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Big economic benefits for raising Newstart says Deloitte

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Attendees at the Anti-Poverty Week Conference hold signs in support of raising Newstart (Image supplied)

Deloitte has put forward a report showing how increasing the Newstart allowance will lead to our economy and employment rate prospering, writes Kayla Dickeson.

THE CURRENT RATE for Newstart is at $273 per week, or $40 per day ($17 per day after housing costs are excluded).

This is $160 per week below the poverty line and the rate has not been raised in real terms since 1994.

Not surprisingly, then, Australia ranks second-worst in the developed world for poverty rates among the unemployed.

Newstart is now less than 18 per cent of the average wage and less than 41 per cent of the minimum wage.

The inadequate rate of Newstart has numerous effects on the physical and mental wellbeing of recipients, with some recipients reporting having to turn to dumpster diving just to afford food.  

Now Deloitte has released a report showing the economic benefits of raising Newstart would lead to an additional 10,000 jobs across Australia and lift the wages by $10.70 per day of more than 700,000 people.

The Deloitte modelling shows that lifting allowances would lead to increased consumer spending: an extra $37 million dollars per year in the Salisbury Council area, an extra $36 million in the Onkaparinga Council area, an extra $30 million in the Playford Council area and an extra $29 million in the Port Adelaide Enfield Council area.

State Co-Coordinator, Claudia Ienco, said:

“We've made clear for years that welfare recipients spend locally, and that a raise would likely help to boost the local economy. Now the research backs it up. If the Federal Government are serious about economic growth and job creation, they need to get serious about raising Newstart.”

The Anti-Poverty Network SA held its annual Anti-Poverty Week Conference on 18 October this year with the theme “Nothing About Us, Without Us”. It brought together about 50 participants to discuss their experiences with poverty in South Australia, including issues of welfare payments, housing and homelessness, disability, public transport and job networks. It also had a specific interfaith focus with a panel of interfaith leaders.

Newstart recipient Joel says that he cannot afford to consider the nutritional value of what he’s buying, only the cost.

I often have to skip breakfast and lunch every day in order to save money. I do not feel I eat enough fresh fruit and vegetables, I look for specials and Black and Gold products. Nutrition never enters into what I buy, how cheap it is is the only thing I’m capable of buying. If my income was higher, I would be able to buy fresh fruit, vegetables, things other than frozen products. I would buy more food in general if I could afford it.

Ruth says that food is becoming a luxury item now for her.

Many people are skipping meals for the sake of the children. Why is our Federal Government doing this? What have our children ever done in deserving this? I did not expect being a single mother. I have been served an eviction notice in early 2015. I managed a loan from a family member who I still owe. Red letters are received with my electricity provider. And also I’m always paying extra money of $25 per fortnight for water rates.

A growing chorus of local governments (13 in South Australia and 19 nationwide), business, welfare, health, union and other organisations have called for an increase to Newstart. In the preventive health space, the Australian Health Promotion Association SA Branch, Public Health Association SA Branch and South Australian Council of Social Services also support our call for reform.

More recently, the Local Government Association in South Australia declared their support for an increase to Newstart.

The Council of Small Business, Deloitte Access Economics, the Australian Industry Group and the Consumers Health Forum have also publicly indicated their support, along with the general public.

An Essential Media poll from June found that 2/3 of respondents agreed that Newstart needs to be raised.

The Federal Liberal Government opposes a raise to Newstart, while the ALP opposition has called for a root and branch review into the welfare system without committing to a raise.

Kayla Dickeson studies Journalism and International Relations at UniSA . You can follow her at @KaylaTenae18.

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