Last Wednesday (2 May), Liberal MP Julia Banks – one of the nodding heads behind Malcolm Turnbull when Question Time is televised – claimed she could live on the Newstart allowance of $40 a day while looking for a job.
This $40 is the pittance a single unemployed person gets for the system's failure to create enough jobs.
Banks’ claim is, of course, nonsense. Jennifer Westacott, CEO of the Business Council of Australia, admits she could not live on it. Deloitte Access Economics Partner Chris Richardson – hardly a radical economist – called for the "unnecessarily cruel" payment level to be increased by $50 a week, saying doing so was more important than budget repair.
Opposition Leader Bill Shorten sparked off the debate last week when he announced that, if elected, Labor would have a root and branch review of Australia’s welfare system. He admitted he could not live on $40 a day.
However, let me issue a word of warning. Root and branch reviews of public spending are not about making the social payments better. Even if they recommend increases for some payments they will offset that by tighter entitlement requirements and cuts to other payments.
Let’s not forget that it was not so long ago – 2013 to be exact – when Labor was in power that then Minister for Social Security Jenny Macklin said she could live on the Newstart allowance, which was $35 a day at the time. Her comment was made in response to Labor moving 80,000 single parents (mainly women) off the parenting payment to the lower Newstart allowance, leaving some up to $110 a week worse off. So beware Labor bearing review gifts.
Julia Banks responded to Shorten and Richardson, not just with her $40 a day comment, but called increasing the payment, "socialism". I wonder what she thinks of the biblical injunction to love your neighbour as yourself? More socialism?
Banks is, like most of her Coalition colleagues, out of touch with the lives of everyday voters. As a backbencher, she earns more than $540 a day before allowances.
Speaking of allowances, according to Max Koslowski in Junkee:
‘Between September and December last year, she charged the taxpayer $3,990 on parliamentary travel, $5,293 of airfares, $1,827 on the private car supplied to her by the government, and $401 on family travel costs.‘
Her travel allowances in four months are roughly equivalent to a full year of Newstart Allowance. On top of that, her $280-a-day Canberra sitting allowance is the same as the single person Newstart weekly allowance.
It gets "better". Banks owns at least five houses — including three investment properties. So we taxpayers also support her through the tax system – assuming she is negatively geared, which I am sure she is – and, when or if she does sell the properties, through capital gains tax concessions.
According to the Parliament House website, her work background prior to her election in 2016 was:
- Lawyer, Private Practice;
- Corporate Counsel, Hoechst Australia;
- General Counsel (Australia/NZ), Senior Counsel (Asia Pacific), Director Corporate Affairs (Australia/NZ, Asia Pacific), Kraft Foods;
- General Counsel and Company Secretary; Head of Compliance and Risk Management, GlaxoSmithKline Australasia; and
- Chief General Counsel and Company Secretary, George Weston Foods.
Banks won the seat of Chisholm after the retirement of Labor's former Speaker Anna Burke at the 2016 election. It was the only seat the Coalition won from Labor. Everywhere else, the swing was strongly against the Coalition Government. Her victory effectively gave Turnbull a one-seat majority.
Her life reflects ruling class privilege and its biases. This includes the "bludger" stereotype cultivated about the unemployed — a stereotype which has some resonance among sections of the working class. That might explain, too, why Banks has been censoring her Facebook and other pages, and removing any comments disagreeing with her 19th Century approach.
Yet poverty level payments for the unemployed is Government policy. In other words, the "I could live on $40 a day" mantra is not just an expression of ruling class bias. It is government policy to starve people to accept low paid jobs. Poverty level unemployment benefits put downward pressure on wages.
How does Newstart compare to other payments?
As Frank Chung notes in the Sunshine Coast Daily:
‘The [Single Newstart payment] works out to $38.99 … a day, compared with the $64.83 a day - or $907.60 a fortnight - for the maximum Age Pension or Disability Support Pension payment. The average full-time salary is $81,531, which works out to $223.37 a day.’
These are the maximum Age and Disability Support Pension payments. About one-third of Australians older than 65 live below the poverty line.
As ACOSS says, the poverty line is
‘... 50% of median household income. This is the poverty line used by the OECD, and in 2014 (the latest year for which figures are available) equated to a disposable income of less than $400 a week for a single adult.’
We can update that 2014 figure to about $430 today. So instead of increasing Newstart by $50 a week or $7 a day, as Chris Richardson suggests, we need to increase it by about $150 a week, or by more than $20 a day, to lift single unemployed people out of poverty.
It won’t happen — and not just because of the bias of people like Julia Banks. Capitalism is built on requiring us to sell our labour power for a wage and by doing that make profits for the boss. The Newstart Allowance is set and will continue to be set at a poverty level that does not undermine this grundnorm of capitalism — the need to sell our ability to work in order to live adequately.
As well as lifting the Newstart and other social payments to above the poverty line, there is something else a government could do and that is create socially useful jobs. There are about seven unemployed people for each job vacancy. According to the Australian Unemployed Workers Union, if we include the underemployed and hidden unemployed, the figure is more like 17 to one.
Socially useful jobs? We are facing a climate crisis now the consequences of which will hit us very soon. Converting Australia to a fully renewable energy society would cost about $300 billion over ten years but would help set the agenda globally to save the planet and create hundreds of thousands of jobs.
However, that would require a government of vision, not beholden to vested energy interests.
There is another option, too, for those spouting the $40 a day mantra — and I don’t mean seeing if Julia Banks could indeed survive for a week on $40 a day. We could put politicians on the average wage of $81,000 so they too know the real pressures ordinary workers are under. I note without comment that the median wage is $54,000.
Imagine a society in which we create hundreds of thousands of socially useful clean energy jobs; in which the unemployed, the disabled, the sick, the aged, and so on, live adequately and in which parliamentarians are paid much the same as the working class. Unfortunately 'Imagine' remains a John Lennon song.
Read more by John Passant on his website En Passant or follow him on Twitter @JohnPassant. Signed copies of John's first book of poetry, Songs for the Band Unformed (Ginninderra Press 2016), are available for purchase from the IA store HERE.
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