Travelling around rural and coastal towns, you cannot fail to notice the number of shops that have closed or are empty. Despite the overall good economic figures for Australia, many businesses are struggling. In addition, some of our major industries, including car manufacturing and refineries, are moving offshore resulting in big job losses, hitting towns like Geelong very hard.
Minister for Social Services Kevin Andrews is introducing a review of income transfers, particularly to the unemployed and those on disability benefits. He has said that the aged pensions will not be touched, though this is where most of the problem lies.
The age pension costs Australia $36 billion a year, a third of total welfare spending, with Family Payments costing $26 billion. In the last ten years, the cost of the age pension has increased by nearly $13 billion, but only $5 billion of this was due to ageing of the population. The rest of it resulted from generous changes to entitlements and eligibility.
The then shadow treasurer Joe Hockey on 17 April 2012 told the Institute of Economic Affairs in London that 'all developed countries are now facing the end of the era of universal entitlement'. He continued: 'Addressing the ongoing fiscal crises will involve the winding back of universal access to payments and entitlements from the state.' What might this mean?
The cost of various entitlements varied from $15 billion for the Disability Support Pension, $8 billion for Newstart, and $5 billion for Parenting Payments. Yet rather than causing a blow-out in the budget, as a proportion of the overall economy these payments have actually decreased over the last ten years.
One would welcome a review of the Newstart benefit of $36 a day for a single person aged 22 to 65 ($250.50 a week), which is only 45 per cent of the after-tax minimum wage and $130 below the poverty line. Compare this with the aged pension rate at $53 day. The Newstart payment is unconscionably low. Even the Business Council of Australia supports an increase in the Newstart allowance, by $50 a week in the view of welfare advocates. Newstart is very important in helping tide people over while searching for jobs, and is already tightly targeted.
The numbers of unemployed have been trending up from a low in July 2011 of 4.9 per cent to 5.8 per cent in December 2013, numbering 716,000 people. In December full-time jobs decreased by 31,600,