Raise the Rate – not a tough choice, but the right choice

By WENDY BACON

Anti-poverty protesters chose the Prime Minister’s own office in Marrickville for a rally on Friday (April 28) to demand the Albanese Labor government raise the rate of JobSeeker and Youth Allowance above the poverty line. 

With the Budget to be released on May 9, pressure is building on the Albanese government to stand by their previous support for raising the rate.

Organisers from the Australian Unemployed Workers’ Union (AUWU) and the Anti-Poverty Centre highlighted the hypocrisy of Labor ministers by holding signs quoting the politicians’ previous statements in support of raising the income support rate made before Labor won last year’s election.

AUWU Jeremy Poxon told the crowd that when he was in opposition, Albanese said the JobSeeker rate was “unliveable” and that “nobody can live on $40 a day”. Since Albanese made these comments the cost of living has increased and rents have spiralled. The current JobSeeker rate is $693.10 a fortnight for a single person with no children which works out to approximately to $49 a day.

“This government thinks it can say one thing in opposition, and then come out and starve millions of people on welfare,” Poxon said. “It’s a national disgrace.”

Another speaker quoted the Minister for Social Services Amanda Rishworth’s accusation that the Morrison government lacked empathy for allowing  Newstart (now called JobSeeker) to stagnate below the Poverty Line. (See below)

The only politician to attend the rally was the Deputy Leader of the Greens Senator for NSW Mehreen Faruqi. “They tell us that they have to make tough choices at this budget. But the fact is that it is people like you who have to make tough choices. People every single day have to choose between putting food on the table or  buying medicines, choose between turning the heater on in freezing cold or paying the rent,” she said. “It’s absolutely unconscionable that this Labor government thinks it’s a good idea to give $254 billions of tax cuts to the wealthy and commits to $386 billion for war machines while refusing to raise …income support. Poverty is not inevitable …poverty is a political choice that governments make.”

The rally topped off  a week of intense #RaisetheRate campaigning that included a huge media conference in Canberra on Wednesday at which a letter co-signed by 350 prominent people was released. It called for Albanese government to address deep seated structural inequality and raise the JobSeeker (now $49 a day) and Youth Allowance ($40 a day) to 90% of the Aged pension. It stated: “Even before the cost-of-living crisis, income support payments weren’t nearly enough to cover basic expenses, but now people struggling to get by on $50 a day face increased deprivation. In the last twelve months, rents in capital cities have risen by about 22 percent and food prices have skyrocketed. While everyone in our community is feeling the impact of these cost-of-living pressures, people on income support are going without food and other basics because they have nothing left to cut back on in their budget.”

The impressive coalition was put together by  Australian Council of Social Services. The open letter followed the release of the report of the Economic Inclusion Advisory Committee. The government established the Committee in exchange for ACT Independent Senator David Pocock’s vote for its Labor’s Industrial Relations legislation.

Campaigns to raise the rate of income support have become regular events but the unprecedented support for this initiative reflects a shift in national politics. Five Labor backbenchers, Tasmanian Liberal MP Bridget Arthur, the Greens, the Jackie Lambie network, Independent MPs including all teals, David Pocock, Andrew Wilkie, Helen Haines and Lidia Thorpe have all signed the letter. This reflects a shift in national politics with a weakened far right LNP coalition in disarray, a Labor government that is occupying the centre ground on asylum, foreign policy, defence and inequality and an unprecedented growth number of Greens and Independent MPs.

Others joining the call this week include ex-Labor MP Doug Cameron. Explaining why he signed the letter, he tweeted, “No good having nuclear submarines if you’re starving.”  The ex-Minister for Social Services and Chair of the Economic Inclusion Committee Jenny Macklin,  ex-Liberals Fred Chaney and John Hewson, prominent Voice supporters Professor Megan Davis and Thomas Mayer, ex-Secretary of Treasury Ken Henry, ex- Governor of the Reserve Bank Bernie Fraser, and the respected retired senior bureaucrat and feminist Marie Coleman also supported raising the rate. Read the full list here.

The findings and recommendations of the first report by Committee for Economic Inclusion are no surprise. This doesn’t make them any less serious or urgent. More than one million people in Australia who receive JobSeeker or Youth Allowance are paid incomes that are “seriously inadequate”, no matter what way you measure them. This has been the case for many years and has entrenched serious disadvantage in some communities. What does ‘seriously inadequate’ mean? It means an income where is nowhere near covering even the basics of living. 

What ever way you look at it, the evidence shows that the situation is deeply unfair. Even those on the minimum wage struggle to survive but Job Seeker is only 41% of the minimum wage. In 2000, there was a gap of about $35 a week between unemployment benefits and the Aged Pension. The difference was $160 a week at the end of 2021.

When compared to the average income of the poorest 20% of Australian households, Jobseeker has dropped sharply. In 2000, the difference was about $25. On the latest figures, it is $140.

So far the government’s response is not encouraging. Treasurer Jim Chalmers response that the government despite its commitment to act on disadvantage cannot fund “every good idea” is so low key that it seems to trivialise the issue.

Raising the rate must take priority over all else

Chalmers deflects from the urgency of raising the rate to the importance of getting people into jobs. But the Committee for Economic Inclusion report found that the inadequacy of income support payments is so punitive that raising the rate must take priority over all else. The stresses of living on current JobSeeker are often an obstacle rather than an incentive for getting a job.

About a million Australians are receiving income support. Many of them face discrimination when they try to get jobs. According to an ACOSS study in 2021, half of them have been unemployed for two years, 44% are over 45, 34% have a disability and they are more likely to be single parents or from First Nations or culturally diverse backgrounds.

In 2019, Labor released a video in Anti-Poverty in 2019. Independent MP for Warringah Zali Steggall retweeted the video this week:

“When people have to miss meals, they can’t participate fully in our society,” said the Minister for Energy Chris Bowen in 2019. “One in ten Australians live in poverty but actually it affects all of us,” said the Minister for Foreign Affairs Penny Wong.  The Minister for Employment and Industry Brendan O’Connor said, “It’s plain for everyone to see that Newstart must increase.” “It’s time for the Prime Minister to raise the level of Newstart,” was the final message from the Minister for Indigenous Australians Linda Burney.

So far the noises from the government are not encouraging.  There are rumours something smaller could be offered. The most likely shift is allowing single parents, who have children between 8 and 14,  to move back onto Single Parent’s pension rather than being forced to relying on Jobseeker. Most of this group are women. Forcing women onto JobKeeper rather that Single parents support is not only punitive but it can make it impossible for them to leave them dangerous situations. The previous Labor government allowed this situation. It should have reversed it as soon as it got elected last year. But this change would only account for about 50,000 of the one million people on income support. 95% would continue to live in grinding poverty.

Will Labor lift people out of poverty or will they refuse to do that?

Senator Faruqi summed it up this way: The Prime Minister has a choice. He can lift people out of the poverty or refuse to do that. If he refuses to do it, it’s not a tough choice, it’s a bad choice.

On Friday morning, Albanese was in Hobart announcing $250 million Federal contribution to an AFL  stadium on Macquarie Point. This plan is opposed by the Labor Tasmanian opposition, two Jacqui Lambie network Senators, the Greens and Independent MP Andrew Wilkie. They would rather the funds were spent on  tackling the escalating housing and heath crises. Surrounded by another group of protesters, Albanese scurried back to his car.

On Saturday, he was the special guest at the wedding of Australia’s richest shock jock Kyle Sandilands wedding. The celebration was held at  Swifts, Sydney’s most expensive wedding venue which was built as a mock Victorian castle and last sold for $60 million. Albanese may have enjoyed a slice of a cake worth $10,000 and admired flowers worth $150,000. As he reflects on the negative reaction to his decision to attend the wedding, perhaps this ostentation display of wealth has strengthened his resolve to “leave no one behind” by lifting the incomes of the nation’s poorest. Or does he feel reassured that his powerful friend Sandilands with his 800,000 listeners may give him cover to facedown the #RaisetheRate coalition?  We will find out on May 9.

Wendy Bacon was previously the Professor of Journalism at UTS. She signed the letter. ACOSS is inviting community members to add their signature to the letter here.