As the treasurer readies next month's federal budget, a group tasked by the federal government to examine income support payments says the rate of JobSeeker and Youth Allowance are "seriously inadequate".
Treasurer Jim Chalmers and Social Services Minister Amanda Rishworth asked a committee comprised of social security and economics experts, unions, business groups and others to investigate the adequacy of income support and rent assistance as well as barriers preventing Australians from participating in the economy.
The Economic Inclusion Advisory Committee recommended that, as a first priority, the government commit to a substantial increase in the base rates of the JobSeeker payment and related working-age payments, as well as the rate of Commonwealth rent assistance.
"All indicators available to the Committee show that current rates of these payments are seriously inadequate, whether measured relative to the National Minimum Wage, in comparison with pensions, or against a range of income poverty measures," the group said.
"People on these payments face the highest levels of financial stress in Australia. Committee members heard from people who live on income support having to choose between paying for their medicine or electricity bills."
The group noted that, while there may be concerns about the effect of increased payments on incentives to work, "current unemployment payments have fallen to such an inadequate level that they create a barrier to paid work".
In real terms, the committee found, the payment had shrunk over the past two decades, going from being broadly in line with the average income of the poorest fifth of Australians in 2000 to falling $140 a week beneath even the poorest fifth of Australians today.
It said the payment should be increased to 90 per cent of the age pension — which is currently at $971.50 for a single pensioner — or $874.35. That would return JobSeeker to the same relative rate it was at in 1999.
The fortnightly JobSeeker payment for a single person with no children is currently $693.10.
In a statement, Mr Chalmers and Ms Rishworth did not commit to an increase in JobSeeker in the coming budget.
"The Albanese government will always look to provide support where we can to those most in need, where it is responsible and affordable to do so, and weighed up against other priorities and fiscal challenges," Mr Chalmers and Ms Rishworth said.
"While we can't fund every good idea, there will be measures in the May budget to address disadvantage. This will include energy bill price relief that prioritises those on payments and pensions."
The ministers said some of the committee's recommendations would be considered as part of other government processes already underway, but the committee's recommendations would cost more than $34 billion over the next four years to implement in full.
The government agreed to the inquiry as part of a deal brokered with independent senator David Pocock, in order to win his support for the government's industrial relations reforms.
Senator Pocock said the findings of the committee "could not be clearer".
"It is unacceptable that — as one of the wealthiest countries in the world — so many people in our community, especially children, are being forced to live in poverty in this worsening cost-of-living crisis," Senator Pocock said.
"It appears that this Labor government can find extra money for just about anything — from inland rail cost blowouts to submarines — but it won’t do more to protect the most vulnerable."
Group calls for abolition of subsidy 'activity test'
The committee also flagged the "activity test" for child care subsidies was actually acting as a barrier for economic inclusion, especially for women, and causing additional hardship.
It said that scheme — as well as the ParentsNext scheme — should be abolished, as well as removing certain income tests from Family Tax Benefit calculations.
Finance Minister and Minister for Women Katy Gallagher had already flagged that the federal government was aware of concerns around the child care subsidy test, and was awaiting the outcome of this review.
Among its 37 recommendations were also calls for:
- A National Energy Transition Authority to help protect workers in heavy emitting industries
- A dedicated fund to support Aboriginal Community Controlled Organisations
- The establishment of a "poverty index" to provide a better picture of the nature of poverty in Australia.
