You can survive on Newstart but you can’t live on it

Troppo readers may have noticed a Christmas “silly season” debate about an ill-advised assertion by Minister for Families, Housing, Community Services and Indigenous Affairs Jenny Macklin to the effect that she could live on Newstart Allowance (aka “the dole”) if she had to.

The assertion was in response to a typical media “gotcha” question of the sort that inevitably reduces political debate to the sub-puerile level.  In a strictly logical sense Macklin’s answer was clearly correct.  As Samuel J points out at Catallaxy:

All of the 330,000 people receiving Newstart are able to survive on it, otherwise they would have moved to the local cemetery. There are an estimated 182,000 long-term Newstart recipients – surely they are surviving on Newstart, or are we now paying Newstart to dead people?

The point was to lure Macklin into providing a response that would enable her to be painted … as arrogant, insensitive and out of touch with “real” people and their concerns.

Given that Jenny Macklin is almost certainly more knowledgeable and resourceful than the average Newstart recipient, there really isn’t any doubt that she could re-arrange her life and priorities and budget to survive on Newstart if circumstances required it.  But of course that wasn’t the point of the question.  The point was to lure Macklin into providing a response that would enable her to be painted (no doubt spuriously) by the tabloid media as arrogant, insensitive and out of touch with “real” people and their concerns. Having regard to subsequent coverage, the glib  journo’s gambit succeeded brilliantly.

However, although this is just the sort of meaningless “gotcha” journalism that is sadly now typical of Australian media including what were once the “quality” broadsheets, it actually raises some important issues: Is Newstart allowance fixed at an appropriate rate? Should it be much less than long-term pensions and benefits like Parenting Payment or the Age or Disability Pension (as it currently is)? By how much? Should parents be forced off the Parenting Payment when their youngest child reaches eight? Should there be exceptions to such a general rule?

As John Quiggin explains:

Over the late 1960s and early 1970s, pensions were increased to approximately the Henderson poverty line. In combination with some additional concessions and the introduction of Medicare, these changes virtually eliminated poverty among the old.

The changes to the value of the old age pension, relative to weekly earnings have been sustained.[1] Initially, unemployment benefits and supporting parents benefits (which replaced the former widows pension, IIRC) rose in line with the old age pension. Both were indexed to the CPI, but ad hoc adjustments kept them broadly in line with AWE. But the Howard government replaced CPI adjustment with AWE adjustment for pensions, while retaining indexation to the CPI for unemployment benefits. The result has been that the value of UB (now Newstart or some similarly Orwellian name) has fallen relative to both pensions and incomes generally.

The Howard government began forcing Parenting Payment recipients onto Newstart in 2006, but “grandfathered” existing entitlements of people already on Parenting Payment at that time. Macklin’s new “reforms” merely remove the grandfathering privilege.

In fact the gap between Newstart rates and other pensions (including the Parenting Payment) is now very large indeed, because Average Weekly Earnings have risen by around 65% over the last decade while CPI has risen by significantly less than 40% over the same period. Pseudonymous but very knowledgeable Canberra blogger Dave notes that the drop in weekly income for a Parenting Payment recipient with no income from part-time/casual work who is compulsorily transferred onto Newstart is $66 per week.

However, the reduction is much larger (up to $170 per week) for recipients who have been performing part-time/casual work to supplement their government benefit, because Newstart income test rules are much more punitive than the corresponding Parenting Payment rules.  This chart from Dave’s blog shows the differences:

Does it make sense to penalise the most those parents who have diligently sought and obtained casual work in a difficult economy?  What if they simply can’t obtain any additional shifts once forced onto Newstart,(as may well be the case given employment conditions in much of south-east Australia)?

John Quiggin succinctly summarises a general approach with which I agree:

There is a defensible case for setting the old age pension higher than UB (Newstart), particularly if the government pursues active labour market policies to help the long-term unemployed find jobs. The pension needs to be enough to live on for decades, over which time household goods have to be replaced, and other long-term expenses addressed. Most spells of unemployment last only a few months, so various kinds of expenditure can be deferred. But the gap that has emerged over the past 15 years is much larger than can be justified in this way, particularly in the case of supporting parents, who are more likely to spend long periods out of employment. Instead of completing the Howard agenda, the Gillard government ought to be looking at increasing the real value of benefits, allowing the unemployed to share in some of the growth in incomes for the community as a whole.

Finally, although the journalist’s question to Macklin was clearly asked in bad faith and without any interest in these very real issues (they have not subsequently been covered in the MSM), just how easy is it to live on Newstart? Clearly there are many variables, including not only number of children but also availability of part-time work and a range of other factors.  But for ease of calculation let’s just focus on the situation of a single parent Newstart recipient with one or two children and no casual work income. This person receives $266.50 per week Newstart payment. 11. KP: She/he will also receive some other family allowance benefits but let’s leave those out of calculation for present purposes because they don’t change when a person moves from Parenting Payment to Newstart. []

Of course, she/he is then immediately subject to the very strict job-seeking requirements applicable to Newstart.  Compliance with those requirements necessarily involves recipients in spending significant money each fortnight on public transport fares (to get to job interviews and Centrelink offices, and get to a public library to search newspapers and the Internet for jobs); a mobile phone account (so prospective employers can contact them readily and vice versa); and probably more “dressy” clothing than they may have needed while caring full-time for their young children.  Can they afford these things?  Let’s construct a hypothetical weekly budget for our newly compulsorily transferred Newstart sole parent. Let’s assume she/he lives in Darwin, where I am most familiar with the cost of living:

Weekly budget

Rent (NT public housing) $61.30

Electricity                         $30.00

Food, groceries etc       $130.00

Transport fares               $30.00 22. KP: assumes one return bus trip per week day only. []

Telephone                       $15.00 33. KP: assumes budget mobile contract or landline with careful use. []

TOTAL                          $266.30

Note that this “bare bones” budget  has completely expended the family’s Newstart allowance, but contains no budget items for clothing and footwear;44. KP: As already noted, recipients will certainly need respectable clothing to have any chance in the job market, not to mention the recipient and children retaining some shred of personal dignity. [] medical, dental or pharmaceutical expenses; leisure or sporting activities for children; or transport fares on weekends to allow relationships to be maintained with extended family.

As John Quiggin notes, for people who are unemployed for a relatively short space of time, some of the above expenses can be deferred until work is found. But the longer unemployment continues the less deferral of expenses is feasible. The things the family can’t afford begin impacting more and more directly and severely on the family’s life and dignity, and  restrict the recipient’s ability to find work more and more as time goes on. So the complete but relatively succinct answer to the question Jenny Macklin was asked is: I could survive on Newstart in a bare subsistence sense, but I could not live a life of human dignity for any sustained period of time if circumstances forced me into that position.

We already have an estimated 182,000 long-term Newstart recipients.  That number can only increase as more and more parents with children over eight years are forced onto Newstart. Many will never find any more than transient, insecure, minimum wage casual employment, and quite a few will never find work at all.  The changes Minister Macklin has just introduced finish the job the Howard government started, ensuring that a further generation of children will be condemned to a childhood of desperate borderline poverty followed by an adulthood of welfare dependency of their own.  Is that really the sort of Australia with which we feel comfortable in 2013?

This entry was posted in Economics and public policy, Politics - national, Social by Ken Parish. Bookmark the permalink.

About Ken Parish

Ken Parish is a legal academic at Charles Darwin University, with research areas in public law (constitutional and administrative law) and teaching & learning theory and practice. He has been a legal academic for almost 12 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in he early 1990s.

48 thoughts on “You can survive on Newstart but you can’t live on it

  1. Oh this is so true……
    Why not reward people who work as an incentive to move into more and more employment as their circumstances allow? I don’t understand why they are punishing those who have been working hard by paying them less? What they do not understand is most single parents that work – work as much as their circumstances and job opportunities allow, just to survive.
    And of course you must feel sorry for those single parents that are just sick and cannot improve their circumstances. If you haven’t been sick then working longer and more impossible hours will make a percentage of parents burn out and develop sickness and how will this help the community or those children in their care. These costs although very high to the individuals will also present a high cost ultimately to the community though largely not visible. I know this first hand because I had to be hospitalized after becoming ill, following a period of trying to work full-time with children who were over 8 years. I subsequently developed a chronic condition which I now have to manage and medicate while working.
    And what about the children, who now not only have less oportunities and psychologically feel less (and probably more depression and less self-esteem) than their peers as teenagers? I mean, so now parents are getting computer/education allowances but these will probably go to food expenses and mean families cannot access the computer schemes at public schools which can still cost about $350 per year per child (in school time only). Their parents are now out seeking work or working all the time and for some children this means greater risk for getting involved in crime or illicit substances or a host of other undesirable (for the community) activities – how does this help?
    Getting more work is currently at its most difficult given the global situation and it’s flow-on to the markets here and especially here in Queensland after the sacking of so many public servants – the job field is saturated. Also typically many job advertisements do not start appearing until later in January and February, when the decreases have started now at the worst time of year fiscally for parents. For example, my place of employment is closed for January and as a casual worker I do not receive holiday pay.
    Many won’t be able to afford to study either now to improve their skill set either to try and improve their opportunities or employment prospects like hourly rates (work smarter not harder etc) – it was already tight (with extra expenses like books and transport not really covered by the education allowance given the drop in benefits this equates to no education allowance which was about $62 per fortnight) – now study seems impossible.
    Another sad fact is (confirmed by an accountant) that many will also now be wedged between the upper limits that can be earned (withdependents) of newstart (approx 1394.50 gross per fortnight) and the higher tax rates that begin at 37,000 (30c in the dollar). So they’ll workj (if they can) a lot more for a lot less effectively for those extra hours
    Sadly too, in your example public housing rates were quoted – most of us don’t live in public housing and a percentage are trying to stay in their own homes because losing those will mean a slide into homelessness. You cannot even downsize your house or get a credit card to help you tide over any one-off expenses because on casual rates you don’t qualify for another loan or credit. So effectively on so many levels, many single parents and their children (which represent the future of this nation) are trapped in poverty.
    The theory is a lot different to the experiential unfortunately. When you haven’t money as an example, you won’t replace shoes for children until you absolutely have to, because this represents a sizable expense. Shoe replacement will inevitably occurr at a non-sale time and if there are sales because you’re working so much, by the time you get there, all the sizes and best deals will be gone. Then you can get shoes at charity. I have tried to do that – shoes I have bought for ten dollars only lasted a short time because although they looked okay they had been worn and the developing flaws aren’t always visible. (One child developed holes in theirs in the first week which I could not believe but it was true.) Its very difficult to get the size and type set down by the school at a charity shop when you need it. You can buy ahead and try to buy things you might need but that can also sometimes be a trap. Then given the culture today – its very likely your child won’t tell you but at school they are being stigmatized (and often bullied) because they are wearing odd shoes.
    The only saving grace is when people have been so kind to us it has brought tears to my eyes. If only they realise how much their small acts of kindness meant in a culture where you often feel isolated and despairing, and unable to think about the future because it would just spiral you into anxieties, which will not help.
    Thank you for your comments, your understanding as well. I did not choose this situation for my children or myself. We have done no wrong to be here, at this place in time. I do worry for the future of all Australians if these punitive and frankly destructive policies are continued.

    • Thanks for that CC. I really underscores the reality of the situation families with unemployed parents face on a day to day basis. Thanks for sharing it with us.

  2. Hi Ken,
    A very thorough piece.
    When ‘uneducated’ single mothers go back to work to earn the minimum wage and superannuation and tax is taken out of their gross income, I imagine what’s left is much the same as Newstart. How they’re supposed to save a deposit to buy a home is another matter.
    My focus is on teaching young women how not to become a single mother, how to form a good team before start creating a little family. John Gottman’s evidence-based research into what makes relationships work should be taught in all high schools.
    Is Jenny Macklin the right person to be Minister for Families, Community Services and Indigenous Affairs?
    Jenny Macklin gave an automatic response without giving it a thought. She shot from the lip. It was not a thoughtful response.
    She will do whatever she wants to do, she’s determined driven and she can do whatever she puts her mind to. Others are in a bad place. She doesn’t listen. There was a need to be humanitarian. Emotionally and psychologically she might have blind spots.
    I see that “Kenneth Alan “Ken” Parish is a former Australian politician. He was the Labor member for Millner in the Northern Territory Legislative Assembly from 1991 to 1994.”
    I wonder what your thoughts are about the NT Intervention and Jenny Macklin’s performance.
    On 23 November 2011, the Stronger Futures Policy legislation was introduced by Jenny Macklin to Parliament.
    Jeff McMullen worked so hard to try to have Aboriginal voices heard about the Intervention aka Stronger Futures, yet their voices seem to have been ignored.
    http://www.concernedaustralians.com.au
    I have been very disappointed in Jenny Macklin’s performance. On Australia Day 2012 when there was all that drama at the Aboriginal Tent Embassy, no one seemed to know who the minister for Indigenous Affairs was. Jenny Macklin certainly didn’t show her face. She is media shy. After the incident you’ve written about, she went on leave. This is not helpful at all, it is avoidant and hopeless.
    In 1993 I did an internship at The Australian in Parliament House, Canberra. I chose The Australian because Jamie Walker had done the best coverage of Mabo out of all the media. I went to press conferences with the then minister for Aboriginal Affairs Robert Tickner. He was so positive, so successful, supported by then Prime Minister Paul Keating. Aboriginal people loved Paul Keating, I once transcribed an elderly Aboriginal woman’s words to send a letter of love and gratitude to him.
    You live in Darwin, you’ve seen the politics of the Intervention and Stronger Futures unfold on the ground. I’m interested in what you’ve seen. Obviously alcohol abuse and domestic violence are big problems which the Basics Card and income management was designed to stop, but the statistics suggest that it hasn’t worked.
    http://overland.org.au/blogs/loudspeaker/2012/12/income-management-in-the-northern-territory-racism-is-still-the-issue/
    http://rollbacktheintervention.files.wordpress.com/2012/06/disturbing-nter-statistics-21-6-20121.pdf
    http://happychildrencom.wordpress.com

    • Frances wrote “My focus is on teaching young women how not to become a single mother, how to form a good team before start creating a little family. John Gottman’s evidence-based research into what makes relationships work should be taught in all high schools.”

      This is a good aim and I believe relationships should be taught in schools. However don’t forget that many single parents such as myself are not uneducated teens who got pregnant, but people who have been involved with a man who turned out in the long term to be a monster. Women seem to be taught to trust men but many men are just not trustworthy and men who appear to be sincere with good intentions can act a lot differently behind closed doors AFTER a woman is pregnant or gives birth. Most single parents I know who are females have horror stories to tell about how things went wrong in their relationships. The patriarchy seems to expect women to trust men and then deflects the blame for what men have done onto the women who are often the victims of abuse or otherwise and the patriarchy then demonises women as “single mothers” with connotations of being bludgers or uneducated or stupid or whatever other derogatory terms are used. Who in their right mind wants to end up on Newstart or Single Parents benefits? Every “single parent” is a human being with a story. Many are victims of failed relationships and nothing can ensure any relationship will last forever. What is the length of the average marriage in Australia? Isn’t it 50 percent ends in divorce and after how long? Nothing is ever simple or certain in life. The Labor Party who kicked some single parents from Parenting Payment to Newstart further disadvantaging the disadvantaged and thus leaving some children with less to eat each week or cheaper less nutritious food and less basic necessities should hang their heads in shame.

      • Hi Annice,
        I wholeheartedly agree with you … except that if young people were educated in high school, they would know that what you have said is the case, rather than learning from their own awful experience or from others, after the event.
        Something like 70% of men are unfaithful.
        If you read ‘When Men Batter Women’ by John Gottman, it’s a fascinating study by a psychologist with over 40 years evidence-based research into relationships. Some men are charming and they deliberately hide their true colours until a woman is trapped, as you say, pregnant or married. She can’t easily escape, she is vulnerable and then he changes. If she does escape it can take years to recover from the psychological symptoms of trauma.
        I’ve written about this in ‘The Family Law System:’
        http://francesjones.wordpress.com/2010/07/15/the-family-law-system/

        I am right with you on this. The Greens seem to be leading with this issue in the lead-up to the election, saying they want to increase Newstart by $50 a week. As you say, it is the right thing to do, to ensure children have the bare minimum standards.
        One in two marriages ends in divorce. There are a lot of women “left holding the baby.”

  3. The assertion was in response to a typical media “gotcha” question of the sort that inevitably reduces political debate to the sub-puerile level.

    I thought we were done with this kind of (to use your words) “sub-puerile” blogospheric self-righteous nonsense?

    What’s wrong with a question that, again using your words, “actually raises some important issues”?

    And as for the allegation subsequent coverage did not actually deal with those issues – it took me two seconds with Google to find this and I’m sure there’s plenty more out there if you actually bother trying to find it rather than ignorantly pontificating.

    • While I have a lot of regard for KP, I have to agree that the blogosphere getting sniffy with the media over gotcha questions is not really very different at all from the media getting sniffy after someone messes up answering a gotcha question.

    • BP

      The question raises important issues only if they are actually discussed in the MSM, and they haven’t been to any significant extent. You’re right that a couple of op-eds have been published, but. It was a cheap smart-arse question designed to get the less thoughtful punters foaming at the mouth and it succeeded. The overwhelming weight of discussion in the MSM, twitter etc since Macklin made the remark has been of the “what a wanker she is” type with little consideration of the serious issues surrounding welfare benefits generally and Newstart/Parenting Payment specifically. I don’t watch the commercial TV current affairs programs or listen to talkback radio but you can guarantee the same will have been true there (assuming they’re not all in Xmas recess).

      In any event, as I’m sure you realise, the comment about the journo’s question was mostly a hook leading into the serious discussion. I’m not interested in an argument about it, although feel free to carry on about it if that’s what interests you about the topic.

  4. Oh to be in public housing. My rent is $200 p/week and I currently survive on $300 p/week (NewStart and Rent Assistance). The reality is I spend very little on food as I
    desperately try and keep everything connected. And there is no point moving because cheaper private rental in Melbourne does not exist. I have already had to dip into my superannuation to stay housed. I wake up wonder why I feel defeated by life.

    • Yes, I was conscious when I compiled the weekly budget that assuming someone in public housing was a “best case” scenario in that respect. But that just emphasises how dire is the situation of people reliant on Newstart, which is the central point of the post. Your comment your lived experience, and that of Concerned Citizen earlier, really underline it in a way that those of us not experiencing it first hand can only imagine/describe abstractly. I assume you’re at an age where you actually CAN draw on your superannuation, which suggests your job quest is also a very tough one given the attitude of many employers towards older job seekers.

      • The only way I could draw superannuation was to claim hardship under the superannuation provisions. This means 26 weeks of consecutive Centrelink payments. One week of temp work will therefore render you intelligible at 25 weeks. One week where you might gross $700 bucks means no payment for that week, which means
        no acess to super. Pro rate the additional $400 dollars and I was swimming in an extra $15 per week.
        It is a wonder more people don’t neck themselves.

  5. $61.30 rent MOST people who get unemployed live in rental properties I was paying $150 per week rent for 1 room.
    Try living on the remainder $116.30 per week or $16.61 per day. The bus pass was $5 by itself.

    • However, given that we’re mostly considering single parents forced onto Newstart when their youngest turns eight, it’s fairly likely that they will have survived the waiting period (over 5 years in NT) and moved into public housing if they’ve been on Parenting Benefit since the child/children were very young. I realise that it’s much less likely that single Newstart recipients will be in public housing paying such low rents. For them the problem is even worse than for families in some ways.

      • The disincentive created by newstarts punitive treatment of supplementary income is a major problem, it needs looking at.

        The big difference between Newstart payments (and rules ) Vs single mum and Diso pensions has also created a lot distortions of behavior.

        I wonder how many realise just how much of the ‘survival diet‘ of long term welfare recipients these days comes down to community purpose church type groups- in the small town we live in the ecumenical care group distributes food parcels all the time.

  6. Pingback: Surviving on Pensions, Some Extra Thoughts | Forensics, Fossils and Fruitbats

  7. Thanks for the NT example, I live in Sydney and am working, but I do wonder how a single parent could survive on newstart. Would like to see a list of all benefits for newstart across states.

    So in nsw I think if you are in public housing the cost of rent is 25% of your income.

    Also pensioner concession card, seem to be available to single job seeks, including single parents, but if your a single parent going at tafe or uni do you lose it?

    Do newstart pensioner concession car holders also get cheaper rates, electricity, water and car rego?

    So in NSW does this mean, a $2.50 all day pubic transports, including private buses single parent on newstart?

  8. The requirements to be able to live on the dole, are a tent, kero stove, a tin mug, a saucepan, a bucket and access to a water souce, toiletries and access to a dunny and a free soup kitchen(optional). Also a cheap dry pitch. To relieve boredom share with a friend of the opposite sex and read library books on how to better oneself. But better still have parents who are stupid and who feed and clothe you.,
    K P.The last time I called on you was during the D Fute era about seven years ago.

  9. Apart from the lack of public housing in many states, as noted by others, do you really want children growing up in public housing? Off the top of my head, it’s hard to think of worse places for kids to grow up (not including the essentially separate places), so unless you want to cause long term social problems, I don’t think using it as a “I could live off this” marker is a great idea. I’d far rather see rent assistance increased drastically and single parents get into the private market.

  10. Apart from the lack of public housing in many states, as noted by others, do you really want children growing up in public housing?

    That depends on the quality of the public housing and the composition of the publicly housed population. Right now, after years of bi-partisan neglect of public housing construction and maintenance it looks like the crap option for everybody but it wasn’t ever thus – the decline in public housing followed a shift from an entitlement model (everyone is entitled to decent housing so the state will provide what the private market can’t or won’t) to a welfare model (the state will provide public housing for the seriously hard up).

    I’d far rather see rent assistance increased drastically and single parents get into the private market.

    So would I, if I owned any rental properties – I’d have plenty of prospective tenants bidding up the price of a lease and competing with each other to accept the most onerous terms and conditions to secure one. Landlord’s paradise!

    That’s pretty much the way it is now anyway, with government policy aimed at relieving the “housing affordability crisis” (i.e. the housing shortage working entirely on subsidising the demand side of the problem and steadfastly refusing to address the supply of housing. Hardly surprising, given all the players with a vested interest in maintaining the shortage.

  11. “i.e. the housing shortage”

    Supposedly there is an oversupply of apartments in Melbourne, so in some places that’s not a problem. Perhaps you could have different solutions in different places, rather than a one-size fits all solution as we have now, although it seems reasonable to suspect that the government building public housing to anything like the level needed such that it is not just a disaster is rather unlikely.

  12. Ken,

    the housing issue is difficult. You effectively want to mix the welfare recipients with the rest of the population by means of specifically subsidizing their accommodation, hoping this will get them to live amongst the rest and not create ghettos. Your problem is that the rest of the population might not be so keen to mix and has deeper pockets….
    So I am afraid you are into town planning territory if you want the populations to mix, for instance by building luxury homes in the middle of public housing estates such that there is someone to look up to in those areas. Tricky.

    • I think the only type of public accommodation where you can stop mixing you find mainly in Europe (Macquarie Fields would be an Aus example that I can think of), where you build public housing in way out places and don’t stick any transport in, or just get private companies to do the job, who will later refuse to go there due to the dangers involved. This hasn’t been a success in places like France, but works okay for a generation or two, and if you are lucky, the once way-out suburbs become ones that arn’t way out, in which case your problem of mixing is solved — most of the big public housing estates in Melbourne fit into this category, as do some of the Sydney ones. Alternatively, your problem of sticking the bottom 1% of the population all in the one place still remain.

      If you don’t have some plan like this, mixing will simply come like it does in the US, where there are homeless people etc. everywhere. This isn’t a great solution either, so there are really no solutions everyone will like, and doing essentially nothing, as is the case now, produces its own annoyances.

      • I think the point both Gummo and I are making is that public housing should NOT be seen as being only for “the bottom 1% of the population”.

    • Hi Paul

      I have’t advocated subsidising private rents for precisely the sorts of reasons you mention. It was Conrad who raised the suggestion on this thread.

      I advocated building more public housing as a desirable way to ameliorate the housing shortage and high rents in Darwin, and that may well be a useful strategy in other places too. As I read Gummo/Paul’s comment, his position seems similar. I don’t see why providing much more public housing should be a “disaster” as Conrad seems to think.

      • The reason you don’t want large public housing estates, and the reason they have bulldozed some of them in the US, is that you get worse-get-worse effects for crime, education, mental health etc. . There is a reasonable literature on this as far as I’m aware (a quick google search certainly supports this). There are exceptions to this such as public housing set up for the aged and those who are dying, both which will be growing groups. My bet is that the Fairfield (?) public housing block in Melbourne doesn’t have this problem because those are the groups in there.

        Also, if you’re saying that public housing shouldn’t be restricted to 1% (which seems fair enough to me), you need to suggest the percentage you think it should be available for, and preferably the percentage where you don’t get these worse-get-worse effects. At least in HK, there is no evidence for these as far as I’m aware, but you have 40% or so of the population living in it, but obviously no government is going to build housing for millions of people.

      • Thanks for clearing that up. The usual problem with public housing is that one often ends up building ghettos. And you can see how bureaucratic logic would get you there for where is land cheapest and what type of estate would appear best value for money to a committee?
        Has consciously planning a mixed community with cheap and luxury houses side by side been tried in Australia?

        • A fair chunk of Victoria’s public housing (and some of Sydney’s) is essentially mixed, since you basically have huge ugly blocks living in otherwise very expensive suburbs (e.g., Prahran, Fitzroy). The Department of Housing also owns apartments in otherwise privately held blocks. I don’t know of any real data looking at whether this works better than the monolithic blocks (it’s hard to see how it couldn’t), but anecdotally, it’s a PIA for the residents, and basically stuffs their lives up, since, not surprisingly, it’s almost impossible for body corporates to do anything when something goes wrong, which is rather likely given who gets put in those blocks (one of the ones I knew about, the residents hammered planks of wood over the front door they were so frustrated). I think the occasional blog commentator Mel can give you similar stories from personal experience. What the real quantitative data looks like, who knows.

  13. I know very little about public housing in Sydney, where I live, but was surprised that there are 54 unit in Mosman and 2 places at Pittwater.

    Link to list for NSW, with a total 120,053 as of 2010.
    http://www.housing.nsw.gov.au/About+Us/Housing+NSW+Open+Access+Information/Number+of+Public+Housing+Residential+Dwellings+in+Local+Government+Areas+as+at+30+June+2010.htm

    Off topic – I walk across the Sydney harbour bridge pass these two places, would like to move into the one at the rocks with a roof top garden, views to Allan Jones place in the toaster and Opera House.

    Photo of Rocks units
    https://picasaweb.google.com/lh/photo/SGrfr00tw39_l3jmKjs58g

    Photo of Greenway flats Milsons Point/Kirribilli, next to harbour bridge, north side.
    http://www.skyscrapercity.com/showpost.php?p=28440614&postcount=163

    • The Rocks one created controversy when it was built – basically on the grounds that it’s far too good for the riff-raff. You might note it is full of old people – that’s because the only ones who got put in it were those displaced by the clearance of the original Rocks slum (yes, the same one that was the focus of the 1900 bubonic plague epidemic).

      That’s the dilemma. From a “get as many people into decent affordable housing as we can” view it was a disaster – handing the site over to CBD developers instead would have generated enough money to solve a lot of housing-stress induced poverty elsewhere. From a “lets not create social apartheid” view it was the right thing to do.

  14. Hmmm couple of things are missing from the OP

    - The parent moving from PP to NSA will also be receiving Rent Assistance of up $121 a fortnight in the hypothetical provided this would cover the complete cost of public housing rent meaning they would have ~$60 a week to pay for clothing, medical, leisure, etc expenses (medical expenses will also be heavily subsidised via medicare and pensioner card discounts).

    - NATSEM studied living expenses and NSA last year (http://bit.ly/RrccpM) and found that after housing, utilities and food unemployed households have $154/wk in disposable income.

    - Back in 2008 when analysing the 2006 changes DEEWR found that they increased the rates of recipients leaving welfare within six-months by about 150% (http://bit.ly/W5ne46)

    And as a bit of a plug, I blogged about this and some related issues in a bit of detail yesterday http://bit.ly/Y8BvlU

    • Yes, as David just observed, and as the Dept Human Services website also notes:

      If you pay your rent directly to a state or territory housing authority, it is unlikely you would be able to get Rent Assistance.

      Rent assistance is essentially to provide some partial relief for unemployed people in the private rental market where they will typically be paying much more than extremely concessional public housing rents (which are typically fixed at 23-25% of the benefit recipient’s income). An extra $121 per fortnight in Rent Assistance is unlikely to make more than a marginal difference to someone paying (say) $300 per week for a 2 bedroom flat in the private rental market compared with $65 or $70 for the few fortunate enough to be in public housing. As others have pointed out in this thread, the position of Newstart recipients in the private rental market is MUCH worse than the paradigm recipient I sketched in the primary post, even taking into account Rent Assistance.

      Thanks for the link to the NATSEM study. It is very helpful.

      • Yeah, I missed that note on RA eligibility.

        Though having said that it occurs that the single parents moving onto NSA will also be collecting Family Tax Benefit A and B from DHS and may be receiving child support. The wide range of circumstances make the ‘example budgets’ relatively fraught territory which is why I prefer things like the NATSEM study.

        • Yes, and if they’re getting child support their payments will be reduced by 50c in the dollar anyway. Child support payments to candidates for public housing are generally small anyway because ex-partners of long-term welfare recipients are often poor themselves.

          FTB you get whether you’re on PPS, NSA or working – it depends on your income, not your payment type***. Dave’s calculations, like the NATSEM ones, already include FTB (and much else beside) where applicable. And knowing both parties Dave is at least as likely to be accurate.

          *** Yea, yea Dave – I know about automax. But the statement is close enough to true for this purpose.

  15. It’s worth noting that if you’ve got a mortgage you don’t qualify for rent assistance either so, if you stay on Newstart for too long, you’re likely to end up living in your car desperately seeking a private rental.

  16. It can be done two ways. Either by living by the skin of your teeth, no phone, no internet, no insurance, no car etc. Or, like many, many people do, other, more, um ehem imaginative ways. Ebay is a great source for extra income, and until you make $20, 000 Ebay won’t alert Centrelink (which is nice even if it is none of their business.) Buying and selling locally. Working cash in hand (I know a town where 8 of the 10 food outlets ONLY pay their staff cash in hand and advise them to tell Centrelink that they volunteer there if they are caught, one of those businesses is right next to the HUGE Centrelink office.). The biggest problem is dealing with the parasites at the Job Network agencies, or whatever they call themselves now. It’s hard to turn up for your $10 an hour cash in hand job slinging hash when St Laurence demands you turn up so they can fulfil their requirements and get paid by the gov. Most people I know on the dole, in particular single mothers, see it as a sort of guaranteed minimum allowance from the gov to keep you going and beyond that it’s up to you. Oh yes there are, no doubt many people who do suffer under the petty whims of Centrelink, the agencies and the joke that is Newstart, but after a while of putting up with their cr@p it’s amazing how fast any guilt about rorting the system goes out the window.

    • Job Network is now known as Job Services Australia (it is pretty much identical though, thank the ALP’s first-term interest in re-branding for that).

      The ‘attendance’ requirements for job seekers is actually very low, typically one appointment a month and completing activities on their Employment Pathway Plan (EPP, formerlly Participation Agreement iirc) like ‘apply for X jobs’, ‘attend Y training’ or ‘attend Z work experience’.

      The policy challenge for DEEWR is overcoming EMTRs and avoiding making welfare too ‘work like’ because their research shows that actually discourages people from leaving welfare.

  17. I’ve been forced onto newstart since getting a spinal chord injury and suffering a fairly high level of disability. I am not required to seek work but am apparently not eligable for the higher disability payment. My doctor says this is to save the government money. My mental health is being severely affected by the poverty and the feeling that our society cares more about money than peoples wellbeing. I often regret having the surgery that saved my life. I don’t think the government is being realistic. I wonder what the cost to the mental health budget is and is it really worth the damage it does to people and therefore society as a whole.

  18. Life is not much easier for full time uni students struggling on austudy. Unlike newstart though, austudy recipients cannot access their superannuation in times of hardship.because austudy is not considered income support but study assistance. I have classmates who are considering leaving uni due to the difficulty of surviving on austudy while trying to succeed at their chosen vocations. The only way to break the poverty cycle in Australia is to create more employment (full time) …something every politician promises…and never do. ..

    • University students though are typically middle-class, receiving a subsidised education and will have higher lifetime earnings as a result of their degree(s). I struggle to feel particularly bad for them.

      It is also worth noting though that an increase in full time employment isn’t going to be particularly useful for a group of people who are presumably seeking fewer and more flexible hours so they can fit it around study. They are in other words likely to have benefited from an increasingly casualised workforce.

  19. That is not always the case. I am not middle class. I live in Nerang on the Gold Coast, it is considered one of the poorer and rougher suburbs on the Gold Coast. Additionally many of my classmates are single mothers. I am not too sure what you mean by subsidized… unless you mean HECS??? When I am finished I will be more than fifty thousands dollars in debt…Remember..University use to be free..

  20. Sorry to drag up an old thread, but I wish you had used average cost of housing in Sydney rather than Darwin public housing

    NSW rents on tab 2 of this NSW government housing report.

    Me single male IT pro 50 years old – Hundreds of job applications and not even a call back.

    Dole + Rent relief $310 – rent $240 one bedroom behind a shop in Lakemba – that’s Sydney’s low cost immigrant landing suburb for the un-enlightened – electricity $30pw internet $20pw that makes $290 leaving me with $20pw. I rely on salvos and vinnies handouts for food. My cloths are rags that I cant afford to replace – and I still have to jump through the stupid hoops of the Job network.

    I cant afford to hire a truck to move – cant afford to renew my license – so even if I had a car couldn’t use it to find somewhere cheaper. In any case there isn’t anywhere for around $150 pw because “student accommodation” mainly for foreign students has base-lined the rents anywhere within 50 miles of a university at $150 a week for a room.

    And according to the centerlink moving away from work is a problem – I do IT so need to be near Sydney or Melbourne if I ever want to get work again.

    So I am stuck – cant move – can’t get help – cant afford to live oh yes – have just filled in the bankruptcy paperwork.

    Am learning to hate this government – both sides of it with a passion.

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