Several of the federal government's key budget measures will exacerbate income inequity and poverty in Australia and should not proceed, according to a parliamentary inquiry into the gap between rich and poor.
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The Senate Community Affairs and References Committee inquiry into the extent of income inequity in Australia released on Wednesday night found the income gap in Australia has grown since the mid-1980s, and far too many vulnerable Australians were being left below the poverty line. At the same time the richest 1 per cent of Australians had nearly doubled their share of the income pie from 5 per cent of all earnings to 9 per cent.
According to the report, many individuals and families on income support were becoming trapped in a cycle of poverty partly due to unsustainably low levels of government payments and the current level of the minimum wage.
As a result, the committee has called for a raft of budget measures to not proceed, to avoid further hardship to those already under financial strain.
In particular, the committee recommended halting budget plans to peg parenting payments and pensions to inflation, introducing 26-week waiting periods to access payments and requiring young people with full capacity to learn, earn or work for the dole.
Tightening up of Family Tax Benefits and Youth Allowance should also not go ahead, according to the report.
Evidence provided in submissions found the income of a single adult on Newstart Allowance is around $100 a week below both the Henderson Poverty Line and the 50 per cent median income poverty line in Australia.
"Far too many vulnerable Australians, individuals and families in receipt of income support, are currently living in poverty," the report said.
"The minimum wage remains an important mechanism for low income people to avoid poverty and participate in society. The evidence shows that the minimum wage makes a significant difference to income inequality and rates of poverty. It is important that the minimum wage is set at a level that reflects the rising cost of living in Australia."
In particular Aboriginal and Torres Strait Islanders, those with a disability or a mental illness, single parents and newly arrived migrants were among the most vulnerable to poverty and disadvantage.
The report found a shortage of affordable housing and the increasingly insecure nature of employment in Australia were also adding to the problem.
In addition to calling for a review of working age payments, monitoring of housing costs and funding for emergency relief payments, it recommended a number of early intervention programs to assist young people at risk of poverty, as well as tailored one-on-one approaches to reconnecting people with training and education, which had proven successful in the past.
