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EO Musings – July 2019

This piece from our Executive Officer Simon is included in our monthly 'Inside MHCC ACT' newsletter. You can subscribe to this newsletter here.

The Team has been both afflicted with illness and delighted to enjoy some leave, which has combined to lower our output in the past month. We have done enough though to fill this newsletter!


Lately there has been a fair bit of media discussion of a possible raise to the Newstart allowance. Discussion has been cast variously in terms of economic growth (or the lack of it), inequality and poverty, and the deserving & un-deserving poor. Little attention has been paid however to mental health and wellbeing, which has made me reflect on the potential wellbeing impacts of a raise in Newstart.


The proponents of the ‘un-deserving poor’ like to tell us that the people on Newstart are young and only on the payment for a short time, but that’s misleading. Analysis by the Australian Council of Social Service (ACOSS), shows that the average age of a person on Newstart is now 45, eight years older than the average Australian. Last year only 17 per cent of those on Newstart were under 25 years old. Meanwhile 38 per cent were aged 25-44, and 43 per cent were over 45. Data from National Seniors Australia shows the largest and fastest-growing cohort of people receiving Newstart was those aged 55 to 64. As of December 2018, there were 173,000 of them – close to a quarter of the total – and this cohort stays on the benefit for an average of 190 weeks or almost four years!


We also know that changes to the eligibility criteria mean the number of people assessed as having a partial capacity to work has increased dramatically. Now, according to ACOSS, about one in four Newstart recipients has a disability. Among those aged over 45, the proportion rises to 29 per cent.


As has been widely reported, being on Newstart doesn’t just mean finances are a bit tight – people on Newstart are living well below the accepted poverty line of 50% of the median wage. Living on less than $40 a day is basically impossible regardless where you live and Newstart recipients report skipping meals, not taking medication, not visiting the doctor or dentist, living without heating and cooling, only showering occasionally, and much more, to try to make ends meet.


Living under those sorts of circumstances – like an island of poverty in the middle of the sea of affluence that is Australia – can only be deeply harmful for your mental health and wellbeing!


Government mental health plans and strategies all speak to the importance of the social determinants of mental health, including the basics of secure housing, economic security, relationships, employment or other meaningful participation, and physical health, which basically means all the things you can’t afford on Newstart!


Poverty leads to poor health and poor health is linked to poverty in a vicious cycle. The very things that would improve your mental health – adequate food and shelter, social connections, a job, good access to healthcare and so on – are all out of reach for people on Newstart, which includes a significant cohort of people living with mental health issues.


On top of that there is plenty of stigma associated with being on Newstart. The way successive federal governments have talked about lifters and leaners, and other derogatory remarks about the unemployed influences the way society looks at people on Newstart, and it impacts on people’s self-image directly as well.


The recent New Zealand budget put wellbeing squarely at the centre of government policy making, and the ACT Government is working on developing a set of wellbeing indicators. These sorts of developments can give us hope, but we need the Federal Government to be brought along too.


We know from research that too much inequality actually reduces economic growth, as well as social cohesion, and individual and collective wellbeing, but Australian Government policy has encouraged inequality for decades, in particular when it comes to the unemployed. An analysis by Deloitte Access Economics, commissioned by ACOSS, highlighted that the unemployed have largely been left out of Australia’s growing prosperity. “The gap between the living standards of average Australians and those who are on these allowances has widened sharply over the past quarter of a century. And it continues to widen,” it said. “That wasn’t an accident: it was what policy has been geared to do.”


The country does not have a “dole bludger problem”, Chris Richardson from Deloitte Access Economics is quoted as saying, “what we have is a society that is unnecessarily cruel”.


Maybe – just maybe – that unnecessary cruelty is going to be lessened soon as an unlikely coalition of stakeholders increase their advocacy for a raise in Newstart, arguing from a variety of perspectives. We should celebrate such an outcome, regardless whether the push comes from the perspective of increasing economic growth, reducing inequality between recipients of different kinds of government benefits, or simply because it is the right thing to do.


-Simon Viereck, Executive Officer MHCC ACT