Cutting energy allowance will push 76,000 Australians to the brink of homelessness

The Federal Government is threatening to cut the energy supplement from Centrelink allowances, as the  it looks for ways to save money in the next budget. For someone on a Newstart benefit, this equates to a $4.40 week cut. For people already on the knife edge of homelessness, a $4.40 cut is precious money they can’t afford to lose.

Unsurprisingly, welfare groups around the country have been calling on Prime Minister Malcolm Turnbull and opposition leader Bill Shorten to keep the small payment.

Taking the payment away pushes our most vulnerable people closer to the brink of homelessness. Senate Estimates papers show that 1-in-4 Newstart recipients (76,951 Australians) are in severe rental stress (defined as paying more than 50% of income on rent), and that the number is rising every year. The number of Newstart recipients paying more than 50% of their income on rent has more than doubled in the last 15 years from 32,500 to 76,900.

For those 76,000 Australians who are forced to spend half their Newstart allowance on rent, taking away the $4.40 allowance will mean they are living on less than $24/day after they have paid rent. Aside from the serious moral issues associated with making people live so far below the poverty line, it is also an economic falsity. People looking for work need money for the costs associated with job hunting, for example transport to get to interviews, appropriate clothing, food and of course internet connections to search for jobs. If the Federal Government is serious about jobs and growth, why make it harder for people who need to work, to find it?

Median rents in Melbourne recently hit $400/week, with DHS rent data showing that just 6% of all Melbourne rentals would be affordable to someone on a low income.

Forcing people into homelessness to repair the budget doesn’t make sense, as there are huge costs associated with supporting people experiencing homelessness. 

The Council to Homeless Persons calls on the Federal Government to keep the allowance, and to give everyone the best chance they can to maintain their housing and find employment if they wish. The infographic below sets out the economic difficulties faced by those living on Newstart.

infographic newstart cuts 2