Post by Banker on Oct 5, 2011 16:45:50 GMT 7
The tax forum in Canberra has heard the growing gap between unemployment and pension benefits highlights that it is almost impossible for people to live on the dole.
This morning's main session at the tax forum focused on the issue of welfare and equality.
The forum has wrapped up with the Federal Government promising to set up a business tax reform working group to take forward the discussions heard over the two days.
But earlier, tax expert Professor Peter Whiteford from the Social Policy Research Centre at the University of NSW says stories in the media of so-called dole bludgers do not reflect the hardship faced by most people on Newstart allowance.
He says in the first year of their unemployment, Australia has the lowest unemployment payments among the OECD.
"A single person, their total payment is about $35 a day, but if they have to rent privately - they get some additional rent assistance - but the cheapest one-bedroom house or apartment in Sydney is in outer Sydney in Wyong, and after you pay the rent you would be left with $16.50 a day for everything else - for clothing, food, to get yourself to jobs, all your transport," he said.
"So it's clearly a completely inadequate amount of money for people to live on."
Professor Whiteford says this problem is only going to get worse because Newstart payments are indexed to inflation while disability and aged pensions now rise at a faster rate.
"In 1997, when pensions became indexed to wages, a single person on Newstart was receiving a payment that was about just over 90 per cent of the payment to a pensioner," he said.
"Now because of this differential indexation, plus the very needed increases in the single rate of aged pension, the difference is about 35 per cent."
Professor Whiteford says the Intergenerational Report shows that if this trend continues, Newstart would only be about a third of the rate of the pension.
Unanimous agreement
Aside from the Federal Government - which would have to fund any increase in Newstart - there was no disagreement among both economists and social groups at the forum that the current level of unemployment benefits is unacceptable.
Economist Judith Sloan says the policy issue will have to be confronted at some point.
"It's really difficult because a) it costs money and b) you don't want to create disincentives for people to look for work," Professor Sloan said.
"But the thing is that once you start to look at the figures you'd think something has to be done."
Australian Council of Trade Unions secretary Jeff Lawrence says it is a rare area of unanimity.
"The first thing I should say is I didn't think I'd ever agree with Judith Sloan about anything," he told the tax forum.
"However, I think her comments about the question of Newstart and the question of its relevance for workforce participation I think were correct."
Another expert, Professor Deborah Cobb-Clark from the Melbourne Institute, says the extreme low-level of Newstart is driving many people who might be able to work onto the disability pension where they often remain until retirement.
"Once you get on disability it's very difficult to get off, and so the trick is to prevent people from moving onto disability payments in the first place," she said.
Aside from increasing the rate of Newstart, The Community Housing Federation's Adam Farrar says the rate of rent assistance urgently needs to rise.
"For a single person, you couldn't rent a house and still get any assistance if you're paying more than $186 a week in rent; if you were a couple with one or two children, $286 a week in rent," he said.
"And most of you - if you're out in the rental market - will know that that's not the real world that we're living in."
But despite the criticisms, experts at the tax forum have rated Australia's welfare system as the best-targeted in the developed world, with the money spent overwhelmingly going to those who genuinely need it.
www.abc.net.au/news/2011-10-05/people-struggling-on-newstart-tax-forum/3299966/?site=sydney
This morning's main session at the tax forum focused on the issue of welfare and equality.
The forum has wrapped up with the Federal Government promising to set up a business tax reform working group to take forward the discussions heard over the two days.
But earlier, tax expert Professor Peter Whiteford from the Social Policy Research Centre at the University of NSW says stories in the media of so-called dole bludgers do not reflect the hardship faced by most people on Newstart allowance.
He says in the first year of their unemployment, Australia has the lowest unemployment payments among the OECD.
"A single person, their total payment is about $35 a day, but if they have to rent privately - they get some additional rent assistance - but the cheapest one-bedroom house or apartment in Sydney is in outer Sydney in Wyong, and after you pay the rent you would be left with $16.50 a day for everything else - for clothing, food, to get yourself to jobs, all your transport," he said.
"So it's clearly a completely inadequate amount of money for people to live on."
Professor Whiteford says this problem is only going to get worse because Newstart payments are indexed to inflation while disability and aged pensions now rise at a faster rate.
"In 1997, when pensions became indexed to wages, a single person on Newstart was receiving a payment that was about just over 90 per cent of the payment to a pensioner," he said.
"Now because of this differential indexation, plus the very needed increases in the single rate of aged pension, the difference is about 35 per cent."
Professor Whiteford says the Intergenerational Report shows that if this trend continues, Newstart would only be about a third of the rate of the pension.
Unanimous agreement
Aside from the Federal Government - which would have to fund any increase in Newstart - there was no disagreement among both economists and social groups at the forum that the current level of unemployment benefits is unacceptable.
Economist Judith Sloan says the policy issue will have to be confronted at some point.
"It's really difficult because a) it costs money and b) you don't want to create disincentives for people to look for work," Professor Sloan said.
"But the thing is that once you start to look at the figures you'd think something has to be done."
Australian Council of Trade Unions secretary Jeff Lawrence says it is a rare area of unanimity.
"The first thing I should say is I didn't think I'd ever agree with Judith Sloan about anything," he told the tax forum.
"However, I think her comments about the question of Newstart and the question of its relevance for workforce participation I think were correct."
Another expert, Professor Deborah Cobb-Clark from the Melbourne Institute, says the extreme low-level of Newstart is driving many people who might be able to work onto the disability pension where they often remain until retirement.
"Once you get on disability it's very difficult to get off, and so the trick is to prevent people from moving onto disability payments in the first place," she said.
Aside from increasing the rate of Newstart, The Community Housing Federation's Adam Farrar says the rate of rent assistance urgently needs to rise.
"For a single person, you couldn't rent a house and still get any assistance if you're paying more than $186 a week in rent; if you were a couple with one or two children, $286 a week in rent," he said.
"And most of you - if you're out in the rental market - will know that that's not the real world that we're living in."
But despite the criticisms, experts at the tax forum have rated Australia's welfare system as the best-targeted in the developed world, with the money spent overwhelmingly going to those who genuinely need it.
www.abc.net.au/news/2011-10-05/people-struggling-on-newstart-tax-forum/3299966/?site=sydney
