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The need to be online is blowing a hole in budgets of the poor: Better infrastructure and income support needed

By Dr Greg Ogle, Senior Policy Officer, SACOSS
This week is both Anti-Poverty Week and Get Online Week in Australia, so it’s a good time to ask how anyone can get by spending just $12 a week on telecommunications. 

There’s no doubt telecommunications are essential in an age where government services, businesses, employment and education are all online, and much of our contact with friends and family rely on social media and digital communications. Recent SACOSS research shows that the average SA household spends $46 on telecommunications each week, equivalent to 3.2% of their disposable income. That was more than was spent by the average household on energy.

However, for a single person looking for work and reliant on the Newstart allowance, 3.2% of income amounts to just $12 per week. That may get a bottom-end mobile phone plan with very little call value and almost no data, or a home connection but no mobile. Yet the government’s “digital first” strategy insists job-seekers go online to deal with Centrelink and access payments. And employers and job agencies require them to have a phone to be contacted. 
For many people employment is a key point of social contact and engagement – so the last thing we want is for those who don’t have this work connection to be unable to afford to maintain contacts with friends, community and culture.
Those on the lowest incomes spend proportionately much more of their income on essential telecommunications – the average for those on social security is a $21 spend. They are also getting less value for money than the average consumer. 
SACOSS research shows that two-thirds of low-income households rated telecommunications as one of the five biggest impacts on the household budget. 
We need both telecommunication and income responses to this problem. We need more public infrastructure to support free internet access and better market plans for those on low incomes. We also need more generous income support. For instance, if Newstart was increased by $75 a week, then the $21 a week telecommunication expenditure would go from being 7.6% to 6.0% of weekly income – still almost double the average household, but a bit more manageable.
The alternative is to see a digital divide growing larger and to condemn a group of people to increasing social isolation and a massively reduced ability to obtain work, income and support services. That is surely not good enough in a prosperous country in the 21st century.

Published Date: 
Monday, 15 October 2018