The Senate Community Affairs References Committee Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia April 2020 © Commonwealth of Australia 2020 ISBN 978-1-76093-060-8 (Printed Version) ISBN 978-1-76093-060-8 (HTML Version) This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/. Printed by the Senate Printing Unit, Parliament House, Canberra. Committee Members Chair Senator Rachel Siewert AG, WA Deputy Chair Senator Wendy Askew LP, TAS Members Senator Catryna Bilyk ALP, TAS (from 5 February 2020) Senator Hollie Hughes LP, NSW Senator Malarndirri McCarthy ALP, NT Senator Anne Urquhart ALP, TAS Substitute Members Senator Sue Lines ALP, WA (for Senator Urquhart on 6 November 2019) Participating Members Senator Patrick Dodson ALP, WA Senator Helen Polley ALP, TAS Senator Louise Pratt ALP, WA Former Members Senator Raff Ciccone ALP, VIC (from 5 December 2019 to 5 February 2020) Senator Deborah O'Neill ALP, NSW (until 5 December 2019) iii Secretariat Jeanette Radcliffe, Committee Secretary Apolline Kohen, Principal Research Officer Sina Hutton, Principal Research Officer Sarah Batts, Research Officer Clare Rhodes, Graduate Carol Stewart, Administrative Officer Stephanie Oberman, Administrative Officer PO Box 6100 Parliament House Canberra ACT 2600 Phone: 02 6277 3515 Fax: 02 6277 5829 E-mail: [email protected] Internet: www.aph.gov.au/senate_ca iv Table of Contents Committee Members ........................................................................................................................ iii Terms of Reference .......................................................................................................................... vii Abbreviations ..................................................................................................................................... ix List of Recommendations ................................................................................................................. xi Executive Summary ....................................................................................................................... xvii Chapter 1—Introduction .................................................................................................................... 1 Introduction .......................................................................................................................................... 1 Report structure ................................................................................................................................... 2 Labour market ...................................................................................................................................... 3 The income support system in Australia ......................................................................................... 7 Income support recipients ................................................................................................................ 18 Conduct of the inquiry ...................................................................................................................... 20 Chapter 2—The poverty trap........................................................................................................... 23 Measures of poverty ......................................................................................................................... 23 Committee view ................................................................................................................................. 29 The poverty trap ................................................................................................................................. 30 Calls for an immediate raise ............................................................................................................ 40 Committee view ................................................................................................................................. 41 Chapter 3—Entrenching disadvantage ........................................................................................ 45 Deteriorating physical and mental health ..................................................................................... 45 Committee view ................................................................................................................................. 54 Domestic and family violence .......................................................................................................... 56 Committee view ................................................................................................................................. 60 Education ............................................................................................................................................ 61 Committee view ................................................................................................................................. 65 Chapter 4—Bridging the funding gap .......................................................................................... 67 Individuals ......................................................................................................................................... 68 Community sector .............................................................................................................................. 70 State and territory governments ...................................................................................................... 73 Local governments ............................................................................................................................. 74 v Local and regional economies .......................................................................................................... 76 Committee view ................................................................................................................................. 77 Chapter 5—Barriers to employment .............................................................................................. 79 Labour market ................................................................................................................................... 79 Poverty ................................................................................................................................................ 91 Mutual obligation requirements and employment programs ..................................................... 95 Committee view ............................................................................................................................... 108 Chapter 6—Facing additional barriers to employment ........................................................... 111 People with disability and medical conditions ........................................................................... 112 Committee view ............................................................................................................................... 116 Older workers ................................................................................................................................... 117 Committee view ............................................................................................................................... 122 Single parents ................................................................................................................................... 123 Committee view ............................................................................................................................... 125 People living in remote, rural and regional areas ....................................................................... 126 Committee view ............................................................................................................................... 128 First Nations Peoples ....................................................................................................................... 129 Committee view ............................................................................................................................... 134 Young people .................................................................................................................................... 136 Committee view ............................................................................................................................... 139 Chapter 7—Achieving a minimum standard of living ........................................................... 141 Past reviews ..................................................................................................................................... 141 Overseas jurisdictions...................................................................................................................... 144 Key principles for reforming the income support system ........................................................ 147 An effective review mechanism ..................................................................................................... 152 Economic impacts ..........................................................................................................................