I have not seen any job-holder with family spends less than the figure you mentioned, but also, I know a number of people (mainly students or ones without a job) live within 2-2.5K.
I think, the figure touches 5K because, usually the job holders have several mortgages like car loan, house loan, health insurances, car insurances, babysitting cost etc.
If you take those out of the equations, you should be getting a 2-bedroom apartment within $400 a week (outer suburbs in Sydney), utilities $200 a month. The rest is the daily expenses which should be manageable within $500-$600/month.
Again, I am thinking from the perspective of a student or someone who does not have a job. If someone can't start a day without a $10 coffee in the morning supplemented by few extra cups during the day, and with the habit of frequent dining out, I am not considering them in this equation
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No, only Australian residency period will be counted.
https://www.humanservices.gov.au/individuals/services/centrelink/newstart-allowance/who-can-get-it