Indexation is no increase: Rishworth must stop misleading people about Centrelink payments

Labor again copies the Coalition’s disingenuous approach of announcing behind-inflation welfare changes as an “increase”

The Antipoverty Centre calls on the government to stop promoting legislated six-monthly indexation as an “increase” to Centrelink payments.

Today social services minister Amanda Rishworth has again drawn attention to inadequate indexation, claiming it provides “cost of living relief”.

We request that the media not indulge the minister by repeating her misleading statements.

The real story is that the JobSeeker is nearly half the poverty line, and Youth Allowance is less than half the poverty line. There are no working age Centrelink payments above the Henderson poverty line – the least bad measure of poverty we have.

We don’t need indexation that maintains this status quo, we need all payments to be at least the poverty line, which is currently $88 a day. But this indexation doesn’t even keep us in step with our actual cost of living increases.

Welfare payment indexation is linked to the Consumer Price index, which was 7.8% in the December quarter. But “non-discretionary” inflation is currently 8.4%. Even that doesn’t reflect reality because it includes so many items we simply go without because we cannot afford them.

Inflation does not capture that living in poverty is more expensive because we are generally forced to buy smaller quantities with higher unit prices.

Another flaw in the ABS’s measure is rent price inflation, which ignores the disproportionately higher costs borne by low income tenants. For example, the ABS puts rent inflation at 3.3% in Sydney for the year to December 2022. However, rents in the Greater Sydney area have increased by 10% above inflation based on bonds lodgement data published by the NSW Tenants’ Union. Many tenants are suffering eye-watering increases that are not captured in this data because no new bond has been lodged.

Enough about indexation. Crowing about it is a slap in the face.

We need a more sophisticated measure of poverty to capture the real living cost increases hurting people on the lowest incomes. But there is no time to delay payment increases with millions of people relying on payments that leave us in deep poverty.

The government has only one moral choice: Raise all Centrelink payments to at least the Henderson poverty line, and do it immediately, as 2020 showed is possible.

Media contact: email media at antipovertycentre.org or call/message 0413 261 362 via Signal

Community support for JobSeeker increase

• An August 2019 Essential poll found 84% believed that no one in Australia should go without essentials like food, healthcare and power. Only 30% believed it would be better to spend money on services instead of increasing unemployment payments.
• A May 2020 Essential poll found 57% support for JobSeeker being at least as high as the age pension, including 51% of Coalition voters.
• An Ipsos poll released in August 2021 found 77% of people supported a liveable income guarantee above the poverty line.
• A November 2021 Ipsos poll found 65–74% support for JobSeeker payments to be above the poverty line in Liberal-held marginal electorates. The electorates polled were Boothby, Swan, Longman, Blair and Dobell. Between 49% and 60% of voters in the five seats said they would consider changing their vote to a party that would lift the rate above $69 a day.