Post by Banker on Apr 30, 2012 6:43:18 GMT 7
Last week I tried to live on the equivalent of Australia's unemployment benefit – the Newstart allowance.
I'm fortunate that this eye-opening experience was temporary, but I was still very uncomfortable walking around with only $11.25 in my wallet after buying food and taking out some money for bills.
The aim of my week was to raise awareness of the need to increase Newstart and other allowances, by highlighting the struggle that job seekers face when living on $244 a week.
Many economic experts and social welfare groups have argued that the payments are actually so low they hinder people in their efforts to find work and move forward with their lives. My week has further reinforced in my mind the validity of their arguments.
I knew that living on Newstart wouldn't be a picnic, but now the week is over, I can honestly say that I do not know how people cope.
After setting out my budget for rent and essential costs – power, gas, phone credit, transport and food - I was left with a little over $11 out of the week's payment.
Eating well on Newstart was impossible, even for a vegetarian. I ran out of vegetables on day five, and by the last day was down to eggs on toast for dinner.
After talking to many people and reading new rental calculations released by the Tenants Union of Victoria, it was obvious that I hadn't set aside enough for rent or power, but I was barely able to cover the cost of food and transport as it was.
I had no financial capacity for a range of co-contribution for medical treatments, long-term bills like car registration or insurance, any form of social or sporting activity, clothing, personal care products, household items, savings and emergency money and so on.
If anything unexpected or out of the blue happened, even something relatively minor such as broken glasses, I would need to either cut further into the food budget or resort to credit cards, payday lenders, and reliance on family and friends.
It was clear from my own experience that life on such a low income leaves you extremely vulnerable to even the smallest of shocks, but this was confirmed by talking to people on Newstart, community service providers and financial counsellors.
All spoke of the emotional and physical toll that week after week without work takes.
Over 500,000 people are in this position today – relying on an unemployment benefit of just $244 per week. That's more than $130 under the poverty line; it's merely 45 per cent of the minimum wage and 61 per cent of the aged and disability pensions, which are also acknowledged to be too low.
The unemployment benefit was designed to be lower than the minimum wage so it would be an incentive to move into paid work, and it was supposed to be for a 'short time' that people would be on it.
As a result, it was never indexed or raised in the same way as payments such as the aged or disability pensions. Without serious intervention, it will continue to fall further and further behind the pension.
I'd like to think that living on Newstart is only a brief experience for most, but the fact is over 60 per cent of the people on the payment have been there for a year, not out of choice, but because they are desperate for work yet don't fit neatly back into the workforce.
The design of the payment as a short-term solution is badly flawed given the alarmingly high rate of long-term unemployed people in the system.
Long-term Newstart recipients are more likely to be older workers; have a partial disability or mental illness; face communication or language barriers or lack marketable skills; and have low levels of formal education.
During my week, I met single mums, older workers who have been retrenched, young men and women, people living with a partial disability or with mental illness, and migrants struggling with language.
Not one of them said to me that Newstart is what they want for their lives, or for their family. Many recounted the difficulties they had faced in finding an employer who would take them on because of their unique circumstances.
A person's capacity to improve their own circumstances cannot be enhanced when they are financial insecure, socially isolated and in housing stress.
Until these barriers to work are dealt with through changes to areas such as education and skill training, more inclusive employment attitudes and better arrangements for transitioning from the Newstart allowance into work, people will find it hard to get and keep a job.
Over time the Newstart allowance has fallen further and further behind all other payments. An increase of $50 is essential just to ensure that jobseekers don't become so entrenched in poverty that they can no longer actively seek work. How can you look for work when you can't even afford a haircut, decent interview clothes or transport?
Despite the usual noises made by some on the right, there is no evidence that increasing the single rate of payment by $50 will act as an incentive to stay home and not work.
Instead, a number of economists, business leaders and academics - as well as the OECD and Henry Tax Review - have already joined ACOSS in calling on the Government to seriously re-think its approach in light of mounting evidence that the current rate is contributing to the barriers to workforce re-entry.
I actually think it is insulting to claim that a person would willingly forgo employment to live significantly below the poverty line. People don't willingly want to live in poverty, be forced out of accommodation, become homeless, lose hope or get caught in the debt cycle.
An increase to the single rate of Newstart and other allowances by $50 per week and the application of the same indexation as the aged and disability pension would immediately relieve some of the most severe financial hardship caused by this low rate of payment.
This needs to be matched with improvements to the wider system of employment service providers that increase their ability to work intensively with disadvantaged job seekers and provide better support services to all people looking for work.
As far back as 2009, Secretary to the Treasury Ken Henry told the ACOSS National Conference: 'The tax-transfer system is the principal means of expressing societal choices about equity. The tax-transfer system is a reflection of the kind of society we aspire to be'.
I certainly don't believe it is okay to condemn people to poverty, to encourage shame and social isolation, or to punish them while they search for a 'new start'.
Years of both old parties stirring up fear about welfare cheats and dismantling our social support system has left ordinary Australians with a safety net so low that it barely functions at all. Is this the kind of society we aspire to be?
www.abc.net.au/unleashed/3976916.html
I'm fortunate that this eye-opening experience was temporary, but I was still very uncomfortable walking around with only $11.25 in my wallet after buying food and taking out some money for bills.
The aim of my week was to raise awareness of the need to increase Newstart and other allowances, by highlighting the struggle that job seekers face when living on $244 a week.
Many economic experts and social welfare groups have argued that the payments are actually so low they hinder people in their efforts to find work and move forward with their lives. My week has further reinforced in my mind the validity of their arguments.
I knew that living on Newstart wouldn't be a picnic, but now the week is over, I can honestly say that I do not know how people cope.
After setting out my budget for rent and essential costs – power, gas, phone credit, transport and food - I was left with a little over $11 out of the week's payment.
Eating well on Newstart was impossible, even for a vegetarian. I ran out of vegetables on day five, and by the last day was down to eggs on toast for dinner.
After talking to many people and reading new rental calculations released by the Tenants Union of Victoria, it was obvious that I hadn't set aside enough for rent or power, but I was barely able to cover the cost of food and transport as it was.
I had no financial capacity for a range of co-contribution for medical treatments, long-term bills like car registration or insurance, any form of social or sporting activity, clothing, personal care products, household items, savings and emergency money and so on.
If anything unexpected or out of the blue happened, even something relatively minor such as broken glasses, I would need to either cut further into the food budget or resort to credit cards, payday lenders, and reliance on family and friends.
It was clear from my own experience that life on such a low income leaves you extremely vulnerable to even the smallest of shocks, but this was confirmed by talking to people on Newstart, community service providers and financial counsellors.
All spoke of the emotional and physical toll that week after week without work takes.
Over 500,000 people are in this position today – relying on an unemployment benefit of just $244 per week. That's more than $130 under the poverty line; it's merely 45 per cent of the minimum wage and 61 per cent of the aged and disability pensions, which are also acknowledged to be too low.
The unemployment benefit was designed to be lower than the minimum wage so it would be an incentive to move into paid work, and it was supposed to be for a 'short time' that people would be on it.
As a result, it was never indexed or raised in the same way as payments such as the aged or disability pensions. Without serious intervention, it will continue to fall further and further behind the pension.
I'd like to think that living on Newstart is only a brief experience for most, but the fact is over 60 per cent of the people on the payment have been there for a year, not out of choice, but because they are desperate for work yet don't fit neatly back into the workforce.
The design of the payment as a short-term solution is badly flawed given the alarmingly high rate of long-term unemployed people in the system.
Long-term Newstart recipients are more likely to be older workers; have a partial disability or mental illness; face communication or language barriers or lack marketable skills; and have low levels of formal education.
During my week, I met single mums, older workers who have been retrenched, young men and women, people living with a partial disability or with mental illness, and migrants struggling with language.
Not one of them said to me that Newstart is what they want for their lives, or for their family. Many recounted the difficulties they had faced in finding an employer who would take them on because of their unique circumstances.
A person's capacity to improve their own circumstances cannot be enhanced when they are financial insecure, socially isolated and in housing stress.
Until these barriers to work are dealt with through changes to areas such as education and skill training, more inclusive employment attitudes and better arrangements for transitioning from the Newstart allowance into work, people will find it hard to get and keep a job.
Over time the Newstart allowance has fallen further and further behind all other payments. An increase of $50 is essential just to ensure that jobseekers don't become so entrenched in poverty that they can no longer actively seek work. How can you look for work when you can't even afford a haircut, decent interview clothes or transport?
Despite the usual noises made by some on the right, there is no evidence that increasing the single rate of payment by $50 will act as an incentive to stay home and not work.
Instead, a number of economists, business leaders and academics - as well as the OECD and Henry Tax Review - have already joined ACOSS in calling on the Government to seriously re-think its approach in light of mounting evidence that the current rate is contributing to the barriers to workforce re-entry.
I actually think it is insulting to claim that a person would willingly forgo employment to live significantly below the poverty line. People don't willingly want to live in poverty, be forced out of accommodation, become homeless, lose hope or get caught in the debt cycle.
An increase to the single rate of Newstart and other allowances by $50 per week and the application of the same indexation as the aged and disability pension would immediately relieve some of the most severe financial hardship caused by this low rate of payment.
This needs to be matched with improvements to the wider system of employment service providers that increase their ability to work intensively with disadvantaged job seekers and provide better support services to all people looking for work.
As far back as 2009, Secretary to the Treasury Ken Henry told the ACOSS National Conference: 'The tax-transfer system is the principal means of expressing societal choices about equity. The tax-transfer system is a reflection of the kind of society we aspire to be'.
I certainly don't believe it is okay to condemn people to poverty, to encourage shame and social isolation, or to punish them while they search for a 'new start'.
Years of both old parties stirring up fear about welfare cheats and dismantling our social support system has left ordinary Australians with a safety net so low that it barely functions at all. Is this the kind of society we aspire to be?
www.abc.net.au/unleashed/3976916.html
