Acoss says the Newstart unemployment benefit now covers only three-quarters of recipients’ basic needs

People on Newstart now receive only 75% of what is needed just to afford basic living costs, analysis shows, prompting a new call from campaigners for a nearly $100-a-week boost to the unemployment benefit.

Citing new analysis of the wage index between 2016 and 2018, the Australian Council of Social Service (Acoss) will reveal on Thursday that it is now calling for a $95 boost to the $279.50 weekly payment, up from a previous demand of $75 a week.

The proposal, contained in Acoss’ federal budget submission, aims to address the widening gap between the combined rate of Newstart and rent assistance and what the organisation says a single unemployed person needs to afford essentials such as food and shelter.

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The Acoss chief executive, Cassandra Goldie, said the government must be willing to jettison the surplus to fund a Newstart increase, likening the situation to the prime minister’s recent pledge that the bushfire recovery would not be influenced by concerns about the budget bottom line.

“It’s effectively senseless cruelty to continue to ignore what is so widely understood to be one of the key causes of the level of poverty in Australia,” she told Guardian Australia.

Pointing to the organisation’s own research showing more than 80% of Newstart recipients skipped meals to make ends meet, Goldie also warned the government against a targeted boost to the incomes of a select group of Newstart recipients, as some Nationals MPs have proposed.

“We challenge the government to say which of those people are less deserving of needing to feed themselves and keep a roof over the head,” she said.

The Newstart allowance, which has not increased in real terms in 25 years, is indexed to inflation, while other payments are tied to wages. This means the unemployment benefit continues to fall further behind living costs, as well as other payments like the age pension, and is now considered one of the least generous employment benefits in the world.

The $3.8bn-a-year Acoss proposal would boost payments for 850,000 people across the country, including those on other allowances such as youth allowance and sickness allowance, and also calls for a $20-a-week increase to rent assistance.

Using a measure developed by the UNSW’s social policy research centre, Acoss found that between 2016 and May 2018, basic weekly living costs rose $26 to $460 a week, while the combined rate of Newstart and rent assistance increased by only $7 over the same period.

Despite calls from within its own ranks, the government has repeatedly declined to increase Newstart, saying it is focused on getting people off Newstart and into work, and citing a sizeable decrease in the number of claimants, which is now down to 680,000.

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However, critics point to figures showing the average amount of time people spend on the payment has ballooned out to more than three years, while policy changes mean those relying on Newstart are increasingly likely to be sick or disabled.

At the Senate inquiry into the payment’s adequacy, which is still ongoing, Coalition senators last year demanded that campaigners identify “new taxes” that would fund a boost to the unemployment benefit.

The Acoss budget submission proposes, among other things, a crackdown on tax concessions for trusts (estimated to save $1.2bn a year) and small businesses ($300m a year), negative gearing reform ($600m), and calls on the government to reverse the second phase of its income tax cuts, which come into effect in 2022.

In response to a ballooning aged care waiting list, the submission also calls for $2.3bn-a-year boost to home care packages, and a $2bn across-the-board increase to community sector funding, which Acoss says would reverse cuts made in the former Abbott government’s 2014 budget.

The Newstart proposal now puts the welfare peak body in lock step with accounting giant KPMG, whose policy for a $92-a-week increase was among the more ambitious demands flatly rejected by the Morrison government last year.