Recently, there’s been a lot of discussion surrounding the Coalition proposal to bring back a compulsory Work For The Dole (WFTD) scheme in order to discourage the long term unemployed.
However, as usually happens when the news cycle turns to unemployment benefits, I find myself playing what I like to call Welfare State Bingo.
"Middle Class Welfare", "Culture of Dependency" and "Runaway Budget" are classics, but the perennial favourite, "Dole Bludger", is essential to our perceptions of public expenditure.
It conjures up images that we’re all familiar with: young men who spend more time surfing or doing bong hits than they do in job interviews; teenage mothers in ugg boots with a child on one hip and a pack Winnie Blues in her back pocket; large groups of bludgers sitting around spending taxpayer money on wide screen TVs and tinnies of VB.
The noted Cambridge economist Ha-Joon Chang termed this problem the “Myth of the Lazy Mob”, a conception of the poor as being essentially feckless, lazy, slovenly and lush.
These assumptions are not just espoused by our esteemed Members of Parliament come election time, they’re reflected in our private conversations. I remember a particularly vivid interaction with a friend that started as a simple discussion regarding governmental spending, and quickly devolved into the fact that she saw no justice in the redistribution system.
She never received anything from the government (on account of her parents’ mining wealth), she still had to work for her money while completing her degree, and she saw hundreds of other students "bludge off of government money and not turn up to classes".
Our perception of taxation is disconnected from reality. As the Per Capita Tax Survey of 2012 noted, it is perception rather than fact that drives attitudes towards tax, and 60 per cent of us think we're an overtaxed society, despite ranking 29 out of the 34 OECD economies in terms of tax burden.
Similarly, the complex nature of taxation and public spending is one that is grossly misunderstood. According to the OECD, we spend approximately 8.1 per cent of national income on cash benefits for the unemployed, or 0.5 per cent of GDP. The vast majority of social policy expenditure is actually in old age pensions, an area where, traditionally, people feel less comfortable arguing for spending cuts.
Yet "dole bludgers" are seen as a greater threat to our economic future than tax dodgers, who are estimated to hold up to US$20 trillion dollars worldwide in unregulated tax havens.
In fact, the total number of people claiming Newstart or Youth Allowance is roughly 691,771, or 3 per cent of the Australian population.
Furthermore, just under half of those who receive benefits do so for less than 12 months. The rest are in stages of transition between jobs, or between education and employment, which (for those playing at home) is exactly what welfare is for.
There are a few features of the Coalition's proposed WFTD program that directly undermine this purpose. Firstly, the proposal that it becomes compulsory after six months. There is a reason why every economic and statistical body divide unemployment figures into those who have been unemployed for more or less than 12 months: it’s pretty common for it to take about a year to transition between jobs, or between university and employment.
The fluidity of the labour market, which the Coalition is so fond of fighting for, creates exactly this kind of instability for the unemployed. Without appropriate support for up- or re-skilling, training, or job creation, said fluid only runs in one direction. And for the unemployed it’s usually upstream and doesn’t come with a paddle.
Secondly, the fact that the Wage Connect program is almost twice as effective according to the Australian Council of Social Services. As ACOSS policy director Jacqueline Phillips noted, ''nearly half the participants in Wage Connect were in paid employment at the end of the six-month program", compared to the third who were still employed after a WFTD payment.
While I do appreciate that the government is also using “carrot” techniques, such as offering those long term unemployed under 30 a bonus payment for staying in employment for more than 12 months, I am alarmed to see that Wage Connect (a program which actually eases transition back into the workforce) has been suspended.
Finally, what concerns me most is the simple fact that the government is effectively using the dole to fill council jobs and avoid paying the appropriate minimum wage. The entire logic behind having an award system is that an independent commission determines the appropriate legal minimum remuneration for the types of work associated with each industry.
By instigating WFTD, the government is undercutting the legislation with people desperate for paid work. Whether the government is doing this knowingly or unknowingly, I’ll leave to you to decide.
The above aside, the WFTD program does not have to be a bad thing. If it were a voluntary program that was available from 6 months, and if Newstart payments were topped up to the appropriate award, it wouldn't be so bad.
However, it would be preferable to expand more efficient and effective programs like Wage Connect, fund training for qualifications in Aged Care and other growing industries, or (perhaps more radically) just offer those council jobs directly to the long-term unemployed through Centrelink with a proper workplace agreement.
Ultimately, I would be happy to see any reform that doesn’t rely on our perceptions of welfare recipients as greedy, feckless, and lazy.
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