4 May 2012

The Hon Julia Gillard MP Prime Minister of Australia House of Representatives CANBERRA ACT 2600

Dear Prime Minister Thank you for the meeting on 6 March 2012 and the opportunity to discuss a number of issues of shared interest between ACOSS and the Australian Government. Today, I am writing in the final days before the Federal Budget to urge you again to make a commitment to address the inadequacy of the Newstart and other allowances. I also urge you not to proceed with payment cuts to about 100,000 parents living on income support whilst looking for paid work. ACOSS believes there are key areas of spending that should be a national priority whilst returning the Budget to surplus. In addition to our shared priority of establishing the National Disability Insurance Scheme and improving aged care, we strongly believe that increasing the rate of allowances such as the Newstart (now $35 a day) and Youth Allowance (now $28 a day), and strengthening employment assistance for long term unemployed people is urgent if we are to tackle poverty in Australia and deliver on a strong participation agenda. Our call to increase Newstart and other allowances has broad support from a number of key organisations, including the Australian Council of Trade Unions; Business Council of Australia; Australian Industry Group; Henry Tax Panel; key economists and the OECD. Newstart is now the lowest of any OECD unemployment payment, and is widely recognised as a barrier to employment. As importantly, there is wide support across the Australian community. Over 100 organisations have signed their support for this increase. I attach our supporting statement and the schedule of supporters (Attachment A). Public support is also demonstrated by the fact that Australians support an $84 increase to the Newstart Allowance, more than the $50 we propose (The Australia Institute, 23 April 2012). By failing to increase these allowances, we are forcing into poverty young people trying to get a break; parents trying to get paid work whilst looking after their children; older workers struggling to get back into the workforce and people with disability aspiring to be employed. Overall, more than 60% of people have been living on this paltry allowance for over a year and already face significant barriers to employment.

LockedBag4777StrawberryHillsNSW2012Ph(02)93106200Fax(02)93104822info@acoss.org.auwww.acoss.org.au ABN72757927533

The 2012 Federal Budget is the right time for increasing these allowances. An increase in these payments together with better employment assistance would significantly improve employment participation and alleviate poverty. The suggestion in todays media that, instead of increasing Newstart, you plan to transfer a further 100,000 sole parents onto it is deeply disturbing. This proposed cut of up to $60 per week will do nothing to improve peoples job prospects. These parents are already required to seek part-time employment. Instead, it will increase their barriers to employment. It will only make these families poorer, which means they are less able to have the stability and resources they need to help them find a paid job. The OECD found last year that two thirds of Australian children in these kinds of families are already living in poverty. Again, I urge you not to proceed with this cut in payments to some of our most vulnerable families. ACOSS has supported your Governments commitment to a surplus for good reasons. However, a surplus is not an end in itself; nor should it be done at any cost. We have identified $8 Billion in savings that you could make in order to return to surplus as well as make the system fairer and still leave room to fund these national policy priorities. Our report, Waste not, want not: Making room in the Budget for essential services, which was released last week, clearly outlines these savings. I hope that we can welcome a commitment from the Australian Government to address the inadequacy of the allowances on Budget night in 2012, rather than condemning that a further 100,000 families and their children will be expected to survive on it. The last Government to increase the allowances was the Keating Labor Government in 1994. An increase is long overdue, and now urgent. Yours sincerely

Cassandra Goldie Chief Executive Officer Australian Council of Social Service

T: +61 2 9310 9203 M: 0459 400 440 E: cassandra.goldie@acoss.org.au

LockedBag4777StrawberryHillsNSW2012Ph(02)93106200Fax(02)93104822info@acoss.org.auwww.acoss.org.au ABN72757927533