The Australian Council of Social Service today said raising the single rate of Newstart Allowance could be the greatest legacy of the 43rd Parliament if the Federal Government takes the courageous step for the first time in 20 years.
“The Hawke-Keating government was the last government brave enough to increase unemployment benefits in 1994, now this government has the chance before the federal election to leave a lasting legacy,” said ACOSS CEO Dr Cassandra Goldie. “The government would certainly have the support of the wider community, including the entire community welfare sector, unions, business, the Organisation for Economic Co-ordination and Development, and its own Henry Tax Review panel.”
Speaking at the launch of the peak community welfare body’s 2013 Budget submission today, Dr Goldie said, “Increasing the abysmally low base rate of Allowance payments by $50 a week is the single most important thing this government could do in the immediate term to lift more than one million people out of worsening poverty in Australia.
“This is not rocket science and it is completely fundable. We estimate it would cost about $800 million dollars this year to increase the payments, including indexation, and $1.8 billion in 2014-15.
“We understand the current pressures on the Budget, however, this is doable, especially if the Government tackled the current waste in the Budget in the form of tax avoidance and poorly targeted spending programs and tax breaks. We’ve identified around $6 billion dollars in savings, some of which could be used to fund this must needed increase.
“We are calling on the government to clamp down on things like the use of private ‘discretionary' trusts and capital gains. We are also proposing the scrapping of the health insurance rebate for ancillary or ‘extras' cover, the Seniors and Pensioners Tax Offset, and non-superannuation termination payments, which are wasteful measures.
“We are pleased the Federal Government has capped the deductions for education expenses and moved to make the superannuation system fairer. However it appears they have backtracked on the opportunity for more far-reaching reform of the retirement savings system, particularly the churning of income through super accounts to avoid taxes on wages.
“Now is the time for courageous decisions to be made in the national interest if we are to move towards creating a more sustainable tax base to fund the important social programs and services we all want into the future for our aging population.
“In his speech at the National Press Club this week, the President of the Business Council of Australia, Tony Shepherd, declared that our nation is at the crossroads and urged our political leaders to be brave and be prepared to lose their jobs to lift national prosperity. ACOSS supports those sentiments, especially the recognition that we need to do more as a country to ensure the benefits of that social progress are felt by all.
“With 2.2 million people, including 1 in 6 children living below the poverty line, we were pleased to hear the strong statement from Mr Shepherd that income support allowances need to ensure people without paid work are able to ‘live in dignity'. He is the latest in long line of prominent people speaking out in support of lifting the $35 a day Newstart payment.
“Now is the time for our federal leaders to listen to this widespread call and show this courage by prioritising an urgent increase in the single rate of Newstart Allowance in the May federal Budget,” Dr Goldie concluded.
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