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20 January 2021
The Treasury
Australian Government
Dear Secretary,
RE: 2021-22 PRE-FEDERAL BUDGET SUBMISSION
The St Vincent de Paul Society National Council of Australia (the Society) is a lay Catholic charitable
organisation that comprises over 50,000 volunteers and members and 6,000 employees who provide
on-the-ground assistance across Australia.
Our members and volunteers work directly with those in need by giving them a hand up so that they
can achieve their full potential. On behalf of those we assist, we appreciate the Australian
Government’s (Government) support that was made available during COVID-19, particularly the
one-off cash payments, Coronavirus supplements, JobSeeker, JobKeeper, JobMaker and JobTrainer
initiatives.
However, there remains several key social policy issues that if addressed in the 2021-22 Budget
would significantly improve the lives of many Australians and stimulate economic growth. These
include increasing the base rate of the old Newstart payment on an ongoing basis, supporting those
who are currently falling through the cracks and increasing access to affordable, safe and energy
efficient housing.
This approach is in line with research which shows that effective fiscal stimulus packages ‘go early
and hard’ to households and are directed to those most impacted by the crisis. They support domestic
production, target regional disadvantage and provide direct employment and co-benefits. (1) Although
short-term welfare, cash flow and wage subsidy measures have been welcomed, ongoing support that
reflects the losses incurred and is specific and targeted to those who need it most, is required. (2)
Although the Mid-Year Economic and Fiscal Outlook provided a faster than expected labour market
recovery, it is estimated to take four years for unemployment to return to pre-pandemic levels. (3)
Every dollar the Government invests in JobSeeker generates a significant economic return, helping to
pave the road out of recession. Providing people without paid work with enough to get by is a highly
effective economic stimulus, as they have little choice but to spend straight away on essentials. (4)
Each time the Government reduces the Coronavirus supplement, more and more people are pushed
into poverty. When the full Coronavirus supplement of $550 per fortnight was implemented, the
number of people living in poverty reduced by 425,000. (5)
However, the first cut of the supplement from $550 to $250 in September pushed 370,000 people
back into poverty, including 80,000 children. (6) The second cut from $250 to $150 in January will push a
further 190,000 people into poverty, including 50,000 children. (7)
The current extension of the Coronavirus supplement of $150 per fortnight to 31 March 2021
translates to just $50 a day (instead of the previous rate of $40) and provides no long-term certainty
for around 1.6 million people on Newstart, Youth Allowance and the Parenting Payment (May 2020)
and the more than one million children living in affected households. Even if this amount is retained by
increasing the base rate by the same amount ($150 per fortnight), 505,000 people will be pushed back
into poverty. (8)
The Coronavirus supplement has been used judiciously by recipients to cover every-day expenses. As
at November 2020, paying household bills (67 percent) was the most reported use of the supplement,
followed by purchasing household supplies, including groceries (63 percent), and then meeting
mortgage/rent and medical costs. (9) Importantly, these additional payments quickly wash through local economies thereby benefitting local businesses and communities.
We cannot go back to $40 per day. The Society’s submission to the Parliamentary Inquiry into
Newstart (Sub No.119) (10) contains case studies that demonstrate the hardship experienced by those
forced to live on $40 per day. If the Government cuts the supplement altogether and does not increase
the base rate, it is estimated that 270,000 mortgagees and renters who were not in poverty before
COVID-19 will be forced into it. (11) The estimated average annual impact of reduced expenditure across
the broader economy would equate to $31.3 billion, with an average loss of 145,000 full-time
equivalent jobs over a two-year period; and the impact would be felt hardest in regions already facing
greater levels of disadvantage. (12)
A nuanced policy approach that addresses unemployment and underemployment and that reforms the
labour force, by reducing the casualisation of work, is also required. We recognise that over
80 percent of jobs lost in the initial downturn have been replaced; this indicates Australia is well-placed
to address the pandemic downturn compared to other national economies. However, through the
support provided by our members everyday across the nation, we see the effects of inequities that are
still evident in the labour force.
Research shows that:
At a time when job security is needed, the Government has introduced the Fair Work Amendment
(Supporting Australia's Jobs and Economic Recovery) Bill 2020 which contains provisions that
reinforce insecure work in the labour market. The Bill will allow employers to make agreements with
their employees that cut the wages and conditions of workers. The Fair Work Commission will be able
to approve agreements that do not meet the better off overall test for two years. Employers will be able
to deem work as casual and therefore treat permanent part-time workers as casuals, with no leave
entitlements or job security at the time employment commences. (16) Existing casuals will also lose any previous entitlement to leave if they received the casual loading. (17)
Research shows that more than half of casual workers do not receive the 25 percent loading in their pays. This means that they have fewer rights, no paid leave and lower pay than permanent workers.
Australia lags behind almost all other high-income countries that require temporary workers to have
the same leave entitlements as permanent workers. Of the 800,000 jobs lost since the beginning of
the pandemic, 500,000 were casual workers – insecure jobs were the first to go when the pandemic
hit and unfortunately even more are being created during the recovery. (18) The Fair Work Amendment
Bill should be scrapped and work re-commenced on enacting true labour force reform.
Assistance should be targeted to those most impacted by the Coronavirus namely those who cannot
access income support or health care. These people’s needs have remained unaddressed during the
pandemic.
The Society’s submission to the Parliamentary Inquiry into COVID-19 (Submission No. 258) (19) identified casual workers who have lost their jobs, asylum seekers on bridging visas and temporary
visa holders including refugees, temporary migrant workers and international students as those who
have approached the Society for assistance during the pandemic, often for the first time.
The Society notes that the Government, in partnership with all states and territories except the
Northern Territory, implemented a pandemic leave disaster payment. The Society welcomed the
additional Commonwealth Emergency Relief funding it received for distribution and the $7 million
made available to the Red Cross specifically to assist temporary visa holders. However, at June 2020,
just over 2 million people were on temporary visas, many with little or no safety net, such as those
seeking asylum. The payments are one-off and therefore drive a reactive, band-aid approach to
assistance, rather than a preventive, long-term and sustained response. Consequently, the Society is
using mostly its own resources to provide ongoing housing and emergency relief assistance to these
people.
For those receiving Red Cross emergency relief:
The Society continues to urge the Government to support temporary visa holders by providing:
We remain concerned about the movement of 188 people to date (and up to 515 people) from
community detention to Final Departure Bridging Visas by the Minister for Home Affairs. Moving
people from community detention, at this time, only exacerbates difficult living conditions of vulnerable
people, namely asylum seekers who were transferred from Papua New Guinea (PNG) and Nauru to
receive medical treatment not available in those countries.
Most of these people were given refugee status in PNG or Nauru under refugee status determination
processes established with Australian Government support. Removing access to the Status
Resolution Support Service (SRSS) also means that these people are being forced to find
accommodation within a short time period (usually around three weeks). With no rental history or
reliable income source, this is an unrealistic and unattainable outcome. Expecting people to find work
during this period, for a group that has been unable to access education or training (for those people
aged over 18 years), is an equally insurmountable hurdle. Further, we remain unclear whether
Medicare will cover their ongoing medical needs.
We do not want to see these people becoming homeless and are working with other agencies, such
as the Australian Red Cross, Life without Barriers, Australian Migrant and Refugee Centre, Welcoming
Australia, Circles of Friends and STARRS in South Australia to maximise the type of assistance
provided. However, we cannot do this indefinitely as resources are finite and dependent on volunteers
and donations, both of which have been adversely affected by the pandemic.
The Government should:
The changed eligibility criteria and over 85 percent funding cut to the SRSS since 2017-18 have
adversely affected asylum seekers on bridging visas and refugees on temporary visas, well before the
pandemic set in. In one jurisdiction, over 100 additional asylum seekers and refugees have sought the
Society’s assistance. In another jurisdiction, finding sustainable housing and covering rental costs
continue to be a significant issue for this group.
We know that changes to the SRSS have forced asylum seekers and refugees into situations of
material poverty rather than assisting them to find employment. Almost four in five people are at risk of
homelessness and only one in five are job ready. The changes have shifted federal welfare costs and
responsibilities to state agencies and community-based organisations, at an estimated cost of
between $80 to $120 million per year. (22)
The SRSS budget has been reduced from $139.8 million in 2017-18, to $93.4 million in 2018-19 and
$39.5 million in 2019-20. The 2019-20 Budget was underspent by 25 percent as most people seeking
asylum failed to meet the eligibility criteria and were refused access to support services. The
Government plans to cut its spending in half again, to just $19.6 million in 2020-21. (23)
The Government should:
During the pandemic, it has been almost impossible for refugees and asylum seekers on temporary
visas to support themselves as most were employed in low income, insecure jobs which were the first
to be cut. They cannot find sufficient employment to support themselves and have exhausted their
savings. The unemployment rate for this group is estimated to rise from 19 percent to 42 percent, or
19,000 refugees. (24)
One-off payments also do little to prevent people from becoming homeless, living in over-crowded
conditions or falling into destitution. The homelessness rate for people seeking asylum is estimated to
increase to over 12 percent, affecting 14,000 people at an additional cost of $181 million in health,
justice, social and other services. (25) Almost 90 percent of people seeking asylum and requiring
assistance from agencies have reported difficulty with paying rent. Over 70 percent have gone without
meals and around three-quarters have had difficulty paying their utilities. (26)
The Society urges the Government to:
The most common issues affecting people accessing community social services are housing
pressures, homelessness (observed by 74 percent of staff) and inadequate rates of income support
(69 percent). Levels of unmet need are high particularly in regional and rural areas, where people also
grapple with energy costs. (27)
Even prior to the pandemic, demand for safe, secure and affordable housing was not being met. There
is currently a shortage of almost 430,000 homes that are affordable (135,000 in NSW, 100,000 each in
Vic and Qld, 38,500 in WA, 32,500 in SA, 11,400 in Tas, 7,700 in NT and, 3,000 in ACT). (28)
The Society’s submission to the Parliamentary Inquiry into Housing and Homelessness (Sub No.
142) (29) outlines the community housing and support services that we provide, along with the issues
faced by those trying to secure affordable and appropriate housing.
Rental affordability remains a significant issue. While the JobSeeker supplement has improved rental
affordability for those households that were already on Newstart (approximately 689,000 recipients),
rental affordability has decreased substantially for most new JobSeeker recipients who lost their jobs
(approximately 755,000 recipients). The situation remains untenable for people on JobSeeker, with
rent costing 42 to 69 percent of their income in every capital city. (30)
The economic benefits of investing in new and refurbished social and community housing are well
documented. It would kick-start the economy by creating jobs, boost trade and create flow-on market
activity. A federal investment of $7 billion is estimated to boost the post pandemic economy by
$18.2 billion and create 18,000 jobs per year over four years. (31)
The Master Builders Association, the Housing Industry Association and the Community Housing
Industry Association have called on the Government to invest in social housing now. The burden
cannot be borne by the private sector (or any one sector) alone and the risk of government crowding
out private-sector investment during a weak economic period is low. (32, 33)
The various economic stimulus programs currently in place are too small to create new employment
on a large-scale and therefore provide a major boost to the economic recovery. Further stimulus
measures are required into 2021 as the impact of the first round of demand side measures end.
The Society supports AHURI’s recommendations that large-scale funding of social housing
development and refurbishment, similar to the Social Housing Initiative response to the Global
Financial Crisis, is required. Immediate reform of tax settings to encourage institutional investment in
affordable housing and build-to-rent developments is also required. (34)
There are 956,000 households living in housing affordability stress in Australia. The CRA reduces this
number to 758,000. While there is a heavy concentration of stress in the private rental sector, this is
reduced after the CRA is taken into account (from 69 percent to 61 per cent). (35)
The CRA program requires additional funding and an overhaul. Almost half of the funding is poorly
targeted. 330,00 or 23 percent of people receive assistance despite paying rents below 30 percent of
their income. 419,000 private renter income units also receive assistance even though they are on
moderate incomes.
At the same time, nearly two-thirds (933,000 out of 1.41 million) of low-income private renter income
units are assisted by CRA but over one-third of these recipients still carry a net housing cost burden of
more than 30 per cent, after CRA is deducted from rents.
Given the housing accessibility crises, the Society supports raising the CRA maximum rate, which
would improve affordability outcomes for 623,800 income units or 44 per cent of low-income private
renters, at an annual cost of $4.6 billion. This could be partly offset with a change to eligibility criteria,
which would reduce the targeting error and generate annual savings of around $1.2 billion. (36)
The uncertainty that lies ahead with respect to income support, wage subsidies and the lifting of
eviction moratoriums has led to estimates that homelessness will increase by 9 percent, with 24
percent more families experiencing housing affordability stress. (37) The number of people living in
housing affordability stress is estimated to rise by a further 124,000, with 73 percent of these
households being private renters.
CRA alone is insufficient to fully mitigate the impacts of an economic downturn. A combination of CRA
and a 25 percent rent relief scenario has the most powerful impact on simulated numbers of people
living in housing affordability stress. (38)
The Australian Government should:
The Society believes that opportunities should be created out of challenges. Now is the time to lift
millions of people out of poverty and provide them with a home so that they are empowered to drive
change in their lives, to look for training and employment opportunities and improve their overall social
connectedness, health and wellbeing.
Revenue could be recovered by reviewing superannuation laws and not proceeding with the next
tranche of tax cuts.
A summary of the Society’s recommendations for the 2021-22 Federal Budget is attached.
Yours sincerely
Toby oConnor
Chief Executive Officer
RECOMMENDATIONS FOR 2021-22 FEDERAL BUDGET
In the 2021-22 Budget, the Government should:
- repeat emergency relief payments and access to the full range of concessions available to
others on low income.
- tailored employment pathways and temporary visa extensions that ensure people have
work rights and are not penalised if they undertake study.
- access to safe and affordable housing.
- access to health treatment, including support to cover the gaps in health care and
medication. (39)
1. Denniss, R. Grudnoff, M. Richardson, D. April 2020. Design Principles for Fiscal Policy in a Pandemic How to
create jobs in the short term and lasting benefits in the long term. The Australia Institute.
Accessed at:
https://australiainstitute.org.au/wp-content/uploads/2020/12/Design-Principles-for-Fiscal-Policy-in-a-Pandemic-WEB.pdf
2. Biddle, N. Edwards, B. Gray, M. Sollis, K. 11 December 2020. Tracking outcomes during the COVID-19
pandemic (November 2020) – Counting the costs of the COVID-recession. ANU Centre for Social Research
and Methods.
Accessed at:
https://csrm.cass.anu.edu.au/sites/default/files/docs/2020/12/Tracking_wellbeing_outcomes_during_the_COVID-19_pandemic_November_2020.pdf
3. Karp, P. 17 December 2020. MYEFO: Australia's economic recovery lifts government revenue and shrinks
deficit to $198bn. The Guardian.
Accessed at: https://www.theguardian.com/business/2020/dec/17/myefoaustralias-economic-recovery-lifts-government-revenue-and-shrinks-deficit-to-198bn
4. ACOSS media release. 15 September 2020. Cuts to JobSeeker to cost 145,000 full-time jobs - Deloitte report, with reference to Nicki Hutley Deloitte Access Economic Partner.
5. Grudnoff. M. July 2020. Poverty in the age of Coronavirus.
Accessed at https://australiainstitute.org.au/wp-content/uploads/2020/12/P949-Poverty-in-the-age-of-coronavirus-WEB.pdf
6. The Australia Institute. 24 July 2020. JobSeeker Cut to Push 370,000 into Poverty, Including 80,000 Children.
Accessed at: https://australiainstitute.org.au/post/jobseeker-cut-to-push-370000-into-poverty-including-80000-children/
7. Grudnoff, M. November 2020. Poverty and a reduced Coronavirus supplement.
Accessed at: https://australiainstitute.org.au/wp-content/uploads/2020/12/P997-Poverty-and-a-reduced-coronavirussupplement-WEB.docx.pdf
8. Grudnoff. M. July 2020. op. cit.
9. The Australian Bureau of Statistics. 14 December 2020. Household Impacts of COVID-19 Survey. Insights into the prevalence and nature of impacts from COVID-19 on households in Australia.
10. The Society’s submission is accessible at:
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/Newstartrelatedpayments/Submissions
11. Grudnoff. M. July 2020. op. cit.
12. Deloitte Access Economics. September 2020. Estimating the economic impact of lowering current levels of
income support payments. Commissioned by ACOSS.
Accessed at: https://www.acoss.org.au/wp-content/uploads/2020/09/Final-ACOSS-Coronavirus-Supplement-to-ACOSS-09.09.2020.pdf
13. Nahum, D. Stanford, J. December 2020. Briefing Paper: 2020 Year-End Labour Market Review: Insecure Work and the Covid-19 Pandemic. The Australia Institute.
Accessed at: https://australiainstitute.org.au/wp-content/uploads/2020/12/Labour-Force-2020-Briefing-Note.pdf
14. Biddle, N. Edwards, B. Gray, M. Sollis, K. 11 December 2020. op. cit.
15. Biddle, N. Edwards, B. Gray, M. Sollis, K. ibid.
16. Nahum, D. Stanford, J. December 2020. op. cit.
17. Peetz., D. 13 December 2020. Chance for genuine industrial relations reform thrown under the omnibus. The Conversation.
Accessed at: https://theconversation.com/chance-for-genuine-industrial-relations-reform-thrown-under-the-omnibus-151754
18. Green, P. 8 December 2020. New report shows majority of casuals do not receive loading and have regular hours.
Accessed at: https://www.actu.org.au/actu-media/media-releases/2020/new-report-shows-majority-of-casuals-do-not-receive-loading-and-have-regular-hours
19. The Society’s submission is accessible at:
https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/COVID-19/COVID19/Submissions
20. Sampson, R. Kunz, M. 2020. Covid-19 Impacts us all – Ensuring the safety and wellbeing of people on
temporary visas during COVID-19.
Accessed at: australian-red-cross-covid-19-tempvisa-report-web.pdf (redcross.org.au)
21. Sampson, R. Kunz, M. ibid.
22. Van Kooy, J., Ward, T., Sept 2018. An Unnecessary Penalty: Economic impacts of changes to the Status
Resolution Support Services. Commissioned by Refugee Council of Australia in partnership with 10 other
community-based organisations.
Accessed at: https://www.refugeecouncil.org.au/srss-economic-penalty/2/
23. Refugee Council of Australia.7 October 2020. The Federal Budget: What it means for refugees and people
seeking humanitarian protection.
Accessed at: https://www.refugeecouncil.org.au/federal-budget-summary/
24. Van Kooy. J. 29 July 2020. COVID-19 and humanitarian migrants on temporary visas: assessing the public
costs. Commissioned by Refugee Council of Australia.
Accessed at: https://www.refugeecouncil.org.au/covid-19-assessing-the-public-costs/
25. Van Kooy. J. ibid.
26. Refugee Council of Australia. 18 December 2020. Homelessness and Hunger Among People Seeking Asylum During COVID-19.
Accessed at: https://www.refugeecouncil.org.au/homelessness-and-hunger-amongpeople-seeking-asylum-during-covid-19/
27. Cortis, N. & Blaxland, M .2020. The profile and pulse of the sector: Findings from the 2019 Australian
Community Sector Survey.
Sydney: ACOSS https://www.acoss.org.au/wp-content/uploads/2020/03/2020-ACSS_final-3.pdf
28. Australian Housing and Urban Research Institute report Social housing as infrastructure: an investment
pathway released in 2018 and detailed in the Everybody’s Home heat maps released 3 August 2020.
29. The Society’s submission is accessible here:
https://www.aph.gov.au/Parliamentary_Business/Committees/House/Social_Policy_and_Legal_Affairs/HomelessnessinAustralia/Submissions
30. National Shelter. 1 December 2020. JobSeeker recipients facing severe rental stress; Hobart remains least
affordable capital city. Media release.
Accessed at: http://shelter.org.au/site/wp-content/uploads/National-Media-Release-RAI.pdf
31. Equity Economics. December 2020. Double return - How investing in social housing can address the growing homelessness crisis and boost Australia’s economic recovery. Commissioned by Everybody’s Home.
Accessed at: https://everybodyshome.com.au/wp-content/uploads/2020/12/201215-Double-Return-Homelessness-Report-UpdatedProofed2.pdf
32. Harris, R. 27 April 2020. Private-sector, charities push for social housing-led economic recovery. The Sydney Morning Herald.
Accessed at: https://www.smh.com.au/politics/federal/private-sector-charities-push-for-social-housing-led-economic-recovery-20200426-p54nbr.html
33. Back, E. 5 May 2020. Calls for more social housing as construction activity hits record low. The New Daily.
Accessed at: https://thenewdaily.com.au/finance/property/2020/05/05/coronavirus-construction/, with
reference to Housing Industry Association Chief Economist, Mr Tim Reardon
34. Rowley, S., Crowe, A. Gilbert, C., Kruger, M., Leishman, C. and Zuo, J. 2020. Responding to the pandemic,
can building homes rebuild Australia? AHURI Final Report No. 341. Australian Housing and Urban Research
Institute Limited Melbourne.
Accessed at: https://www.ahuri.edu.au/research/finalreports/341, doi:10.18408/ahuri8126401.
35. Leishman, C., Ong, R., Lester, L. and Liang, W. 2020. Supporting Australia’s housing system: modelling
pandemic policy responses. AHURI Final Report No. 346. Australian Housing and Urban Research Institute
Limited Melbourne.
Accessed at: https://www.ahuri.edu.au/research/finalreports/346, doi:10.18408/ahuri3125701.
36. Ong, R., Pawson, H., Singh, R. and Martin, C. 2020. Demand-side assistance in Australia’s rental housing
market: exploring reform option. AHURI Final Report No. 342. Australian Housing and Urban Research
Institute Limited Melbourne.
Accessed at: https://www.ahuri.edu.au/research/finalreports/342, doi:10.18408/ahuri8120801.
37. Equity Economics. December 2020. Double return - How investing in social housing can address the growing homelessness crisis and boost Australia’s economic recovery. Commissioned by Everybody’s Home.
Accessed at: https://everybodyshome.com.au/wp-content/uploads/2020/12/201215-Double-Return-Homelessness-Report-UpdatedProofed2.pdf
38. Leishman, C., Ong, R., Lester, L. and Liang, W. 2020. Supporting Australia’s housing system: modelling
pandemic policy responses. AHURI Final Report No. 346. Australian Housing and Urban Research Institute
Limited Melbourne.
Accessed at: https://www.ahuri.edu.au/research/finalreports/346, doi:10.18408/ahuri3125701.
39. Sampson, R. Kunz, M. ibid
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