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Why the price hike of 7-Eleven’s famously cheap brew has people worried

7-Eleven Australia’s iconic $1 coffees will soon cost $2, in the company’s first price rise in 13 years.
The price hike will occur on Tuesday 4 October, for the first time since 2009.
While many Australians have enjoyed the cheap coffee, many homeless Australians will no longer be able to afford it.

Lionel Farnham has sold The Big Issue, an Australian street newspaper that helps homeless and disadvantaged people find work, on the footpath outside Melbourne’s Young and Jackson pub for 25 years.

Mr Farnham was homeless until he was helped by the Salvos a few years ago, and says when you’re on the streets, a hot drink is “welcome”.
“It’s nice to have a hot drink, especially in winter,” he said.
“Because homeless people have to stay in the cold, and coffee is really welcome.
“A hot drink for one dollar was affordable, but two dollars is gonna be hard.”
Mr Farnham says homeless people often “don’t even get money”.
He said many homeless people are “too shy” to go on Centrelink, and for those who do, the current payments are “not enough at all”.

“They need help.”

‘It’s a disgrace’: Calls for higher unemployment benefits

Chair of Homelessness Australia Jenny Smith told SBS News that many Australians have to choose between food and rent, largely due to insufficient payment support from the government.

Ms Smith says the cost of living pressures are “just turning the screws” on Australians on the very lowest incomes and is calling for a raise in Centrelink payments from $45 to $70 per day.

She says living on $45 is “inconceivable”. “Life is very tough for people on low incomes in Australia,” Ms Smith said.
“The sorts of increases you’re talking about [7-Eleven coffee price rise] is another nail in a very difficult situation.”
Ms Smith says the Australian Council of Social Services [ACOSS] is also calling for an increase in rental assistance payments, which is around $10 per day, to be increased to $15 per day.
“That’s still a very low income as the purchase value of what those dollars are worth just keeps declining,” Ms Smith said.
“But at the moment, it’s a disgrace.”

Ms Smith says while wage growth has been at the front of political discourse this year, “we’re not speaking about a wage rise for people on the lowest incomes”.

From Homeless to a Home

Andrew was homeless during the pandemic and was living out of his van.
As part of the From Homeless to a Home (H2H) program, he was provided accommodation, which he had to pay half of, and his Centrelink payment was doubled.
He says Centrelink payments are “far too low” for people to survive on, and he was only able to afford basic needs when it was doubled.
“It was really hard to survive on normal benefits because you had to actually pay for the hotel,” he said.
“But when they increased the benefits, doubling it during the COVID period, it was a real godsend.
“I could then afford food and to keep my mobile going.
Andrew says he doesn’t think increasing Centrelink payments is about giving “a new, great lifestyle” rather, he says it’s about giving people an opportunity to “survive”.
He says when you’re homeless, coffee is a major “luxury”. In fact, according to Andrew, even food ranked third on his priority list, behind finding shelter and toilets.
“The arguments against [raising benefits] is that people will become too comfortable and won’t try to participate in society or in the economy and get a job,” he said.
“But I think the reality is that the amount of money is completely insufficient to cover the cost of living, including accommodation, or food, and trying to keep in contact using your mobile phone because you have lots of appointments that you have to attend and doctors to see and mental health experts and things like that.”
Andrew says 7-Eleven was his favourite store when he was homeless.

“7- Eleven was probably my favourite store during my period of homelessness because of the $1 coffee,” he said. “It was a luxury that I could afford.”

In 2020, before the pandemic, more than 300 people slept on the street in Melbourne every night.
However, a much larger number of people are homeless, as the term also encompasses people sleeping in their cars, on other people’s couches and in severely overcrowded or temporary accommodations.
The 2016 ABS census recorded 1,725 people as homeless in the City of Melbourne.
There were 116,427 people classified as homeless across Australia.
On average, there are around five people who are homeless to every 1,000 Australians.
7-Eleven says price changes are the result of “sustained cost increases across the board which have made the existing prices unsustainable”.
“We understand the effect even small price increases have. We value you and your ongoing support, and we look forward to seeing you in our stores soon,” the company wrote in a Facebook post.

7-Eleven has been contacted for comment on whether it has strategies to help homeless or disadvantaged members of society who rely on their $1 coffees.

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