Claims that welfare boost is 'unaffordable' don't stack up

Claims that welfare boost is 'unaffordable' don't stack up

Media Release
Income Support

Dismissing welfare payment increases on the basis that they are unaffordable and would fuel inflation lacks economic sense and is a heartless response to the many Australians living at or below the poverty line.

Responding to claims that Australia has limited capacity to tackle cost-of-living impacts, the National President of St Vincent de Paul Society, Mark Gaetani, said, ’While the Albanese Government acknowledges that many households are struggling, the time to take appropriate action is now, not in a few months’ time when the Budget is handed down.

‘Phone calls from people seeking our assistance have risen alarmingly across Australia, by nearly 40 per cent in some places. Requests for emergency relief are also hitting highs, and not just in flood disaster zones.

‘In this environment, claims that increases to welfare payments for 3.3 million men, women and children are unaffordable displays a complete lack of respect for those living in poverty.

‘Moreover, it is a fallacy to say nothing can be done because increasing crucial supports like JobSeeker would only contribute to inflation and make matters worse. In a wealthy country this is completely unacceptable.’

Mr Gaetani said vulnerable groups being assisted by the Society included people experiencing homelessness, social housing residents, people seeking asylum, Indigenous communities, women affected by family violence, and older adults. All of these and more are disproportionately affected by the cost of living and housing crises.  

‘Various fallacies seek to explain why such people are not being helped to attain basic security of housing, food and other essentials. The biggest is that the economy can’t afford to provide proper levels of welfare. This is simply not true, as was explained in the research paper the Society commissioned from the Australian National University.

A Fairer Tax and Welfare System for Australia shows, for example, how up to 834,000 vulnerable people could be lifted out of poverty by the Australian Government’s adopting one of three affordable reform options.  

St Vincent de Paul Society wants JobSeeker to be increased by 50 per cent, to around $1,100 per fortnight. It’s currently $753. This would be equivalent to the Age Pension and at a level recommended by the Government’s high-level Economic Inclusion Advisory Committee. Unlike pensions, income support payments are only indexed (biannually) via the CPI. In real terms, this means people actually go backwards.

‘We also advocate Parenting Payment be increased to $1,340, Youth Allowance to $887, Commonwealth Rent Assistance by 25 per cent, DSP and Carers payments (by $249 per fortnight, and Family Tax Benefit (Pt A) by 20 per cent.’ 

Mr Gaetani said another fallacy is that enhanced support to low-income earners would fuel inflation and so contribute to even higher prices.

‘This seems to hint that the less well-off, whose purchases are mostly low-cost essentials of life, are the main cause of inflation, rather than those who buy highly priced real estate, luxury goods or costly travel.

‘Helping people to better afford essentials comes at less cost to government than the planned Stage three tax cuts, which many analysts predict are more likely to add to inflationary pressures. The reality is that Australia can afford to do much more to help people in tough circumstances. We should not try to shirk our responsibilities through arguments that lack economic or moral weight.’

The St Vincent de Paul Society in Australia consists of 45,000 members and volunteers who operate on the ground through over 1,000 groups located in local communities across the country.


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