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Thursday, 10 May 2012
Page: 3127

Budget

Senator SIEWERT (Western Australia—Australian Greens Whip) (14:26): My question is to Minister Wong, representing the Treasurer. My question concerns the budget announcement that people trying to survive on Newstart and other allowances will receive $210 a year supplementary allowance, which equates to less than $4 a week, raises Newstart to $248 a week and leaves recipients $126 below the poverty line. What evidence does the government have that a person can support themselves on $248 per week? What were the policy and economic factors that the government used to arrive at the sum of $210 per year, and who undertook the modelling underpinning that policy decision?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:26): The senator is correct; as part of the government's Spreading the Benefits of the Boom package, there is an additional supplementary allowance to be payable to income support recipients. The cost of that is around $1 billion over the forward estimates. I note that the senator is one of the people who have been most strong in their advocacy for recipients of Newstart and for an increase in the Newstart rate, and I congratulate her for participating in that campaign. I thought her involvement on a personal level on that was very impressive. The government have made it clear that we are not of the view that it is appropriate nor fiscally possible to increase the Newstart rate. Nevertheless, we do believe that in times where we can provide some additional assistance to income support recipients we should do so. As part of the Spreading the Benefits of the Boom package not only have we provided a significant amount of assistance to families; we have also included the supplement to which the senator refers.

In terms of the package more broadly, the senator would be aware that it is very much targeted, both in the family payment area and in the income support supplement area, to low- and middle-income Australia. If you look at the eligibility, for example, for the families package, that is obviously for families who are receiving family tax benefit A, with differential rates for those on the maximum rate, which are obviously families who receive much less income. In terms of the supplement, whilst I appreciate that the senator will continue to advocate for a change in the Newstart rate, that is not the approach that the government is taking. We do believe, at a time when the unemployment rate has fallen to 4.9 per cent, as we have seen today, and remains extremely low, that our focus should be on encouraging participation and bringing more people into the workforce.

Senator SIEWERT (Western Australia—Australian Greens Whip) (14:28): Mr President, I ask a supplementary question. Given that the minister did not answer my first question, I will ask it again. Could the minister please outline what advice and economic factors led them to come up with the sum of $210 per year and what makes the government think that that will make any difference to someone trying to survive on $248 a week?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:29): I was trying to be of some help to the senator, but clearly I was not. The government—I explained to the senator—believed that it was appropriate in the Spreading the Benefits of the Boom package to provide support to low- and middle-income Australia. We included, as a result of those considerations, the supplement to which she refers. I appreciate that her position is that the Newstart rate should be changed. That is not the position of the government. As I have said, the government's first priority is to help people get paid work. We, I think, have demonstrated our commitment to that. If you look at where the unemployment rate is today, if you look at the assistance that is provided to people who are looking for work and if you look at the increased numbers of people over time participating, then I think the policy position is clear. (Time expired)

Senator SIEWERT (Western Australia—Australian Greens Whip) (14:30): Mr President, I ask a further supplementary question. Maybe I should make the question really simple. Minister, did the government just pull the figure of $210 a year out of a hat?

Senator WONG (South Australia—Minister for Finance and Deregulation) (14:30): The government made a decision to put in place a supplementary allowance, and that is the figure that the government has chosen. As I said, I appreciate that the senator does not believe that is appropriate. If she believes it is so inappropriate, perhaps she should advocate for us not to pay it. But we took the view, when we diverted the company tax cut funds and directed those to middle-income and low-income Australia, that it was important for three particular groups to obtain support: families on the lowest incomes, middle-income families and income support recipients. So the government determined the various allocations and increased payments to those groups. That is in the budget. As I said, you are looking at around $1 billion over the forward estimates.