Dissenting report from Coalition Senators
1.1Poverty is a multi-faceted social and economic story, with evidence presented that over three million Australians are impacted by poverty today.
1.2Coalition Senators agree that all aspects of Australian society must come together to address poverty. However, we disagree with the Committee’s majority opinion that it’s simply through government payments, not facilitating employment and incentivising aspiration, that we tackle this problem.
1.3Whether on income support payments, the increasing working poor, where experience has been one of intergenerational poverty, or where the experience of poverty is new; when an Australian dollar buys significantly less all Australians are worse off – some more than others.
1.4The committee report focuses mostly on raising the rate of social security payments and benefits to solve poverty. It concentrates on those receiving welfare payments – largely ignoring the new working poor.
1.5There are different types of income support payments. Working age income support payments and JobSeeker are a safety net, not a wage replacement, and more can be done to position people to move off welfare into work where it is possible to do so.
1.6While there is diversity in the stories of poverty from contributors to this inquiry, the Coalition recognises there is also no single action by government, by the service delivery sector, by communities or by individuals likely to reduce poverty.
1.7The Coalition believes the best form of welfare is a job, and JobSeeker was designed to give people the short-term support they need while they find work.
1.8Recommendations 1, 2, 3 and 7 refer to increasing the payment rate for those on JobSeeker and similar payments, pensions, and those who rely on Commonwealth Rent Assistance (CRA). The Coalition agreed to some, though not all, of these propositions in the Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023 in August 2023. The Coalition does not support recommendations 1, 2, 3 and 7.
1.9The vast majority of contributors to this inquiry were:
Not-for-profit social service advocacy groups.
Service delivery organisations.
People who have lived with poverty.
1.10Their primary solution to reduce poverty was advocacy to raise the rate for all income support payments.
1.11In recognising that the increasing working poor amounts more than those on income support payments, the submission by financial counselling peak bodies (Submission 31) recognises that:
financial counselling services are being accessed by those who are considered “middle income Australia”. Due to ongoing structural issues, such as geography, stagnant or low wage growth, cost of living increases, insecure work and the erosion in the financial value of income support mechanisms, the face of poverty is changing. Unfortunately, as we know, inequality is increasing.[1]
1.12The committee heard that social services payments are currently indexed to ensure payments maintain their purchasing power when the cost of living rises.Adult allowance rates, including JobSeeker and Rent Assistance, are indexed to the Australian Consumer Price Index (CPI) twice a year – in March and September. Youth Allowance is indexed annually.[2]
1.13Additionally, the Coalition supported the Albanese Government’s 2023–2024 Budget measure – ‘Increased support for Commonwealth Rest Assistance Recipients’[3] – which increased the maximum rates for CRA allowances by 15 per cent to ‘help address rental affordability challenges for CRA recipients at the cost of $2.7 billion over 5 years’.
1.14The 2023–2024 Albanese Government Budget also included a measure to Increase Working Age Payments increasing the base rate of several income support payments by $40 per fortnight. There was also a change to Parent Payment Single, where eligibility was expanded to increase the age of accessibility from 8 – 14 years.
1.15As of March 2023 there are over 800 000 Job Seeker recipients. Instead of raising the rate for those receiving JobSeeker and working age payments, the Albanese Government could have incentivised recipients to participate in the workforce – thereby supplementing welfare payments with money earned through employment.
1.16A submission by the Department of Social Services (DSS) (Submission 12) highlights the importance of participation in the labour market:
economic participation is the best way to alleviate poverty and disadvantage. This is widely supported in the academic literature. Economic growth leads to the expansion of opportunity and reduces occurrences of poverty.[4]
1.17The Coalition believes those who can work should do so.A vast majority – around 75 per cent of those on JobSeeker – show zero reported earnings with no part-time work.[5] This is unacceptable when unemployment is at record low levels, and employers are bringing in workers from overseas to fill vacancies.
1.18It is a win-win-win for job seekers, employers and taxpayers if the income free area for those on JobSeeker and related working age payments is increased, allowing those receiving income support payments to gain valuable work experience and supplement their income without impacting their payments.
1.19When in government the Coalition, through disciplined economic management, delivered the largest permanent increase to the JobSeeker income support payment. When in government, the Coalition presided over a period of what was then record low unemployment and a decline in numbers of those dependent on social security before a change of government in 2022. With the exception of an increase during the COVID-19 pandemic, the proportion of residential working age Australians receiving income support payments declined[6] from 24.4 per cent in 1996 to 14 per cent in 2022. However, there was a sustained increase in the number and proportion of long-term recipients of Job Seeker payment between 2006 and 2022.
1.20Coalition policy is to raise the threshold by $150 per fortnight before payments are reduced, allowing job seekers to take home $300 a fortnight while still retaining the full rate of JobSeeker.[7]
1.21In September 2022, around five million Australians were receiving income support payments of some type, with more than 50 per cent of those receiving the Aged Pension.[8] Similarly, veterans and pensioners should be able to work and supplement their incomes, if they wish to. If this were allowed, there would be many economic and social benefits for older Australians and veterans.
1.22Getting young people into work or actively pursuing work, rather than a focus on only receiving welfare payments and assisting older Australians to return to work if they wish to, should be a priority, along with evaluating and improving welfare programs and responding to the needs of those who find looking for work more challenging.
1.23With Australia experiencing sustained long-term low unemployment, it is important that the government unlocks this aspect of the workforce to assist with shortages across the labour market and to help those on welfare transition back into full-time work.
1.24The Coalition disagrees with ending mutual obligations for job seekers and those on related working age payments because this requirement keeps people engaged in job search to help them move off welfare.
1.25Mutual obligations is an inherent part of the welfare social contract, where beneficiaries agree to seek work in exchange for payment actively and where penalties apply if the contract is broken. It includes but is not limited to completing job searches, attending compulsory appointments, participating in training, attending job interviews and accepting job offers. This creates a pathway towards employment and away from poverty.
1.26One example was the ParentsNext Program, which the Coalition introduced to help young parents, particularly mothers, remain connected to the workforce.
1.27The Albanese Government is simply capitulating to the Australian Greens’ assessment on employment services. There are sound, practical reasons to reject recommendations 5 and 6.
1.28Participation in education is key contributor to alleviating poverty. Education and training – with associated qualifications – can increase opportunity for employment and increase opportunity for promotion, further reducing the risk of poverty.
1.29To encourage Australians into training and to encourage greater participation in the public training provider – Tafe, the Albanese Labor Government has been making changes to the delivery of training including fee-free TAFE and greater access to university places for under-represented, disadvantaged cohorts. The success of this in terms of enrolment levels versus completion rates and therefore transition to employment is yet to be seen.
1.30Brotherhood of St Lawrence (BSL) referred to reforms that would better support people to transition to the labour market. BSL advocated for a collaborative, people-centred, place-based and industry focussed approach to employment and training services policy and program design. Jesuit Social Services raised wage subsidies for employers and training that were directly relevant to career aspirations and employment opportunities as another solution.[9]
1.31This report raises the complexity of poverty in the context of social factors: where you live, your age – both the young and the old, people living with disability, those disadvantaged by education or by illness or who are known to experience increased levels of discrimination, those who experience relationship breakdown in later life and those experiencing domestic and/or family violence.
1.32On 13 February, the Prime Minister delivered the Closing the Gap address announcing a new Remote Jobs and Economic Development Program (RJED) designed to create 3000 remote jobs over three years. The Coalition supports training and education programs that lead to employment outcomes, add value to employability and support the lives of Aboriginal and Torres Strait Islanders.Still the specifics of this new program for indigenous job seekers is yet to be seen – how will these jobs be created, in which sectors, with which employers and what infrastructure will be created to support this?There is little detail about this program at the conclusion of this review so it is unclear what modelling underpins Labor’s program.
1.33It is well-known that the longer individuals remain on income support the harder it is to enter or to re-enter the workforce.[10] There are times when, and many reasons for, those who can work wish to supplement their income – and the system should facilitate that. Encouraging and supporting active participation makes sense – especially when mutual obligation requirements focus on building skills and capacity to transition to work. The Coalition supports the opportunity for participation.
1.34Commonwealth, State, Territory and local governments, the financial industry, community organisations and the private sector must continue to collaborate with Aboriginal and Torres Strait Islander communities, organisations and peak bodies to develop First Nations-led solutions to poverty that are also place-based. It is also important for governments, policy makers and service providers alike, to understand which groups within the Aboriginal and Torres Strait Islander community are at increased risk of living below the poverty line to ensure the provision of appropriate tailored and targeted supports. Investment in frontline organisations – particularly Aboriginal and Torres Strait Islander organisations that support individuals and families experiencing poverty – is critical to addressing poverty now and in the immediate future. Continued investment in enabling agencies like Indigenous Business Australia (IBA) and removing legislative constraints that hinder our ability to increase First Nations’ access to capital are necessary to expand our reach and ability to better support the economic independence of Aboriginal and Torres Strait Islander people through equitable economic access.
1.35When the Labor Party, enthusiastically supported by The Greens, abolished the CDC (Cashless Debit Card), it meant more income support payments could be spent on gambling, alcohol and previously restricted items and for those families, where addiction was already an issue, it made what was a bad situation – much worse. Despite many warnings from community groups the Government persisted with what was clearly a bad policy decision. There were early reports of increases in anti-social behaviour and social harm following this decision – and these reports continue today.[11]
1.36The Albanese Government has yet to provide data that demonstrates the lives of people who live in the six trial sites (Ceduna, East Kimberley, The Goldfields, Bundaberg and Hervey Bay, Cape York and the Northern Territory) have improved since the CDC was removed in 2023. Preliminary findings from commissioned research is expected in early 2024.
1.37The Coalition is committed to reinstatement of the Cashless Debit Card in communities that want and need it. This will mean welfare payments can be spent in a responsible and meaningful way on food for kids and essentials, not on alcohol, gambling and drugs.
1.38In a submission by the Australian Institute of Family Studies (Submission 14) the Institute ‘draws attention to locational disadvantage, associating communities with a greater concentration of individuals and families experiencing poverty with a range of other issues such as mental health challenges, substance misuse and gambling harms’ when reflecting on the nature of poverty.[12] The CDC program worked to address these factors in communities where such challenges had reached dire proportions.
1.39There are an estimated 770 000 to 1.2 million children in this country who live in poverty.[13]The inquiry heard that children who grow up in poverty will more than likely remain in poverty into adulthood. Children who grow up in poverty do less well at school and, therefore, less well in their work life.[14]
1.40Parents and working age family members are role models and anything that can be done to incentivise them to work – where they can do so – rather than remain on benefits should be encouraged.
1.41The Australian Institute of Family Studies (Submission 14) discussed:
close links between parental joblessness and financial disadvantage …jobless families and, to a lesser extent, families with short part-time hours were linked with factors such as lower educational attainment, poorer health and living in disadvantaged areas. Research further revealed that shifting from joblessness or short part-time to full-time/long part-time hours was important to alleviate financial disadvantage.[15]
1.42Education is crucial for children entering adulthood to transition to employment. In the NT, in 2021–2022, the average school attendance in remote schools was less than 50 per cent. A greater focus on the role of education and school attendance in potentially alleviating poverty will be critical for improving prospects.
1.43The Labor Party, the Australian Greens and some independents voted to remove the compulsory Cashless Debit Card which restricted spending on alcohol, drugs and gambling. In communities where the CDC has been replaced with an alternative program, the levels of social unrest, and associated issues, is reported as worsening. When parents on income support, who experience addiction, are restricted in how they spend their money, children and the most vulnerable benefit. And, when those receiving welfare payments and who are already vulnerable experience less harassment and menacing behaviour as a result of their inability to access cash, they are better protected. Anecdotal evidence from those with lived experience indicates changes to CDC’s arrangements by the Labor Party and the Australian Greens has failed their communities.
1.44The committee heard wide-ranging reasons that had contributed to experiences of poverty. These included not having enough money, welfare recipients not receiving the payments they are eligible for, and those who gave up navigating and complying with the social services system, which unfairly puts pressure on others to support them. For others there are issues around financial management and not leaving enough for essentials.Financial Counselling Australia makes recommendation for an increase funding for financial counselling.[16]
1.45The Coalition notes the evidence that the Albanese Government’s Measuring What Matters wellbeing framework needs to provide a poverty indicator. It is a matter for the Government to consider embedding poverty measures and targets within its own Framework. A National Anti-Poverty Strategy or a National Poverty Commission is also a matter for Government. Another Commission and Commissioner risks adding yet another layer of oversight and associated bureaucracy without a guarantee of providing an ultimate solution to poverty.
1.46The link between housing and poverty was raised throughout the inquiry. Australia's housing market is roughly divided into thirds: one-third of households rent; one-third own their home outright; and one-third are mortgage payers. Around 4 per cent of households live in social housing.[17] The report has focussed mostly on alleviating poverty though the lens of those working at the welfare end of the spectrum, while there any many who are working and finding it hard – even impossible – to make ends meet.
1.47Particularly vulnerable cohorts were identified as people with disability, women escaping domestic and family violence, people within LGBTQIA+ communities and older Australians – particularly those who experience relationship breakdown later in life. These are important groups to understand in the context of better, more relevant data for decision-making around the impacts of poverty.
1.48Answers from DSS in 2023 to questions in Senate Estimates, confirmed a deterioration in service delivery for Social Services and a significant issue with workforce retention in DSS since the Albanese Government came to office.[18]More efficient service delivery and service improvement is essential for individuals to navigate the system and to ensure they are on the right welfare payments. Improvement in this area is a matter for the Albanese Government.
1.49The Coalition does not agree with recommendations (7, 15, 16 & 17) that refer to the Economic Advisory Committee. The Economic Inclusion Advisory Committee Act 2023 was passed in late 2023 was not supported by the Coalition.
1.50The Coalition’s position is that this permanent Advisory Committee is a waste of money and will just add to an already growing bureaucracy.
1.51Its task is to advise on matters such as economic inclusion, adequacy of income support, reduction of obstacles to economic involvement in the context of fiscal outlook and strategy and it has the responsibility to identify work within its scope.
1.52Fuelled by unmanaged high inflation, Australia’s working poor are growing.
1.53Raising the rate of income support is not the panacea for alleviating poverty that this report suggests, and nor are those receiving welfare payments the only cohort experiencing poverty.
1.54The charity sector is reporting more and more working poor across Australian jurisdictions, with people not previously seen by these organisations now seeking food parcels, emergency relief and entering homelessness. It is unmanaged fiscal policy impacting the cost of living that erodes their standard of living.
1.55In 2023 the Coalition supported some, though not all, increases to welfare payments in the Strengthening the Safety Net Bill 2023. The challenge in making ends meet when inflation is high over longer periods means each dollar buys less.
1.56Of significance in light of this report’s recommendations, the Government can also do more to improve service delivery to DSS clients, as service which has deteriorated since the Albanese Government came into office.
1.57Coalition Senators thank all contributors to this Community Affairs Reference Committee on The Extent and Nature of Poverty in Australia.
Senator Kerrynne LiddleSenator Wendy Askew
Senator Maria KovacicSenator Dave Sharma
Footnotes
[1]Financial Counselling Australia, Submission 31, p. 2.
[2]Parliament of Australia, High inflation = higher social security rate increases, 6 September 2022, https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/FlagPost/2022/September/High_inflation_and_pension_indexation.
[3]Don Arthur, Michael Klapdor and Matthew Thomas, Social Service and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023, Bills Digest No. 88, 2022–23, Parliamentary Library, Canberra, p. 18.
[4]Department of Social Services, Submission 12, p. 3.
[5]Peter Whiteford, ‘Dutton’s JobSeeker plans would at first leave 640,000 worse off and 168,000 better off’, The Conversation, 1 August 2023, https://theconversation.com/duttons-jobseeker-plans-would-at-first-leave-640-000-worse-off-and-168-000-better-off-210699.
[6]Parliament of Australia, Social security and family assistance, https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/pubs/BriefingBook47p/SocialSecurityFamilyAssistance.
[7] Liberal Party of Australia, Budget in Reply, https://www.liberal.org.au/latest-news/2023/05/11/budget-reply.
[8]Senate Community Affairs References Committee, The extent and nature of poverty in Australia, pp. 57–58.
[9]Jesuit Social Services, Submission 120, pp. 10–11.
[10]Reserve Bank of Australia, Long-term unemployment in Australia, December 2020, p. 48.
[11]Gareth McKnight, Sam Tomlin, Ted O’Connor and Jarrod Lucas, ‘Federal Liberals want cashless debit card reintroduced due to crime, social issues in remote WA, Australian Broadcasting Corporation, 2 February 2024, https://www.abc.net.au/news/2024-02-02/liberals-back-cdc-reintroduction-remote-western-australia/103413970; Amelia Costigan and Jodie Hamilton, ‘Ceduna looks for solutions to antisocial behaviour in wake of Cashless Debit Card’, Australian Broadcasting Corporation, 17 February 2024, https://www.abc.net.au/news/2024-02-17/ceduna-crime-wave-after-cashless-debit-card-locals-want-jobs/103476386.
[12]Australian Institute of Family Studies, Submission 14, p. 8.
[13]Australian Council of Social Services and the University of New South Wales, Poverty in Australia 2022 – a snapshot, p. 9.
[14]The Smith Family, Submission 1, p. 6.
[15]Australian Institute of Family Studies, Submission 14, p. 8.
[16]Financial Counselling Australia, Submission 31, p. 3.
[17]Australian Urban Housing Institute, What is the right level of social housing for Australia? https://www.ahuri.edu.au/analysis/brief/what-right-level-social-housing-australia.
[18]Official Committee Hansard, 25 October 2023 pp. 3–48.
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