Much has been made of the fact Newstart hasn't increased in real terms since 1994. But why has the freeze gone on so long? Let's look back at how we got to this point.

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Newstart was introduced in July 1991, as a more "active" way to combat rising unemployment that rose from 0.5 per cent of the working age population in 1973 to 8 per cent of working age people in 1993.

In March 1994, the Keating government increased Newstart by $2.95 a week above the rate of inflation.

No one knew back then, but this would be the last time Newstart was raised in real terms.

In 1997, the Howard government decided instead to tie the payment to inflation (unlike the pension which is tied to wages). This effectively froze the payment permanently.

And with wages now rising more quickly than inflation, the gap between the age pension and Newstart began to grow. And grow. In the mid-1990s, Newstart was around 90 per cent of the pension. This proportion has now fallen to around 60 per cent.

Fast forward to July 2006. The Howard government introduced new Welfare to Work laws. Suddenly, people with disability deemed to have some ability to work were no longer eligible to apply for the Disability Support Pension (DSP).

Instead, they were pushed onto the lower Newstart rate – and forced to seek at least 15 hours a week of work.

Kevin Rudd swept to power in 2007 after more than a decade of conservative government, promising hope and change. But when it came to Newstart, officially or otherwise he continued a bipartisan strategy of pretty much ignoring people on the benefit.

In 2009 his government increased the age pension by $30 a week. Newstart recipients got nothing. Ditto for Rudd’s Household Stimulus Package, which boosted people on the age and disability pensions, carer payments and family tax benefit – while Newstart recipients were ignored.

The first major report to call for an increase to Newstart came in 2010, when then Treasury secretary Ken Henry released the Henry Tax Review. He called for the government to boost Newstart by about $50 a week (equivalent to around $63 a week today).

This never eventuated.

The Labor government, now under Prime Minister Julia Gillard, announced plans in 2012 to move single unemployed parents onto Newstart once their children turned eight – to save the government about $700 million over four years.

It was the Gillard government that in 2012 also introduced tougher eligibility requirements for the DSP. The number of new DSP participants fell from a peak of almost 89,000 in 2009-10 to around 32,000 in 2016-17. Most applicants were forced onto Newstart – and $170 less a week.

In 2015, there was ANOTHER review calling for action on Newstart.

Patrick McClure’s Review of Australia’s Welfare System said a panel of experts should periodically review the level of Newstart against changing community living standards.

This never eventuated.

In 2016, the Coalition government outlined budget plans to scrap the Energy Supplement for new recipients of Newstart. That would have meant an extra $4.40 a week gone, but the legislation failed to pass.

Undeterred, the Turnbull government tried a different tack in the 2017 budget, announcing changes to the welfare system including plans to establish a drug testing trial for 5,000 new recipients of Newstart and Youth Allowance.

And when the Greens introduced legislation in 2017 to increase Newstart and Youth Allowance by $110 a fortnight, Labor voted with the Coalition to ensure the bill failed.

Around this time, @ACOSS launched its “Raise the Rate” campaign.

The peak welfare group demanded that the federal government immediately lift the single rate of Newstart, Youth Allowance and other related payments by at least $75 per week, and index allowances to wages.

The campaign to raise Newstart then gained an unlikely ally in former Prime Minister John Howard – the man who started the Newstart freeze all the way back in 1997.

“I think the freeze has probably gone on too long,” Howard admitted in May 2018.

The @salvos agreed. Later that month, they published research that revealed the average Newstart recipient was living on just $17 a day after accommodation expenses.

An Essential Poll also found that 68 per cent of Australians backed an increase to Newstart.

In December 2018, opposition leader Bill Shorten told Labor’s national conference that the ALP would review, rather than immediately raise, the rate of Newstart if elected. Maybe they would have gone on to increase the $40-a-day payment, but they weren’t elected.

Instead, the Morrison government was re-elected. But it continued to faced pressure to raise the rate. Liberal Senator Dean Smith, former deputy PM Barnaby Joyce, Liberal Senator Arthur Sinodinos and Nationals Senator Matthew Canavan all publicly called for an increase.

By July, there was enough public pressure for the Senate to launch an inquiry into the rate of Newstart. Harrowing stories have emerged of Newstart recipients losing homes, skipping meals, self-harming, and rationing their insulin. The inquiry report is due in March 2020.

But the Coalition government is standing firm. In October, Social Services Minister Anne Ruston stated that raising Newstart would simply “give drug dealers more money and give pubs more money”.

That's where things stand now. You can read more about the history of Newstart here: https://probonoaustralia.com.au/news/2019/11/a-sad-and-sorry-history-of-newstart/