Labor's decision to cut parenting payments for sole parents, and shift them to Newstart, has been much maligned. But is the Government's “tough love” working? According to Bill Shorten, speaking to The Australian last week, "the Government has always said our priority is getting people into work.” Now 3800 more parents are drawing an income instead of being benefits-reliant.
The Australian's story caught my attention because the Women's Electoral Lobby/F Collective working group was having a public meeting the following night on the effects of the weekly income cuts on sole parents.
I was suspicious because the policy, only in effect for a few months, seemed to have achieved its aim quite quickly. After 2006 some 40,000 sole parents were transferred to Newstart, and there were no clear changes in their workforce participation rates in the next five years after.
Another problem was that most of the those transferred in January were already in paid work. The Government’s own figures showed in August more than 60 per cent of the “grandfathered” population left on parenting payments after the 2006 shift were already in the paid workforce. They were severely financially penalised by the move to Newstart; the new taper let them earn $57 less per week before it took a share of each dollar. This meant at least 8 per cent lost their extra payment and access to concession cards that allowed them to survive on very low incomes.
The overall cuts in weekly income under the new system range from $72.85 to over $120. Those losing the most are already in paid work; all in all, the Government's claim that the cuts were intended to push the mainly female sole parents now on Newstart into paid work doesn't seem to stack up.
What is clear is that the changed payments reinforce the Government’s failure to recognise that combining sole parenting and paid work in many cases needs extra support, not less. The problem is not that sole parents don’t want paid work but other factors out of their control: a lack of suitable local jobs, employer prejudices and sparse support services. Incentivising workforce participation by putting financial pressure on sole parents may just increase misery for the 40 per cent not in paid work.
Correcting the inequity between the 40,000 sole parents put onto Newstart after 2006 and the 100,000-odd “grandfathered” is another of the Government's justifications for shifting the rest onto the lesser payment. It's a strange idea of equity; as the Government's own data shows, those already on Newstart are less likely to be in paid work. The truly equitable move would be to fix the 2006 mistake of redefining sole parents of eight year olds as dole bludgers.
What's more, a follow-up report showed that single parents will have to double their working hours in order to make the same amount of income they are now – some equity. The data collected on the cuts, and later released by the Government, has also been described by sole parents' groups as selective.
In order to work out who had increased their participation and to what degree, I went searching for the data, but the only available figures online were similar stats from last year's Senate Estimates. The numbers showed how many sole parents were expected to move onto Newstart on January 1 2013 — and their employment status.
I compared them to the figures from The Australian, as they seemed to cover the same groups. I used them in a draft media release, distributed before the Women's Electoral Lobby meeting. My error in assuming the populations were comparable had a useful result: a very quick response from Bill Shorten’s office with much more useful figures.
My main criticism of the Government’s claim was that the 11 per cent rise in the number of sole parents with earnings after January was caused by the Newstart move. Common sense and my experience as a sole parent made me question the causality; many sole parents are not employed over the Christmas holidays and return to jobs by March/April.
I contend that the 11 per cent rise in participation is mostly explicable by the holiday versus term time factor, as is shown by data in Shorten's office's email to me, which shows comparable figures from 2012. Last year, 5.8 per cent of the extra “grandfathered” parenting payment recipients were earning an income, versus 10.2 per cent this year, a difference of only 4.4 per cent. Given their children are now a year older, and participation rates increase with the ages of children, this may also be a factor. The conclusion I come to is that there is no conclusive trend to show that the “tough love” shift to Newstart was responsible for any significant increase in working sole parents.
The figures available to us are limited (and a bit suspect). It is unacceptable for the government to claim that such data show “unambiguous … positive shifts in unemployment participation”. All we know is that an additional 3861 sole parents reported earnings after the school holidays finished. That's a meagre result in the grand scheme of things.
With 63,254 single principal carer parents being transitioned to Newstart, a few hundred finding jobs isn't a great success. Supporting those sole parents to help raise their children to be healthy, happy and successful people would be.
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