Cruel ScoMo rejects Newstart lift

When it comes to cruelty against the unemployed, it’s hard to top the Morrison Government. Listen to lousy ScoMo today on a Newstart rise:

“The government has no plans to do that,” he said. “We will continue to increase Newstart every six months as has always been the practice.

“More importantly, for those who are on Newstart, it is about well over 90 per cent, about 99 per cent, of people who are on Newstart are actually on other forms of payments as well.

“It’s about getting people into jobs. The latest jobs figures show 20,000 additional full-time jobs.

“That’s good news, that’s great news, more jobs. How good are jobs?”

The jobs market is turning down not up.

As the Budget heads back towards surplus, and with the Government pledging tens-of-billions of dollars for tax cuts, it refuses to lift Australia’s Newstart Allowance, which is about to fall to 30% below the poverty line:

When asked in September about raising the Newstart Allowance, Prime Minister Scott Morrison argued that the Budget simply couldn’t afford it:

“I don’t think you can all of a sudden go ‘oh, let’s make whoopee’,” he told ABC radio on Wednesday.

“It is a very expensive undertaking and there is not the room in the budget at this point to do that.”

Then in December, Morrison said that pensioners deserve a welfare increase ahead of the unemployed:

“We’re for jobs. Labor’s just for welfare. I heard the other day that they are thinking of increasing the Newstart payment. Well I’ve gotta tell you. If I thought I had the money to do that, I recon I’d do that for pensioners first”.

In April, social services minister, Paul Fletcher, again dismissed calls to raise Newstart, claiming the government’s current policy is “appropriate”:

Asked if he viewed an increase to the unemployment benefit as inevitable, Fletcher told the breakfast organised by the Australian Council of Social Service (Acoss) that the payment was already indexed to the consumer price index, adding: “That’s the policy framework we have and I think it’s the appropriate policy framework”…

According to Acoss, Australia’s unemployment benefit is the lowest among OECD countries…

Meanwhile, the Morrison Government stopped welfare payments to 55,000 homeless or at-risk jobseekers in the six months to December 2018:

About 55,000 jobseekers who were without a home or on the cusp of homelessness have had their welfare payments temporarily suspended under the government’s new compliance regime, despite the Coalition saying it would include “protections for the most vulnerable”.

Updated Senate estimates figures show 55,714 homeless or at-risk people who get payments such as Newstart received a suspension between July 2018, when the system came into effect, and December 2018…

The Department of Jobs and Small Business also revealed 50,843 job seekers who had a mental illness had their payment suspended, and 48,022 single-parent job seekers received a payment suspension.

Despite claiming there was inadequate Budget room for raising Newstart, the April Budget still managed to find space for additional personal tax cuts alongside spending $75 million to allow wealthy older-Australians to make voluntary superannuation contributions without having to pass the work test, thus opening further pathways for tax minimisation:

As we keep noting, the Newstart Allowance has not increased in real terms (i.e. above the Consumer Price Index) since 1994, whereas the Pension has received significant increases:

Virtually all cross-sections of society have demanded the federal government lift Newstart, including:

  • Deloitte Access Economics senior partner Chris Richardson;
  • the Business Council of Australia;
  • Former Treasury Secretary, Ken Henry;
  • Professor Peter Saunders from UNSW;
  • Former Liberal leader, John Hewson;
  • Former Prime Minister, John Howard
  • Former Deputy Prime Minister, Barnaby Joyce;
  • Liberal senator Arthur Sinodinos;
  • Business lobbyist, Heather Ridout;
  • independent senators Tim Storer and Derryn Hinch;
  • The Australian Council of Social Service (ACOSS);
  • The Salvation Army;
  • South Australian Council of Social Service (SACOSS); and
  • The Australian Green.

And last week, Reserve Bank governor Phil Lowe acknowledged that raising Newstart would be “good for the economy”:

Speaking at an event in Adelaide, Philip Lowe said “very low” household income growth was the reason the economy had “softened”, which has prompted the RBA to reduce interest rates to a record low of 1.25%.

Asked for his view on the role of income support levels, Lowe suggested an increase to the $277.85-a-week payment would help stimulate the economy, though it was “a matter for the government”.

“Anything at the moment that can boost income growth is good for the economy,” he said…

Acoss’s proposal to lift the payment by $75 a week would cost the federal budget $3.3bn a year, while boosting consumer spending, Deloitte said last year.

Melinda Cilento, the CEDA chief executive, said Lowe’s presentation suggested “now is as good a time as ever” for an increase to Newstart.

If boosting consumer spending is the goal, then spending $3.3 billion a year on raising Newstart by $75 a week would deliver far more ‘bang for the buck’ then gifting many billions of dollars to high income earners. The unemployed would spend nearly every dollar they receive, whereas a significant chunk of high income tax cuts would be saved.

Raising Newstart is a no-brainer for both equity and the economy.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

    • yeah yeah, protect the spivs and the infestors, but fvck the people who really need the help.

      • why the quotes? king james / rabbincal punishment is a christian go-to. no different from the pharisaic / roman days. paganism / blasphemy still illegal.

    • Torchwood1979

      Nah, that’s the states responsibility. The Federal Government is hard at work showing leadership on this issue by giving an interview and bringing all the naughty state ministers to the same table.

  1. The Prime Minister is quite right. The is no time to force workers to work ever longer periods of time to enrich people who don’t do any work.

    • St JacquesMEMBER

      The country has never been richer, the economy has never been more solid, we hand out blank cheques to buidling sector to fix their stuff ups, we have handed billions upon billions to yung uns to get into their own house, unemployment is low, and Jezuz the Crust is looking after us, but we can’t afford to pay the dole like we used to. Straya, you’re rooted !

      • Lord Walter Mountbatten - Adventurer

        Ignore this repellent fellow, he evidently did not receive bushels of wheat from his serfs this month and is feeling rather peevish!

    • All the money given to people on newstart would quickly flow back into the economy so it’s not all bad

      • Haha! Leftist nonsense. Trickle up economic myth. Just give me your whole salary. Don’t worry, it’s fine, I’ll spend it back into the economy while you jack in your job.

    • pingupenguinMEMBER

      Guys, guys…calm down. I have worked it out. Andrew is a novelty account like Reusa. No-one is really that much of a brain-dead nutjob.

    • You carry on about lowering wages, and screwing the unemployed yet you are too fvcking stingy to pay for a subscription. Fvck off.

      • I carry on about freedom and voluntary transactions, instead of threats, government force and insults from morons.

      • You seem to struggle with the concept of “voluntary”. I judge a subscription not to be worth the price. The free stuff is good value though.

    • Hold up! Scomos entire mandate is to help enrich people who don’t work on the back of the taxpayer. It just ain’t the poor who don’t work he’s on the side of.

      • Er, no. It’s letting people keep more of the money they earned through hard work. Plus negative gearing, which is idiotic.

  2. Criminal.
    How can anyone live on say $300 week?
    (Newstart at best is $672 a fortnight with all the allowances if you pay over $250 a week rent).
    For most it’s about $600 a fortnight or $300 a week.

    Rent in a bunk share slum house in Sydney or Melbourne costs at least $150-200 a week.
    Phone & transport $80
    Food say $100
    That’s $380 a week basic living costs.

    Meanwhile why are these Australians jobless?

    Our youth & now increasingly mature aged.

    Because Morrison allowed 2.561 million third world migrant guestworkers into Australia as TR / SCV
    We now have
    🔻1.5 million Australians unemployed
    🔻1.1 million seeking work
    🔻Real jobs in decline
    Roy Morgan April 2019.

    Plus:
    🔻116,000 Australians as permanent homeless in our streets or living in cars & park.
    🔻360,000 Australians seeking affordable housing.

    Meanwhile the migrant guestworker plague now infests huge swathes of our cities.

    1.3 million TR / SCV in Sydney
    1 in every 4 people.
    Third world migrant poor working & living illegally
    Destroying housing education standard of living
    Congestion, filth, squalor, crime, vice.

    Melbourne
    1.01 million third world migrant guestworkers
    1 in 5
    Same filth slums squalor job theft crime vice.

    -> And these 2.561 million TR / SCV are only here to steal Australian’s jobs. To live & work illegally.

    Lowering our gdp per Capita by 6.8%
    Lowering wages for everyone.
    Costing tens of billions earnings & taxable income.

    These foreign migrant guestworkers on Fake Id, ABN fraud, labour hire rings, paying little or no tax.

    As example – the vast majority of ‘foreign student or partners’ (712,000 primary and secondary visa total) that come in on a visa alibi are only here to work illegally.
    75% work illegally (UTS & Sydney Uni study)
    That alone is 534,000 illegally working foreign students alone. Each one destroying an Australian job for our youth and most vunerable.
    That’s $9.6 billion alone in Australian taxpayer cost in unemployment benefits. Just for those 530,000 Australian unemployed.
    Yet the foreign students only pay $8.3 billion in total fees. From money earned here illegally.
    They aren’t bringing money in – they send it out as agent procurer debt repayments and family remittances.
    The whole foreign student industry is ‘Not an export’
    Every foreign student coming thru arrivals or on the train or bus. A job stealer, costing Australians $19,000 a year each.

    The whole foreign student ‘industry’ is blatant dirty little migrant guestworker racket using a very long stay / semi permanent stay visa alibi that creates massive Australian unemployment and social harm.
    And the same for all the other visa categories in.
    Every visa category corrupted and now 2.561 million unskilled third world migrant guestworkers allowed in degrading our entire standard of living.
    -/-
    And despite all of this – on full display to the Australian public – we can’t even find the decency to raise the Newstart allowance to be a benefit the Australian unemployed victims could even live on.

    Criminal.

    • We should abolish new start and just give a few food stamps. You’ll be amazed at how quickly these people start mowing lawns, cleaning houses and flipping burgers.

      • No mate – we have 10%+ real structural solid unemployment.
        Worse than Obama recessions.

        In the regions and rural areas its even higher.
        Our Australian youth unemployment is up to 17%.
        -> Recession level unemployment.

        The flood of 2.561 million unskilled TR / TCV migrants have completely hollowed out the low skill part time & cash in hand jobs. Already damaged by the 1.9 million third world unskilled PR we also let in..

        Why hire an Australian at $22 a hour when you can get a Bangla or Nepalese or Chinese TR at $3 hour.

        And it’s the same in housing.

        Andrew – why do you think we have 116,000 permanent Australian homeless and another 360,000 seeking affordable housing? – getting close to half a million.

        All those Australians on the street begging & living rough?
        Because they were evicted out by the new foreign owner & their dirty laundered money to buy the little doss houses or units they lived in – and they were replaced by this migrant influx in 6, 8, 10 or more in bunk share cash in hand subletting.

        Go out to western Sydney sometime, open your eyes see the vast filthy third world slums of transient non permanent resident migrant guestworkers and how they live.

        -> 1.3 million TR / SCV in Sydney alone.
        Lowlife unskilled migrants in visa breach. A generalisation sure – but overall that’s correct.

        1 in 4 people in Sydney is a now a non permanent transient migrant guestworker on some pretext visa alibi.
        Living & working illegally
        Stealing over 1 million Aussie jobs in just Sydney.
        Occupying some 250,000 ex Australian dwellings, now foreign owned & run as filthy migrant cash in hand slumshare hovels.

        That’s why the Australians are out on street.
        That’s why they are on the dole.

        The migrant TR/SCV influx stole their job, their opportunity to any education as that got prostituted as a visa alibi, and they stole their housing.

        Melbourne – 1 in 5 (1.05 million of them).
        Same.

        Only here to steal.
        No lawn mowing or burger flipping jobs for them.

        The migrant mafia and the employers won’t hire an Aussie at award rates when they can get third world unskilled desperate migrant guestworkers at a quarter of the rate.
        You are way out of touch with the reality.

        -> We can’t even look after our poor & jobless.
        We can’t even give them enough Newstart money to have shelter and food.

        And still the migrant guestworkers on the pretext visas continue to flood in…
        It’s criminal.

  3. “It’s about getting people into jobs.”
    very contradictory to the plan of importing a never ending supply of labour.

  4. Whilst I think an increase is due the idea that Newstart should be enough to ‘live on’ is flawed. Where’s the incentive to get a job then?
    Newstart should be below the poverty line – a question of just how much.

    • Nah, it’s still pittance, and most people want to work..The idea that most people bludge on welfare is crap; it’s a few, but certainly not the many, and promotes toxic stoic attitudes like those we are seeing.

      There is far more welfare rorting done by the wealthy, who generally use extra wealth to seek Economic Rent (which is poisonous for productivity).

    • Would you settle with just Newstart if all it provided was enough to cover the basics? I wouldn’t. Most people I know wouldn’t. And I’m willing to bet the majority of people want more than a roof above their heads and food on the table. Newstart is not sufficient for that at the moment. It is a pittance that keeps people in poverty. Preventing poverty is not just good for the person it is good for the whole of the community. It leads to better health and education outcomes and it reduces crimes. A small investment in helping people is a lot better than spending massive amounts picking up the pieces. This is before we start looking at the counter productive conditions around being in Newstart and the massive rort that is the job network.

      • Yep, terrorising welfare recipients with toxically stoic straw-men arguments is false economy (and often a veil for stinginess, nastiness and ignorant self-congratulation).

      • If Newstart was enough to “live off” I might consider it for a few months. Especially if I just had a kid and wanted to spend time with it and not have the stress of work on top. Since leaving Uni in my early 20s I haven’t been unemployed except for a 2 week window when I moved from Australia to Europe and found work almost immediately.

        So I feel like some time off after working 10+ years in the same job would be nice. But ultimately I want more than what minimal livable wage can offer and that includes surplus cash to pump my ride and buy the kind of home I want to live in.

        I think most people aspire for more than sitting on welfare..

    • HadronCollision

      I recommend you avail yourself of Newstart for perhaps 6 months then report back to us.

      Ensure you run down *any* cash savings first without hiding them with relatives / friends.

      I’m looking forward to seeing how that living of yours went.

      I’ll write it down right here right now: it’ll be horrid.

    • drsmithyMEMBER

      Where’s the incentive to get a job then?

      Why do _you_ have a job that earns more than minimum wage ?
      Because poverty sucks.

      • Then both – with trickle up better than trickle down.

        It’s just lesser of economic evils (ie. more economically effective) for poorer people to get money for things they need than for wealthy people to get more of what they don’t.

        Wealthier people tend to seek Rent and buy luxury goods – they don’t need the money as much, and they won’t use it as effectively on the whole; they tend to pump asset prices, clip tickets, lobby government for their interests, and the like, more than they invest productively in utilitarian improvements – even the businesses they start up or “invest” in tend to do this.

        Not all economic activity is equal, and trickle up is more economically (and morally) effective than trickle down.

  5. If the RBA governor is saying its too low … well champ its too low. If the Budgetary position improves in the next year it needs to fund Newstart. And really its something that LNP can pass through Parliament easily. Something he can say when he is done
    .. I did that. You talk equality, I funded the biggest increase in social welfare in a generation. NDIS is important to him but it is years of work to fix, this one is more straightforward.

  6. SchillersMEMBER

    There are approximately 1.6 million Australians currently receiving either the Newstart allowance or the DSP ”benefit”. Most of them are enrolled to vote at Federal and State elections. That’s a lot of votes.

    Wonder how many voted for the LNP on May 16?

    • Good point. If you can’t contribute anything to the productive pie you shouldn’t be allowed to vote on how it’s spent.

  7. Well if all these new Australians were spending and paying tax like they were expected to, then the government probably would have green lighted a rise in Newstart payments.

    • I dunno if it’s just LNP, I think most pollies are pretty shielded from the way reality runs.

  8. HadronCollision

    Whilst I shall not be churlish apropos my FY1819 1080 or whatever it is, and whilst I will donate some of it, and whilst I shall not be sad to see a flattening of my rate from 39% to 30%, I’d more strongly favour redirecting part that to Newstart.

    I wonder, though, what tax rate Andrew would be happy with, and what services etc he is willing to disavow under those parameters. Evidently, too, the current gerrymandering and privatising of public profits would appear to be most acceptable?