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Increase Newstart and do more to help jobless find work: report

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Unemployment benefits should be increased by more than $120 a week and the unemployed should not be treated as “dole bludgers” when many – including former car industry workers – were not responsible for losing their jobs, argues a new report.

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The University of Adelaide’s South Australian Centre for Economic Studies (SACES) report calls on the Federal Government to increase to Newstart payments and treat the long-term unemployed with sensitivity.

Newstart currently stands at $278 a week but the SACES report, Newstart Allowance: is it time to raise it? published today recommends a maximum increase to $398 per week.

The report analysed the link between the Average Weekly Earnings – ABS wage estimates from the last 28 years – and Newstart Allowances since 1991.

It said the the $278 allowance, designed to act as a percentage of attainable earnings, had fallen 4.7 per cent for males and 7.9 per cent for females.

Source: Newstart Allowance: is it time to raise it? (2019)

If these percentages had stayed the same, rather than decreased, the weekly unemployment benefit would now be worth $347 for males and $356 for females, the report said.

It then compared social and financial influences, such as rental housing costs, and concluded the amount should be raised to a minimum of $360 and a maximum of $400.

“An increase between $80 and $230 per week would be justified on the basis of equity for the recipients and in reducing the poverty gap many Newstart recipients face, while it would also help the unemployed to be better resourced for finding employment,” said SACES Executive Director Michael O’Neil.

“There would appear to be general agreement on the need to raise the Newstart Allowance from a wide range of stakeholders, including form the business community, the welfare sector, academics and researchers, and the wider community.”

South Australia’s seasonally adjusted unemployment figures collected from the Australian Bureau of Statistics (ABS) clock-in our unemployment levels at 6.3 per cent in September: the nation’s second worst percentage for joblessness.

But the report states individuals living in poverty would benefit greatly if Newstart payments increased and most long-term unemployed Australians are older and would benefit from more resources.

“Recent comments in politics illustrate an all-too-pervasive notion of the jobseeker as ‘dole bludger’, a recipient who is portrayed as a drain on the taxpayer and the Budget, and who is undeserving,” said O’Neil.

“This is despite the fact that many unemployed individuals have a long work history, have paid taxes, and often through no fault of their own find themselves unemployed.

“A good example of this is the thousands of car workers who lost their jobs when Australia’s automotive manufacturing industry collapsed,

“A different attitude and approach is required by governments, which have tools available to them that could be used to good effect.

“These include facilities for further education and training; incentive payments for employers who sponsor new staff and training; and regional, community and industry initiatives that address intergenerational barriers to employment.”

The report will be forwarded to the Federal Government’s Senate Standing Committee on Community Affairs to inform their investigation on the Newstart Allowance scheme’s effectiveness.

Michael O’Neil also co-authored an InDaily opinion piece in May, detailing the economic benefits by council area of increasing Newstart.

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