week
- abolishing compulsory income management and youth programs like PaTH, Work for the Dole and the Community Development Program.
- setting up a commission that would provide independent advice to the Government on setting rates of income support and strategies to reduce inequality
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