It is not every day business leaders and welfare groups line up to give the government the same message, but before the budget they were in lock-step on a key point – that the dole should be increased.
The Turnbull government's response was to cut it.
Anyone who signs up for for welfare from September 20 will get less than those already on it, creating a two-tiered payments system.
It is not just bleeding hearts arguing for a raise. The Business Council argues the Newstart Allowance is so low it may be bad for the economy as it prevents people finding work and risks entrenching poverty. KPMG says it makes it hard for people to present themselves for jobs.
The rationale for the cut – which, on today's rates, would make the base payment less than $38 a day – has some surface-level merit. The government is removing an "energy supplement" that started as compensation for the now defunct carbon pricing scheme introduced under Julia Gillard.
But other groups – taxpayers and people already on welfare – get to keep the compensation despite the carbon tax being dead, buried and cremated. Only people new to welfare will lose the increase.
The cut to payments effectively rejects a call by last year's National Reform Summit – a meeting of business and community leaders – that income support for those looking for work needs to rise so they can "live decently and search for employment".
It ignores the Business Council's four-year push for the payment to be lifted above the base level – $268.20 a week including the energy supplement, and now promised to be $4.40 less. The cut is nearly the same size as the $6 a week tax cut the budget promises taxpayers earning more than $80,000.
Australian Council of Social Service chief executive Cassandra Goldie has offered qualified praise for another key budget measure – the introduction of a 12-week paid internship program for young jobseekers and the near abolition of Work for the Dole – but says the cut was an "unconscionable decision" that will force more people below the poverty line.
As this graph shows, Newstart Allowance payments have steadily decreased in relative terms over the past two decades to less than 40 per cent of the minimum wage.
Source: ACOSS
Newstart is increased in line with inflation. Pensions, which are pegged to wages, rise at a faster rate. KPMG says the dole should be lifted to $300 a week. In a paper released last month called Solving the Structural Deficit, the tax and auditing firm says political rhetoric on Newstart is behind community standards – a fact that is clear to "most sensible commentators".
KPMG tax centre leader Grant Wardell-Johnson says the cut suggested the government had not shifted its thinking in line with the business community.
"I think it's prolonging a psychology within the government … that there are a whole bunch of dole bludgers out there and they don't deserve funds from the government," he says. "I certainly think that mindset has existed for a number of years, but it unfortunately continues."
The cut comes as national youth unemployment is nearly 13 per cent.
KPMG's arguments for raising the dole include that at the current level people find it hard – psychologically, but also in being simply able to properly present themselves – to compete for jobs. It says it also locks employed people into jobs they hate – and therefore in which they probably are not performing – because they fear they could not survive without their wage.
The low payment is also pushing people to qualify for the Disability Support Pension – a shift that can be a psychological setback for the individual and expensive for the government. The disability pension is worth about $130 a week more than Newstart.
The government responded this week by pledging to crack down on access to disability payments, with 30,000 people to be sent to government-approved doctors to assess whether they should be switched to the dole.
Social Services Minister Christian Porter says the only way Australia could have a sustainable welfare system with a solid safety net was by ensuring it was not spending now at the expense of future Australians. He says increasing the base rate of Newstart by $50 a week would cost the budget nearly $6 billion over four years – a sum he describes as astonishing.
"This government doesn't believe in more taxing for the sake of more welfare spending, nor in borrowing more money to expand welfare expenditure," he says.
Opposition families and payments spokeswoman Jenny Macklin backs the ACOSS/Business Council position that Newstart is not an adequate safety net, and for many people is a barrier to finding work – issues she addressed in a social policy document released in March. But Labor is yet to announce its election position.
