Archer 'not convinced' raising Newstart a solution for the poor; NILS Tasmania calls Newstart 'criminally' low

Calls have grown for the payment to be lifted in real terms for the first time in 25 years on the back of the federal government's decision to cut deeming rates for pensioners.

During an election debate, Ms Archer questioned whether raising Newstart would have real benefits for those who rely on the payment, and she stood by her view when asked again on Monday.

"My position in relation to Newstart remains what it has always been, which I think is in much the same way that we talk about housing and the complexity of issue around problems that people face in terms of whether it's disadvantage, unemployment... they really are complex issues," she said.

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"I'm not convinced that simply looking at increasing Newstart would be a one-size-fits-all solution to those issues.

"[That's] not to say that it can't be something that can be considered, but I think we also know that the majority of Newstart recipients remain on those payments for 12 months or so.

"It's more complex than just looking at whether or not raising Newstart is going to be the panacea."

The single rate of Newstart is $278 per week, and an OECD study found 53.5 per cent of Australia's unemployed are living in poverty - the second poorest in the developed world.

Ms Archer, who was mayor of one of Australia's most disadvantaged areas, George Town, prior to the election, said the issue had not been "overwhelmingly" raised with her.

"Very rarely do people say, 'look all my problems would be solved if you just increase the rate of Newstart'," she said.

"People will say, these are the range of challenges that I have, this is part of the issue, but there's all these other challenges that sit around that."

Twenty-five years ago, John Hooper and his partner were living on Newstart.

"Back then, it was just the safety net we needed and it helped us to find our feet, then we found part-time work which lead to full-time work," he said.

Since then, Mr Hooper has gone on to become chief executive of Neighbourhood Houses Tasmania, and most recently took on the position as chief executive officer of No Interest Loans Tasmania.

His roles have brought him in contact with people across Tasmania struggling to make ends meet, and he believes organisations like NILS - funded in-part by the state government - are being asked to pick up the pieces.

"Newstart is criminally low," Mr Hooper said.

"When you look at Newstart from a social, fairness, economic perspective, it's just a no-brainer for the federal government that it needs to be raised. People on the lowest incomes in Tasmania are going to spend that money in Tasmanian small businesses - groceries, car repairs, things like that - and the knock-on effect will benefit communities."

NILS Tasmania can only provide $1000 loans to people on Newstart due to the inability to make repayments, compared with $1500 for other low income earners.

"It means people can't actually buy the things they need just to get by," Mr Hooper said.

"I've been in this role for seven weeks, and we've done a dozen loans for people to pay their car registration who are living in their cars.

"We had a man cancel a loan because he was on Newstart, which made his registration overdue, then he got pulled over and was issued a fine - all because he couldn't afford the repayments.

"It's a huge cycle."

When Kylie Wright went on stress leave, she found herself reliant on government payments of little over $250 a week along with a relatively small allowance as a Break O'Day councillor.

Having worked all her life, she now faces the possibility of losing her house and entering an "unaffordable" rental market on the East Coast where there are few properties below $250 per week.

"Many properties have gone into short-term holiday leases over the past few years, especially at the low-end of the market," Ms Wright said.

She worked for five years in employment services and continues to support clients that were on her books, but most of the work on the East Coast was casual or part-time work in hospitality creating an "underemployed" class of workers.

Ms Wright said it was a myth that those on Newstart were not desperate to raise themselves out of poverty.

"When I had 120 clients, there might have been just five who couldn't care less. The rest were out there trying to find work, they didn't want to be on the unemployment benefit," she said.

"It's not about choice."

She was supportive of raising Newstart as a way of lifting people out of poverty.

"Raising Newstart might not be to the be all and end all, but it's a bloody good place to start," Ms Wright said.

"If it gives someone $75 more per week, that goes into the community, and our communities could really do with that.

"If you give that to someone on $60,000 to $75,000 a year, it might be spent, but it might go into the bank.

"On high incomes, it's just going to go into the bank account."