Five ministers make false Newstart claim

AAP FactCheck Investigation:

Do two-thirds of Newstart recipients stop getting the unemployment benefit within 12 months?

The Statement

"Two thirds of Newstart recipients end that payment within 12 months."

  • Deputy National Party Leader and Agriculture Minister Bridget McKenzie. July 24, 2019.
  • Finance Minister Mathias Cormann, July 26, 2019.
  • Federal member for Wentworth Dave Sharma, July 24, 2019.
  • Tasmanian Senator Wendy Askew. July, 22 2019.
  • Home Affairs Minister Peter Dutton. July 19, 2019.
  • Queensland Senator Amanda Stoker, May 11, 2019
  • Treasurer Josh Frydenberg, May 6, 2019.
  • Former Social Services Minister, now Communications Minister Paul Fletcher. April 20, 2019.

The Verdict

Mostly False - The checkable claim is mostly false, with one minor element of truth.

(L-R) Independent Member for Indi Cathy McGowan, Catholic Social Services Australia Deputy CEO Joe Sabor, Independent Senator Tim Storer and Australian Council of Social Services CEO Cassandra Golding speak on the Social Security Commission Bill at a press conference at Parliament House in Canberra, Monday, December 3, 2018.
(L-R) Independent Member for Indi Cathy McGowan, Catholic Social Services Australia Deputy CEO Joe Sabor, Independent Senator Tim Storer and Australian Council of Social Services CEO Cassandra Golding speak on the Social Security Commission Bill at a press conference at Parliament House in Canberra, Monday, December 3, 2018. AAP Image - Mick Tsikas

The Analysis

The Morrison government has come under renewed pressure to raise unemployment benefits after it was revealed a bipartisan call to increase the Newstart allowance was removed from a parliamentary report by the government on the eve of the May 2019 federal election. [1]

National Party deputy leader Bridget McKenzie defended the government's refusal to increase Newstart stating it wasn't "a lifestyle choice" and not "something you're on for the long term". [2]

AAP FactCheck examined Senator McKenzie's claim that two thirds of people on Newstart end that payment within 12 months and found the exact same claim had been repeated by four other government ministers, two Senators and a backbencher dating back to April 2019.

On July 26, 2019 Finance Minister Mathias Cormann was quoted as saying: "Two thirds of people on Newstart allowance are on it for less than a year, it is not designed to be an ongoing payment," he said. [3]

The federal member for Wentworth Dave Sharma made the same claim on Sky TV on July 24, 2019 stating: "Two thirds of people who are on Newstart have often found employment within 12 months". [4]

During a Senate debate on July 22, 2019, Tasmanian Senator Wendy Askew said: "around two-thirds of jobseekers who are granted Newstart exit income support within 12 months". [5] Home Affairs Minister Peter Dutton made the same claim on July 19, 2019, stating "two-thirds of people come off Newstart within 12 months". [6]

In a Facebook post on May 11, 2019 addressing criticism the Newstart Allowance wasn't increased in the Budget, Senator Amanda Stoker stated "Around two thirds of those granted Newstart exit income support within 12 months". [7]

Treasurer Josh Frydenberg repeated the same line on May 6, 2019, stating "the other thing about Newstart is two-thirds of the people come off within 12 months and go into a job". [8]

Scott Morrison and Josh Frydenberg
Scott Morrison and Josh Frydenberg AAP Image - Lukas Coch

Former Social Services Minister, now Communications Minister Paul Fletcher, was quoted as saying "around two-thirds of those on Newstart exited income support within 12 months" on April 30, 2019. [9]

The Newstart Allowance is an income support payment for people aged from 22 but under Age Pension who are actively looking for work. [10]

Singles with no children get a maximum of $278 per week/$555.70 per fortnight - or about $40 a day while couples receive a maximum $251 each per week/$501.1 per fortnight. [11]

The payment has not increased in real terms for 25 years. [12]

Former Prime Minister John Howard, former Deputy Prime Minister Barnaby Joyce, Minister for Resources and Northern Australia Matt Canavan, Liberal Senator Arthur Sinodinos and a number of coalition backbenchers have joined Labor and the Greens in calling for the government to raise the benefit. [13] [14]

Prime Minister Scott Morrison has stated he'd rather give a welfare boost to pensioners than the unemployed. [15]

A spokesperson for Senator McKenzie advised AAP FactCheck the source of her claim was data.gov.au, the central source of Australian open government data.

The claim is mostly false, with one minor element of truth.
The claim is mostly false, with one minor element of truth.

The most recent Social Services department data dated December 2018 captures the number of people receiving Newstart benefits. The "Payment Duration" table shows the average payment duration for all people on Newstart in December 2018 was 156 weeks or three years. [16]

The Payment Duration table shows that of all the 722,923 people getting Newstart in December 2018, 241,415 or 33 per cent received it for under one year, almost 18 per cent or 128,139 were on the payment for one to two years, 200,196 or 27 per cent were on it for two to five years, just over 17 per cent or 125,408 people had been on the benefit for between five and 10 years and 27,765 or just under 4 per cent had been getting it for over 10 years. This table shows about 66 per cent of people on Newstart were receiving the benefit for between one to 10 years. [16]

Another table in the same data document titled "Exits 12 months" shows the number of people who began receiving Newstart between January 1, 2017, and December 31, 2017. This 2017 table shows there were 376,031 people who started receiving Newstart in 2017. Of this 2017 group, 236,530 exited within 12 months or 63 per cent. [16] This table supports the claim that two thirds of people on Newstart existed within 12 months but only for 2017.

A July 25, 2019 investigation by Crikey using Department of Social Services data found "the proportion of Newstart recipients on payments for more than a year climbed from 69 per cent in 2014, to 73 per cent in 2016 and to 76.5 per cent in 2018. [17]

The Guardian Australia found on July 23 that the government was using select Newstart payment data between January-December 2017 to support its claim. [18]

The Conversation found on July 24, 2019, the contradiction between the government's claim that most people who enter Newstart quickly leave compared to most people on Newstart who have been on it for a long time, was the difference between flow and stock. It found most Newstart recipients had to survive on Newstart long-term and "at any one time the overwhelming majority of the people" on Newstart had "been on it for more than a year". [19]

The Australian Council of Social Services (ACOSS) has also disputed the government's claim stating: "two thirds of people receiving Newstart have received the payment for 12 months or more". [20]

Based on this evidence AAP FactCheck found the claim that "two thirds of Newstart recipients end that payment within 12 months," made by Ministers McKenzie, Frydenberg, Dutton, Cormann and Fletcher, plus Senators Askew and Stoker and Wentworth MP Dave Sharma, to be false.

The correct number of people who have ceased receiving Newstart within 12 months was one third, according to Department of Social Services' ongoing data, not two thirds as government ministers claimed. The government's claim is only true when referring to the number of people who started and exited Newstart in the 2017 calendar year.

The Verdict

Mostly False - The checkable claim is mostly false, with one minor element of truth.

The References

1. 'Push to lift Newstart 'erased' before election', by Rob Harris. The Sydney Morning Herald. July 23, 2019: https://www.smh.com.au/politics/federal/push-to-lift-newstart-erased-before-election-20190723-p52a19.html

2. 'Speers, Sky News TV'. July 24, 2019: https://twitter.com/SkyNewsAust/status/1153915894168346624

3. 'Older unemployed out of retirement review', by Sophie Moore AAP. The Murray Valley Standard. July 26, 2019: https://www.murrayvalleystandard.com.au/story/6295110/older-unemployed-out-of-retirement-review/

4. 'Kenny Report'. Sky News TV. July 24, 2019: https://twitter.com/SkyNewsAust/status/1153882107015417856

5.'BILLS - Social Services Legislation Amendment (Ending the Poverty Trap) Bill 2018 - Second Reading', The Senate. Parliamentary Debates. Commonwealth of Australia. July, 22 2019: https://www.aph.gov.au/Parliamentary_Business/Hansard/Hansard_Display?bid=chamber/hansards/321e53ef-bdc0-4689-b88c-9a46579fb063/&sid;=0019

6. Coalition puts surplus before Newstart rise', by Phillip Coorey. Australian Financial Review. July 19, 2019: https://www.afr.com/news/politics/national/coalition-puts-surplus-before-newstart-rise-20190719-p528pv

7. Senator Amanda Stoker. Verified Facebook page. May 11, 2019: https://www.facebook.com/SenatorStoker/posts/theres-been-some-criticism-that-the-newstart-allowance-wasnt-increased-in-the-bu/2123942921219520/

8.'Bill Shorten appears on Q&A; after Scott Morrison's 7.30 interview - as it happened', by Amy Remeikis. The Guardian. May 7, 2019: https://www.theguardian.com/australia-news/live/2019/may/06/federal-election-2019-labor-coalition-polls-politics-live?page=with:block-5ccfa8ae8f086f179813be5e#liveblog-navigation

9. 'Coalition promises to support charities and the NDIS... but won't budge on Newstart', by Luke Michael. Pro Bono Australia. April 20, 2019: https://probonoaustralia.com.au/news/2019/04/coalition-promises-to-support-charities-and-the-ndis-but-wont-budge-on-newstart/

10.'Newstart Allowance'. Department of Human Services: https://www.humanservices.gov.au/individuals/services/centrelink/newstart-allowance

11. 'Newstart Allowance - How much you can get'. Department of Human Services: https://www.humanservices.gov.au/individuals/services/centrelink/newstart-allowance/how-much-you-can-get

12. ''Utterly shameful': Renewed push to raise unemployment benefit', by Sam Clench and Jasmine Hines. News.com.au. July 22, 2019: https://www.news.com.au/finance/economy/australian-economy/utterly-shameful-renewed-push-to-raise-unemployment-benefit/news-story/17fe7ccb8e715bd964435a8d3f08cbde

13. 'Newstart: Liberal MPs break ranks to join Nationals group calling for welfare increase', by Sarah Martin. The Guardian Australia. July 22, 2019: https://www.theguardian.com/australia-news/2019/jul/22/newstart-liberal-mps-break-ranks-to-join-nationals-group-calling-for-welfare-increase

14. 'Two Libs join push to lift dole payments', by Matt Coughlan. AAP. July 23, 2019: https://www.hepburnadvocate.com.au/story/6287427/two-libs-join-push-to-lift-dole-payments/

15. 'Morrison government to prioritise pensioners over Newstart recipients', by Rob Harris and Judith Ireland. The Sydney Morning Herald. July 24, 2019: https://www.smh.com.au/politics/federal/morrison-government-to-prioritise-pensioners-over-newstart-recipients-20190724-p52afs.html

16. 'DSS Demographics December 2018. Two tabs. Tab 1: Payment Duration: Selected payment recipients by duration on payment and average duration, December 2018. Tab 2: Exists 12 months: Recipients who entered selected payments between 1 January 2017 and 31 December 2017' and. Department of Social Services. March 22, 2019: https://data.gov.au/dataset/ds-dga-cff2ae8a-55e4-47db-a66d-e177fe0ac6a0/distribution/dist-dga-3c69d15e-5ac1-48d9-9ae4-56957c63485a/details?q=

17. 'How long do people really stay on Newstart?', by Peter Whiteford. Crikey. July 25, 2019: https://www.crikey.com.au/2019/07/25/newstart-time-transitional-payment/

18. 'One of the worst': how Newstart compares to unemployment payments in rest of the world', by Luke Henriques-Gomes. The Guardian Australia. July 23, 2019: https://www.theguardian.com/australia-news/2019/jul/23/one-of-the-worst-how-newstart-compares-to-unemployment-payments-in-rest-of-the-world

19. 'Are most people on the Newstart unemployment benefit for a short or long time?', by Peter Whiteford. The Conversation. July 24, 2019: https://theconversation.com/are-most-people-on-the-newstart-unemployment-benefit-for-a-short-or-long-time-120826

20. 'Raise the Rate of Newstart fact check'. Australian Council of Social Services. July 22, 2019: https://www.acoss.org.au/media_release/raise-the-rate-of-newstart-fact-check/

* AAP FactCheck is accredited by the Poynter Institute's International Fact-Checking Network, which promotes best practice through a stringent and transparent Code of Principles. https://factcheck.aap.com.au/



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