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Will the budget address poverty?

A report from the new Interim Economic Inclusion Advisory Committee calls for increased government payments, but is the government listening?

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Last week the federal government released the first report from the Interim Economic Inclusion Advisory Committee.

The committee was established as part of a deal with ACT Senator David Pocock to pass the government’s industrial relations legislation in November 2022.

The report contains no fewer than 37 recommendations to promote economic inclusion and reduce poverty. 

Increase government payments

Key points

  • A report of the Interim Economic Inclusion Advisory Committee made 37 recommendations to promote economic inclusion and alleviate poverty.

  • It suggested raising Commonwealth Rent Assistance – a policy recommendation supported by National Seniors in its budget submission.

  • Policies to reduce the concentration of disadvantage in geographic areas and to remove barriers to economic inclusion among families with children were also floated.

The first and most prominent of these recommendations was to increase the base rates for the JobSeeker Payment and other related working payments – something that people struggling to find and retain employment in later life would likely welcome. 

Lobby groups such as ACOSS and the ACTU have been arguing for the JobSeeker rate to increase by $26.50 per day to $76 a day. 

Based on the response of the government in the days after the announcement, it appears any change in the upcoming budget is unlikely, due to competing pressures. 

The second recommendation, to increase Commonwealth Rent Assistance (CRA), may be more likely given this measure is targeted at those doing it tougher, and because its impact would be delivered more broadly. 

Currently, 1.29 million people receive CRA with 24.1% of these being people living on the Age Pension, 22.6% receiving JobSeeker and 20.7% on a disability payment.  

National Seniors Australia has long supported an increase to CRA in the face of upwardly spiralling rental costs. 

The recommendation is one of 12 made to government in National Seniors’ federal budget submission

An increase to the maximum rate of CRA of $30 per week would cost about $1.5 billion and provide some immediate relief to those struggling to put a roof over their heads.

Let people work

Other recommendations from the report philosophically align with National Seniors’ own policy agenda. 

Last year, our Let Pensioners Work policy – which is designed to reduce barriers to workforce participation among older people to fill crippling workforce vacancies – was expanded to include other government payment recipients. 

This is outlined in detail in our submission to the Employment White Paper consultation. 

We argued that income test taper rates need to be revised to make the transition to work more rewarding, taking away the disincentive that exists when payments drop sharply. Doing so for all payment recipients is important because this will help to boost income and savings in later life, given the direct relationship between workforce participation and retirement income. 

The Interim Economic Inclusion Advisory Committee report echoed this in its rejection of punitive barriers to workforce participation in childcare subsidy rules.  

Helping and encouraging people to enter the workforce and find secure jobs is one of the best ways to tackle poverty. 

The committee argued that restricting access to early childhood education and care for people on low incomes is counterproductive, arguing that children in these circumstances benefit the most from participating in these activities.

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