Raising the rate of Newstart

by Chris Jones, CEO of Anglicare

Financial counsellors are experts at helping people to budget, develop a savings plan, and tackle debt.

But even their high-level skills can’t overcome the abject poverty being experienced by unemployed Tasmanians.

Newstart is supposed to be a safety net for people looking for work. Instead, it is a poverty trap that’s difficult to escape.

The situation is all too clear when financial counsellors sit down with Newstart recipients to go through the figures. Newstart is simply not enough to meet basic living expenses.

Most Newstart recipients are in housing stress and in the state’s tight rental market many are paying more than 50% of their income to keep a roof over their head.

Take a recent example of an unemployed man who sought financial counselling at Anglicare. After paying for rent and utilities, he has $42 a week for groceries. This is a man with no debts, who budgets well and lives frugally. Yet he is forced to regularly skip meals in order to pay his bills. He has no capacity to save any emergency funds. Any unexpected crisis will be disastrous.

Successive governments have failed to ensure Newstart has kept up with wage growth and cost of living increases. The base rate has not increased in 25 years, despite repeated calls from economists, business leaders, the community sector and the general public. Overwhelmingly, Australians believe people seeking work should have enough income to live a dignified life and participate in their community. Poverty is a major barrier to finding work – especially when Newstart can’t meet costs associated with job hunting such as transport and childcare. It’s no wonder people often become socially isolated and lose hope.

Existing poverty can be tackled by immediately raising the rate of Newstart. Anglicare has written to all Federal MPs seeking their support for this change, including Senator Jacqui Lambie who has shown a willingness to pressure government on cost of living issues. It’s also important to continue to invest in job creation. Finding and maintaining employment in Tasmania is not easy, especially for young people trying to enter the labour market. Anglicare’s recent Jobs Availability Snapshot shows jobs simply aren’t available or suitable for everyone that needs them.

People struggling to find work do not need the additional burden of soul-crushing poverty.

It’s time to listen to the financial counsellors and to the charities distributing emergency relief. It’s time to raise the rate of Newstart.

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