Boosting 'Embarassment' Welfare Payments Would Help Economy

Newstart payments haven't increased in 24 years.

The rate of Newstart payments has been labelled a "national embarrassment" as calls to increase the welfare allowance grow louder after a landmark report outlined the economic benefits of such a reform.

The Australian Council of Social Service has urged the government to immediately raise payments following the release of a new report from accounting giant Deloitte. The report, commissioned by ACOSS, found lifting allowances by $75 per week would lead to a boost for the Australian economy and to regional communities.

"The report finds that increasing these payments will boost wellbeing in regional communities doing it the toughest, lifting the incomes of people most in need, as well as delivering 12,000 new jobs," ACOSS said.

"The message from the economists at Deloitte is clear: lifting Newstart and reducing poverty and inequality is resoundingly good for the economy."

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The current rate for a single person, $272.90 per week, has not risen in real terms for two decades. Other government welfare payments, like the aged pension, have risen significantly in that time.

The Newstart rate is well below the minimum wage ($694 a week) and poverty line, with previous research from the Salvation Army saying recipients are surviving on just $17 a day after paying for accommodation.

The amount of payment available under government welfare arrangements has increasingly come under the spotlight in recent times, with calls from various charities, unionseconomists, and the federal Labor and Greens parties to raise the rate.

ACOSS chief executive Cassandra Goldie is demanding action.

"What we'd like to see from both major parties is a commitment to immediately increase the Newstart payment by $75 per week," Goldie told reporters on Monday.

"What we're talking about is a group of people who have been deeply affected by the refusal of successive governments to index allowances in the same way we've been indexing the aged pension."

Labor's position is to review Newstart if it forms government, but Goldie says that is "not good enough".

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"We welcome Labor's acknowledgement that it's too low, we welcome a commitment to do a review but the review should be about how we never end up this situation again," she said.

Labor MPs Jim Chalmers and Terri Butler told reporters on Monday they were looking forward to a review of payments.

"What we want to do is go about it in a very responsible and considered, measured way in government with full resources," Chalmers said.

"Tapping some of the best minds in this area to work out all the various interactions of Newstart and other government payments and see if anything can be done about it."

Greens senator Rachel Siewert, who last week introduced a bill into the parliament that proposed raising Newstart by $75 a week, said the change was overdue.

"This is a reform that would help some of the most disadvantaged members of our community, those who struggle with even the basics like being able to afford food," she said.

"The Parliament now has the chance to make a concrete difference to people’s lives and ensure that people in our community aren’t living in poverty while they look for work."

Australian Council of Trade Unions president Michele O’Neil also backed the reform.

"Too many people in Australia are struggling to make ends meet. Whether people are in work or not, we need to change the rules so that no-one lives in poverty," she said.

With AAP.