Is Anyone Thinking Seriously About Welfare?


Yesterday The Australian published a classic pre-budget leak: “Labor to unveil $300m deal to soften the welfare blow”. Treasurer Wayne Swan will today announce three major changes to the welfare system:

“The government has agreed to increase the amount people are able to earn before payments are affected, provide extra assistance to undertake study and training for single parents, and extend access to the Pensioner Concession Card.”

This minor extension of the scheme does not seriously address the problems of either the 60,000 plus sole parents recently transferred to Newstart, or the rest of the 600,000 already on this inadequate payment. Minister for Employment Bill Shorten, who calls it a “a sensible measure”, fails to acknowledge that Newstart covers many other reasons for not being able to do paid work – and as a result thousands of people who are not job seekers are deliberately being kept poor. By “prioritising” paid work, Shorten is either lying or doesn’t understand his own DEEWR data.

About half of all Newstart recipients are not even registered as job seekers. They have legitimate reasons for not being in paid work: including being trained, volunteering, providing for particular care needs of children or others, dealing with their own health issues – for example, cancer or mental health problems – being in court or many other reasons.

The 300,000 already looking for jobs are competing with at least as many more who are not on benefits – for maybe 150,000 vacancies. The Newstart recipients include 65 per cent who have been looking for work for more than a year. Often because employers' hidden prejudices – age, disabilities or other characteristics, including their time out of paid work – means they are unlikely to get hired, or even interviewed. I met one person last week who had three interviews from 500 applications and was still unemployed, despite relevant qualifications.

The very limited changes on offer are inadequate – and insulting. The extra earnings allowed will net around $19 per fortnight, less than an hour’s pay each week and much less than the sole parents were earning before they were moved, leaving very little to pay for things like haircuts, phone bills and the like. The Parenting Payment was around $683.50 a fortnight, which dropped to $537.80 a fortnight, and recipients could earn $176.60 before the taper cut in. With the current changes they've lost around $100 per week allowable earnings – an extra hour of work doesn't cut it.

If the incentive really is to make paid work a priority, the more generous Parenting Payment seems to provide a greater incentive than the tighter Newstart benefit. Some 60 per cent of sole parents had additional paid work income when transferred, compared with only 20 per cent of Newstart recipients. Cutting the value of extra earnings seems to be a perverse disincentive rather than encouraging people into paid work. The government admits this change will only help about 150,000 of the 800,000 plus recipients of these payments, leaving many transferred sole parents still worse off than before.

Other changes proposed are welcome, if belated and still mean. Single parents will again be eligible for the payment they lost on transfer, if they study while on the dole. The package also extends single parents’ access to the Pensioner Concession Card for 12 weeks if they lose their eligibility for any form of income support. This will start next January for next year's batch of around 2000 sole parents. They will be taken off the Parenting Payment and will earn too much to be eligible for Newstart, but still be on a very low income. They will have a brief time to get bulk-billed GP appointments and fill up on lower cost prescription drugs. 

These changes are minor sops to assuage the anger of backbenchers who have to encounter deeply distressed sole parents. But they fail to deal with the substantive issues. There is no serious thinking going on in government about the levels of support we offer those who have limited access to paid work; sole parents are but one example. They already have one job – their children’s needs. These do not diminish sufficiently between the ages of six and eight to easily fit the needs of the workplace. The Gillard Government's position on welfare ignores the diversity of children’s needs, a lack of workplace flexibility, and inadequate services. Ignoring parenting demands is basically sexist; it assumes these responsibilities are less important than paid work.

People struggle to find employment for a multitude of reasons. Mostly these are structural and not the fault of job seekers or other non-employed people. It is wrong to use Newstart recipients to beat up public ire at “dole bludgers”, to gain political kudos for being tough. To ignore the campaign for a modest rise in the basic Newstart payment, supported across the board politically, undermines trust in our political system and our ability to make compassionate policy. But it hits Labor hardest, because it calls into question what “Labor values” really are.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.