Unlike tax cuts, raising Newstart and the minimum wage will effectively reduce poverty and boost the economy, argues The Australian Council of Social Service’s submission to the Fair Work Commission on the minimum wage.

“Instead of handing out tax cuts as misguided election sweeteners, the government should take real action to tackle poverty and strengthen the economy,”  said CEO of the Australian Council of Social Service, Cassandra Goldie.

“Both an urgent $75 per week rise in Newstart and a substantial rise in minimum wages are the fundamental steps we must take in any serious effort to reducing poverty.

 “People on the lowest incomes – including Newstart and minimum wages – must spend the money they receive to cover the very basics like food and rent, so boosting their incomes is a far more effective way to bolster economic growth than more tax cuts.”

Goldie said that a rise in Newstart would particularly benefit businesses in the regions struggling the most with high unemployment.

“Increasing Newstart and the minimum wage would increase consumer spending, creating new jobs; while at the same time, a stronger Newstart would give people the support they need to get through tough times and into these jobs,” she said.

“One in six children live in poverty in our wealthy country and in order to reduce child poverty we need to reverse government funding cuts to family payments and expressly consider these cuts in the setting of the minimum wage.

“In the past decade, more than $12 billion has been cut from payments for individuals and families with low incomes, including by dumping all single parent families from the single parent payment on to the low Newstart Allowance once their youngest child turns eight.”