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Huge SA income boost of $288M if Newstart raised, says Deloitte

Report shows raising Newstart & Youth Allowance will boost jobs, state taxes

South Australia’s total disposable income would increase by $288 million if the Federal Government raised Newstart, Youth Allowance and related payments by $75 per week. 

This is according to a report by Deloitte Access Economics, released today by The Australian Council of Social Service (ACOSS), with support from SACOSS and the state and and territory councils of social service.

According to Dr Cassandra Goldie, CEO of ACOSS, “The report finds that increasing these payments will boost wellbeing in regional communities doing it the toughest, lifting the incomes of people most in need, as well as delivering 12,000 new jobs."

"The message from the economists at Deloitte is clear: lifting Newstart and reducing poverty and inequality is resoundingly good for the economy.” 

“The injection of millions of dollars into regional communities will create new jobs, lift wages and profits as well as increase the incomes of people in the lowest 5%, reducing inequality.

Quotes attributable to SACOSS CEO Ross Womersley:

"This report demonstrates that increasing Newstart and Youth Allowance would have a huge impact for recipients, for communities in terms of jobs and spending, and across South Australia more generally."

(for SA-specific data, please refer to Deloitte's SA briefing paper).

 “Every dollar invested in raising Newstart and Youth Allowance would have a tightly targeted fairness impact with by far the greatest boost in disposable incomes going to South Australia’s lowest income households.”

“Around 8% of working-age people in SA receive an unemployment or student payment.”

“Increasing payments will lead to greater spending on locally produced goods and services. It will mean higher takings in local communities, with a boost to local wages and jobs.”

“For example, the Deloitte modelling shows an increased spending of: $37 million dollars per year in the Salisbury Council area, an extra $31 million in Onkaparinga, $28 million in Playford and $26 million in Port Adelaide Enfield.”

(for definitions and more on SA LGAs and specific data, please refer to Deloitte's SA briefing paper).

Some more key facts     

The direct cost to the Federal Budget would be about $3.3 Billion per year.

The table below is a summary of the economic impact of a $75pw increase to single rates of Newstart, Youth Allowance and related payments 

Other quotes attributable to Dr Cassandra Goldie

“People looking for paid work are really struggling to afford basic essentials like a roof over their head and three meals a day on Newstart Allowance, which is less than $40 per day.”

“Newstart has not increased in real terms since 1994. The payment is now so low people are struggling to feed themselves.” 

“More than two thirds of people support an increase to Newstart, as do all the leading charities, community organisations, the Committee for Economic Development, Deloitte Access Economics, KPMG, Australian Industry Group, and the Business Council of Australia. Benjamin Law, Jane Caro, John Howard, Ken Henry all back an increase, as do the Greens, Senators Tim Storer and Derryn Hinch, and the ACT Chief Minister Andrew Barr. There are now 14 Local Councils supporting an increase to Newstart, and the National Assembly of Local Government also passed a motion of support.”

Further quote attributable to Ross Womersley

“We call on all Federal Politicians to do what is right for equality and our regional economies, and increase Newstart and Youth Allowance by $75 per week as a matter of urgency. Not only is it the right thing to do for social justice, it will provide the much-needed economic boost in metro, rural and regional South Australia.”

"Deloitte's modelling shows that raising the rate by $75 would result in as many as 12,000 new jobs. Proportionally, South Australia could expect to see more than 700 news jobs in our economy."

Published Date: 
Monday, 17 September 2018