MYTH #2

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“Australia spends too much on Unemployment benefits”

Australia ranks 25^th of the 30 countries in the OECD in terms of government expenditure on
unemployment benefits – spending a mere 0.5% of GDP.

 

As a result, Newstart recipients receive a very low rate of payment compared to other developed countries: $257 per week (not including rent assistance), which is only 64% of what is needed to live out of poverty. In fact, unemployment benefits have not risen in real terms since 1994. As a result, over the last two decades the Newstart Allowance has reduced from being the equivalent of 54% of the minimum wage to just 40%. This means payments to job-seekers are not meeting the true cost of living.

Meanwhile the cost of living has gone up significantly over this same period, as shown by the 50% increase in the poverty line [see below graph]. Consequently, there has developed a growing gap between the Newstart benefit and what is needed to live out of poverty. In this situation, how exactly are the unemployed meant to survive?

 

And yet despite this current starvation rate of Newstart that subjects hundreds of thousands to extreme poverty every year, the Coalition government has undertaken the most wide-ranging attacks on the unemployment benefit ever seen since the benefit was introduced. Not only have the payment rates for Newstart been frozen for the next three years and the Newstart eligibility age lifted to 25, the Coalition is still pushing its plan to kick all unemployed people under 30 off the benefit for six months of the year.

In fact, the Coalition Government declared at the G20 conference in November 2014 that its proposed cuts to the unemployment benefit are the centrepiece of its plan to boost the Australian economy!

If we don’t fight back against this inhumane treatment of the unemployed, who will?

 

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