NewStart allowance gap grows wider
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When payments were adjusted this month pensioners received an extra $6.70 per fortnight while unemployed Australians on Newstart received $2.90 per fortnight, according to the article.
The article says Newstart used to be close to the pension but is now only about two-thirds of it, and is on track to amount to less than half of the pension by 2040 if current trends continue.
The gap is widening because the pension is indexed to male wages—typically rising about 4.5% a year—while Newstart (and student and sole‑parent allowances) are indexed to the lower consumer price index (CPI), typically about 2.5% a year.
Speaking at the National Press Club, Treasurer Wayne Swan acknowledged there is a case about the gap but ruled out any immediate attempt to close it, saying longer‑term solutions are difficult given the fiscal pressures the government is facing.
The article cites the Australian Council of Social Service saying Newstart is about $35 per day, and that this low rate makes it hard for people on it to present themselves for jobs and is hindering their efforts to find paid work.
According to the article, there is a growing consensus—from business organisations, economists, the union movement and the social services sector—that the current Newstart rate is simply not enough and should be reconsidered.
No. The Treasurer offered no hope to veterans who want their military superannuation pensions indexed to male wages rather than the CPI, and noted a 2007 inquiry into indexation had knocked back that approach.
Mr Swan said he would not make predictions about whether the disparity will worsen over the next decade and stressed that his priority is getting people into jobs, rather than promising immediate changes to indexation or rates.
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