Newstart Australia Program - Literature review Example

How can you survive on Newstart?” Rachel Siewert The article, “How can you survive on Newstart?” by Rachel Siewert discusses the Newstart Australia Program, an unemployment benefit program by the Government designed to provide financial help for unemployed Australians. The Newstart Program, commonly referred to as the dole, aims to provide financial help for over 500, 000 unemployed persons in Australia while they search for employment or provides financial support as they undertake activities which would increase their employment prospects such as training and studying (DHS 2012). The main policy issue being discussed in the article is whether the current levels of the Newstart allowances are adequate in providing support for the unemployed and whether they should be increased in order to enhance the effectiveness of the program (Siewert 2012). The article provides a brief background of some of the policy considerations behind the Newstart Program. It points out that the program was deliberately designed to provide incentives for unemployed Australians eligible for the Newstart allowances (commonly referred to as the dole) to find employment by making payments contingent on doing activities under an employment pathway plan which would increase employment prospects such as applying for jobs, skills training or volunteering or by participating in a labour market program. It was not designed to provide assistance for the long term unemployed or those out of work for extended periods. The program is also deliberately designed to maintain a substantial gap between the income available to the employed and the income of the unemployed (through the dole and other welfare payments) as a policy meant to discourage or act as a disincentive for overreliance on the allowance by the unemployed and to motivate them to seek and hold on to employment (Siewert ,2012; ACOSS,2012). In essence, the program provides a safety net from “grinding poverty” which would adversely affect any employment prospects of the unemployed but not enough for them to become comfortable and not seek employment (Siewert, 2012; DHS, 2012) The author presents the policy issue, the adequacy of the Newstart allowances, by evaluating the benefits and costs of increasing the allowances or maintaining them at their current levels. The article highlights some of the challenges faced by recipients of the allowances and the disparity between what is considered to be an inadequate and “heartless” level of the allowances as compared to other forms of unemployment support such as the Disability Support Pension (DSP). The gap between the DSP and the Newstart weekly payment is $130. The article also highlights some of the challenges faced by the unemployed such as the lengthy waiting times before they are able to receive their cash payments under the program and government policy to withhold cash hand-outs from them in 2008 and 2009 with the rationale of boosting spending by giving out cash to people under DSP. In consideration of all these challenges, the article questions whether the Newstart allowances have achieved the objective of providing support for the unemployed while they seek employment or whether it has simply made the process of seeking employment much more complicated (Siewert, 2012; ACOSS 2012). The policy issue has been widely discussed by various advocacy groups such as the Australian Council of Social Service (ACOSS), the Business Council of Australia, Catholic Social Services Australia, public opinion and even federal government commissions have highlighted some of the deficiencies of the Newstart Program, pointing out that the increasing inequality between Newstart allowances and average income levels, other forms of income support offered to working age Australians or welfare payments has resulted in the program becoming a poverty trap for the unemployed (ACOSS, 2012; AAP General News Wire, 2012; Grahame and Marston ,2012). These advocacy groups and recipients of the allowances themselves have pointed out that the allowances are too meager to support a decent living which is compounded by the rising cost of living and no intention to increase them by government (Bita, 2012). This only exacerbates the marginalization and stigmatization of their recipients, forcing them into poverty and housing distress and further reducing their chances of seeking long term and stable employment (Bita 2012; Siewert, 2012). The arguments in the article are presented with the implicit assumptions that the reader will readily identify with the rationale presented and drive to the same conclusion. The author presupposes for the reader that the Newstart allowances are clearly inadequate and even “heartless” and rhetorically suggests that Federal government policy has actually exacerbated the problems facing the unemployed. She buttresses her argument for indexing the Newstart allowances against the wage movements using a combination of macroeconomic logic and common sense by arguing that while the policy rationale behind the Newstart program was to create a deliberate disincentive for overreliance on the allowance and an incentive to seek employment, the current levels of allowances could actually compromise the very goal the program set out to achieve. This is a fairly self-evident argument which has nonetheless been supported by other commentators who have similarly concluded that low levels of the Newstart allowance have actually acted as a disincentive for seeking long-term employment by resulting in marginalisation and stigmatisation of the unemployed and that they continue to increase the risk of entrenching poverty among the unemployed in Australia. The situation has also been exacerbated by the rising cost of living in Australia which lends credibility to the author’s argument that the allowances should be indexed to the wage movements. The Newstart allowance is therefore an important socio-economic program in shielding a significant part of the Australian prospective labour force from poverty as they search for suitable employment. The allowances enable them to confidently apply for jobs or acquire new skills without the threat of descending into poverty. The article cites several authorities to justify the policy prescriptions being advocated for. The author cites as evidence the recommendation by the Australian Council of Social Services (ACOSS) that Newstart allowances be increased to $50 a week and the Henry Tax Review which recommends that allowances be segmented according to those who can participate and those who cannot (Siewert, 2012; ACOSS, 2012). The article provides several policy prescriptions to address the issue at hand. First, it suggests that Newstart allowances should be increased to cushion its recipients from poverty and also that the allowances should be further segmented according to people who can participate in the various activities under employment pathway plans to increase employment prospects such as applying for jobs, skills training or volunteering or by participating in a labour market program. The recommendation to segment the allowance or allow variations in the levels is based on the argument that different groups of recipients have different needs at different times and that living on Newstart allowances similarly has different impacts on different groups of recipients (Siewert, 2012). The principle social work value highlighted by the article is providing equitable access to opportunities for disadvantaged people. As indicated, the Newstart program’s primary objective is to safeguard people who are temporarily unemployed- a permanent feature of any economy- from poverty and to enable them to re-enter the workforce. In essence, the social safety net helps people remain employable. Unemployment, both temporary and long term, is a disadvantage in itself. Labourers who have not been earning wages often become homeless or resort to seeking low cost housing in low income areas, cannot feed themselves and would be less decent when presenting themselves for interviews. Therefore, while it is an important policy component to maintain a gap between minimum wage or other forms of unemployment benefits and the Newstart allowance, the allowance needs to be adequate to act as a barrier to unemployment and not as an impediment to employment (Siewert, 2012). The article also addresses federal government policy towards unemployment and the impact policy choices have on the disadvantaged. As Siewert demonstrates, the federal government decision to withhold cash handouts in 2008 and 2009 with a view of stimulating the economy by giving money to other recipients may have had an adverse effect on people on Newstart who were already financially constrained. There are several policy alternatives to increasing the Newstart allowance which the article briefly mentions that can significantly help in achieving a similar policy outcome- equitable access to opportunities. As Siewert (2012) argues, government policy needs to focus on the impediments that exist both in terms of the skills and capability of the jobless and the incentives for employers to offer jobs. Government policy can help resolve some of the root causes of unemployment in alternative ways besides the Newstart allowance such as fiscal policies which focus on lowering the cost of living by addressing the cost of food and housing. Such policies can be equally effective in a two pronged approach which considers both the pull and push factors of unemployment. Another issue to consider in helping the unemployed become employable is the minimum wage. Employers are reluctant to employ due to what are considered high wage demands. This can jointly be resolved by addressing the high cost of living which would subsequently reduce pressure on wage demands as more people would be able to live decently on less. The policy issue and prescriptions presented in the article also reflect some of the challenges faced by social workers working with disadvantaged people. For disadvantaged groups such as the disabled and elderly who cannot secure employment, the Newstart allowances are a critical lifeline. Therefore, raising the level of the Newstart allowance is an important policy issue for most people from disadvantaged backgrounds (Siewert 2012). References AAP General News Wire (2012)‘NSW: Newstart programs slammed by Howe’, 9News.Retrieved on 4 April 2013 from Australian Council of Social Service (ACOSS) 2012, ‘Newstart comparisons ‘misleading’’, Retrieved on 4 April 2013 from Bita, N 2012, ‘Inflation rate not a patch on cost of living’, The Australian, Retrieved on 4 April 2013 from Department of Human Services (DHS) (2012). Newstart Allowance. Retrieved on 4 April, 2013 from Grahame, T & Marston, G. (2012). ‘Welfare-to-work Policies and the Experience of Employed Single Mothers on Income Support in Australia: Where are the Benefits?’ Australian Social Work 6(1), 73-86. Siewert, R.(2012). “How can you survive on Newstart?” Retrieved on 4 April, 2013 from Read More

The policy issue has been widely discussed by various advocacy groups such as the Australian Council of Social Service (ACOSS), the Business Council of Australia, Catholic Social Services Australia, public opinion and even federal government commissions have highlighted some of the deficiencies of the Newstart Program, pointing out that the increasing inequality between Newstart allowances and average income levels, other forms of income support offered to working age Australians or welfare payments has resulted in the program becoming a poverty trap for the unemployed (ACOSS, 2012; AAP General News Wire, 2012; Grahame and Marston ,2012).

These advocacy groups and recipients of the allowances themselves have pointed out that the allowances are too meager to support a decent living which is compounded by the rising cost of living and no intention to increase them by government (Bita, 2012). This only exacerbates the marginalization and stigmatization of their recipients, forcing them into poverty and housing distress and further reducing their chances of seeking long term and stable employment (Bita 2012; Siewert, 2012). The arguments in the article are presented with the implicit assumptions that the reader will readily identify with the rationale presented and drive to the same conclusion.

The author presupposes for the reader that the Newstart allowances are clearly inadequate and even “heartless” and rhetorically suggests that Federal government policy has actually exacerbated the problems facing the unemployed. She buttresses her argument for indexing the Newstart allowances against the wage movements using a combination of macroeconomic logic and common sense by arguing that while the policy rationale behind the Newstart program was to create a deliberate disincentive for overreliance on the allowance and an incentive to seek employment, the current levels of allowances could actually compromise the very goal the program set out to achieve.

This is a fairly self-evident argument which has nonetheless been supported by other commentators who have similarly concluded that low levels of the Newstart allowance have actually acted as a disincentive for seeking long-term employment by resulting in marginalisation and stigmatisation of the unemployed and that they continue to increase the risk of entrenching poverty among the unemployed in Australia. The situation has also been exacerbated by the rising cost of living in Australia which lends credibility to the author’s argument that the allowances should be indexed to the wage movements.

The Newstart allowance is therefore an important socio-economic program in shielding a significant part of the Australian prospective labour force from poverty as they search for suitable employment. The allowances enable them to confidently apply for jobs or acquire new skills without the threat of descending into poverty. The article cites several authorities to justify the policy prescriptions being advocated for. The author cites as evidence the recommendation by the Australian Council of Social Services (ACOSS) that Newstart allowances be increased to $50 a week and the Henry Tax Review which recommends that allowances be segmented according to those who can participate and those who cannot (Siewert, 2012; ACOSS, 2012).

The article provides several policy prescriptions to address the issue at hand. First, it suggests that Newstart allowances should be increased to cushion its recipients from poverty and also that the allowances should be further segmented according to people who can participate in the various activities under employment pathway plans to increase employment prospects such as applying for jobs, skills training or volunteering or by participating in a labour market program. The recommendation to segment the allowance or allow variations in the levels is based on the argument that different groups of recipients have different needs at different times and that living on Newstart allowances similarly has different impacts on different groups of recipients (Siewert, 2012).

Read More