Fixing “unnecessarily cruel” dole payments is a more urgent priority than budget repair, a leading economist says.
“It is our standout failure as a nation,” Deloitte Access Economics senior partner Chris Richardson said.
“I’m a longstanding campaigner for budget repair, but I would rank it behind the need to lift unemployment benefits in Australia.”
Newstart and Youth Allowance have both slipped well behind other government payments over the past 25 years.
Unemployment benefits have also failed to keep pace with rises in the minimum wage.
“That combination says we here in Australia don’t have a dole-bludger problem — what we have is a society that is unnecessarily cruel,” Mr Richardson said.
About 1 million people receive either Newstart or the Youth Allowance.
Newstart recipients get about $40 per day to live on — just more than half what the average renter in Sydney pays their landlord per day.
Even when rental assistance and help with energy bills are added in, they have less than $50 a day to live on.
A third have been on Newstart for between two and five years.
“We make trouble for ourselves if we let the poorest of the poor get poorer,” Mr Richardson said.
His annual Budget Monitor, out this week, called for a $50-per-week raise in unemployment benefits, at a cost of $3 billion per year to the budget.
“That’s a lot of money, but it’s a lot of money because we have to catch up to the wrongs of the past,” he said.
South Australian independent senator Tim Storer has made increasing Newstart a priority in his political career and has some ideas about how to raise the $3 billion.
“For example, extending the GST to financial services would more than make up for the cost of that $50 per week,” he said.
“I certainly would hope that it would be addressed in the budget next week.”