Additional comments from the Australian Greens
Not a safety net, a parachute with holes
... this increase doesn't recognise... It doesn't recognise how close I am to homelessness. It doesn't recognise how close many of my friends are to homelessness. It doesn't recognise, for the people who already are out of a place to live, and how it's impossible for them to find anything …I wouldn't call it a safety net, I would call it a parachute with holes. If you are on JobSeeker, you are going to hit the bottom at some point. And I do think ending up on JobSeeker, it puts you into a state of poverty, it makes it much harder to get out of.
Sam Thomas
1.1The Australian Greens thank all those who provided evidence on the bill, and thank all those who have advocated since the election for a meaningful increase to income support. Before the Budget, people living in poverty, advocates, community members, social services organisations and many others came together to call for a meaningful increase to the rate of income support. Their calls were reinforced by the recommendation of the Economic Inclusion Advisory Committee that called for ‘a substantial increase in the base rates of JobSeeker Payment and related working age payments as a first priority’.[1]
1.2We, like so many others, are saddened and disappointed to see that the Labor party has chosen to ignore the evidence, the advocacy, calls from former Labor ministers and current Labor backbenchers,[2] and most importantly the direct calls for action from people relying on income support. Instead, they have chosen to leave people relying on income support payments below the poverty line.
1.3Multiple submissions and witnesses to the inquiry outlined that the changes are inadequate in the face of inadequate payments and rising costs of living.
1.4The Anti-Poverty Network South Australia said:
This Federal Budget was an opportunity to dramatically repair our long-eroded safety-net, but these measures are nowhere near what is needed. Particularly, for people on JobSeeker, who are desperately struggling to keep a roof over their head, and put food on the table, there will barely be any noticeable difference to their quality of life.[3]
1.5Similarly, the Antipoverty Centre submitted:
It is frustrating and exhausting to be constantly called upon by government to do the labour of explaining that which is simple and unchanging. Enough is enough. The changes in this bill are pathetically inadequate. Nonetheless, they could and should have been introduced and made immediately.
There is no excuse for leaving the welfare recipients who will be affected waiting months to get the pitiful relief that will come from these changes. Just as there is no excuse for continuing to inflict deep poverty on millions of people by leaving every working age payment well below the Henderson poverty line.[4]
1.6Similarly, ACOSS submitted:
ACOSS supports the passage of the Bill so that people with the lowest incomes receive the small increase in payments it offers. However, the additional amount it adds to JobSeeker and related payments is clearly not enough to reduce poverty. Likewise, the 15 per cent increase to Rent Assistance is not enough to significantly reduce housing stress and homelessness.
The Commonwealth Government must commit to delivering a substantial increase to JobSeeker and related payments. These payments should be raised by at least $25 a day to achieve parity with pension rates and to lift people out of poverty.[5]
1.7The changes to the rate of JobSeeker are inadequate, and leave it far below the poverty line. The Australian Government should act urgently and ensure that JobSeeker and all other payments are above the poverty line.
Recommendation 1
1.8That the Australian Government immediately lift income support payments above the poverty line.
1.9The Australian Greens agree with the profound concerns raised by witnesses about the inadequacy of the changes to the Parenting Payment Single. The joint submission from the Council of Single Mothers and their Children and the Single Mother Families Australia outlined:
The 2023–24 budget measure will not fully reverse the 2006 changes as it will lift the youngest child cut-off age to 14 rather than 16 years. No research evidence has been offered to demonstrate why age 14 is significant in allowing parents to undertake more work or how it differs from earlier ages in terms of the level of parental supervision required or the level of income support needed by single parents.[6]
1.10Additionally, the Greens are particularly concerned in the way that the delay in implementing these changes will impact single parents – especially single parents. As the Department’s own evidence outlines, there are over 8,000 single principal carers with a child turning 8 between 19 May and 20 September 2023.[7]
1.11The inadequate, delayed nature of the government’s actions on this issue, as on others, demonstrate a refusal to grapple with the incredible challenges faced by single parents, and by people relying on income support more broadly. We are particularly disappointed that the Government chose to vote against a motion in the House of Representatives that called for an earlier start date for the changes in relation to Parenting Payment Single.[8]
Recommendation 2
1.12That the Australian Government take urgent action to ensure single principal carers with children turning 8 before 20 September 2023 are not disadvantaged by the delayed start date for the changes in the bill.
1.13The scale of the Labor Party’s response to the rental crisis in this bill, in the form of a 15 per cent increase to the maximum rate of Commonwealth Rent Assistance, is manifestly inadequate.
1.14As the Antipoverty Centre noted in their submission:
The so-called increase [to Commonwealth Rent Assistance] will do nothing for people being squeezed harder and harder by landlords who are determined to have us build their wealth when we can’t even afford the basics we need to live.[9]
The housing crisis has exacerbated poverty, homelessness and risk of homelessness for people receiving JobSeeker and related payments.
1.15ACOSS stated:
The 15 per cent increase to Rent Assistance will not compensate for the significant gap between income support payments and average rents in the private rental market. A single person paying more than $175 a week in rent will receive a maximum increase of $11 a week. Fewer than 40 per cent of people receiving JobSeeker receive Rent Assistance and, of those who do, the median rent paid is $230 a week. The vast majority pay well above 30percent of their income in rent, which is a marker of housing stress. It is likely that fewer than 5 per cent of people who receive Rent Assistance will find relief from this housing stress due to the increased payment.[10]
1.16As ACOSS noted, based on the Department’s own data, it is likely that less than five per cent of Commonwealth Rent Assistance (CRA) recipients will move out of rental stress as a result of the increase to the supplement.[11] The Labor party’s arguments that the changes to CRA fail to recognise the scale of the housing crisis and the inadequacy of the income support system in the face of skyrocketing rents.
1.17Wesley Mission noted the importance of action to address the housing crisis more broadly, as a step that would benefit income support recipients:
While this adjustment [to Commonwealth Rent Assistance] can provide increased flexibility for single primary caregivers and their families, its impact may be limited by high living costs and unrestricted rent increases. Wesley Mission suggests adopting policies that link rent increases to inflation, similar to the Australian Capital Territory's approach. This could help reduce excessive rental hikes and the associated financial stress on tenants.[12]
Recommendation 3
1.18That the Australian Government take urgent action to protect renters – including income support recipients – by limiting rent increases.
1.19A number of witnesses also noted that the Bill presents an opportunity to implement other improvements to the income support system. Economic Justice Australia noted in their submission:
There is a particular need for reform to address aspects of social security income testing that fuel poverty and barriers to workforce participation among people with disability.
Increasing the income free area with indexation would be consistent with policies purportedly designed to encourage entry, or re-entry, into the job market. Failure to meaningfully increase the income free area limits a recipient’s ability to gain genuine work experience without being penalised by reductions in payments, thereby encouraging a recipient’s return to work or entry into the workforce.[13]
1.20They specifically recommended changes to expand the income free area:
That the Bill be revised to include amendments providing for proportionate increases in the ‘income free area’ for working age social security income support payments such that the ‘income free area’ for all payments aligns with that for Age Pension.[14]
1.21Similarly, the Antipoverty Centre argued that changes to income free areas would benefit income support recipients:
The income free area and taper rates applied to welfare payments must be adjusted to ensure the one-in-five people who rely on an unemployment payment even though they are employed don’t suffer severe financial penalties.[15]
Recommendation 4
1.22That the Australian Government consider steps to enable JobSeeker and other income support recipients to earn more before their payments are cut off.
1.23The recent report of the Robodebt Royal Commission adds weight to the many calls for action on income support payments. In discussing the challenges of designing or implementing a compensation scheme for those harmed by the Robodebt scheme, the final report noted:
A better use of the money would be to lift the rate at which social security benefits are paid, to help recipients achieve some semblance of the “security” element of that term; because with financial security comes the dignity to which social security recipients are entitled and to which the Scheme was so damaging.[16]
1.24In addition, the Royal Commission’s final report made clear, direct recommendations to begin addressing some of the failures of Robodebt, including direct legislative changes that could be implemented by this Bill. Inparticular, Recommendation 18.2 stated:
The Commonwealth should repeal s 1234B of the Social Security Act and reinstate the effective limitation period of six years for the bringing of proceedings to recover debts under Part 5.2 of the Act formerly contained in s 1232 and s 1236 of that Act, before repeal of the relevant sub-sections by the Budget Savings (Omnibus) Act (No 55) 2016 (Cth). There is no reason that current and former social security recipients should be on any different footing from other debtors.[17]
1.25The Australian Greens support that recommendation, and urge the Government to act on it immediately, using this bill as an opportunity to take action without delay.
Recommendation 5
1.26That the Bill be amended in order to implement recommendation 18.2 of the Robodebt Royal Commission.
Senator Janet Rice
Deputy Chair
Footnotes
[1]Interim Economic Inclusion Advisory Committee, 2023–24 Report to the Australian Government, April 2023, https://ministers.treasury.gov.au/sites/ministers.treasury.gov.au/files/2023-04/eiac-report.pdf.
[2]Australian Council of Social Service, Raise the Rate Open Letter, https://www.acoss.org.au/raise-the-rate-open-letter/, (accessed 21 July 2023).
[3]Anti-Poverty Network South Australia, Submission 11, [p. 1].
[4]Antipoverty Centre, Submission 26, [p. 1].
[5]Australian Council of Social Service, Submission 22, [p. 1].
[6]Council of Single Mothers and their Children, Single Mother Families Australia, Submission 5, p. 9.
[7]Services Australia, Answers to questions from Senator Janet Rice, (tabled 31 May 2023).
[8]Votes and Proceedings, No. 60, 31 May 2023, p. 763.
[9]Antipoverty Centre Inc, Submission 26, p. 4.
[10]Australian Council of Social Service, Submission 22, p. 3.
[11]Australian Council of Social Service, Submission 22; Services Australia, Answers to questions from Senator Janet Rice, (tabled 31 May 2023).
[12]Wesley Mission, Submission 19, p. 2.
[13]Economic Justice Australia, Submission 21, [p. 2].
[14]Economic Justice Australia, Submission 21, [p. 3].
[15]Antipoverty Centre Inc, Submission 26, p. 8.
[16]Royal Commission into the Robodebt Scheme, Report: Volume 1, July 2023, p. 659.
[17]Royal Commission into the Robodebt Scheme, Report: Volume 1, July 2023, pp. xvii and 509.
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