Work For The Dole Doesn't Work And Never Has


You’ve got to hand it to the Abbott government: it really knows how to grind an ideological axe.

That’s the only way to describe today’s announcement that Work for the Dole will be expanded and toughened yet again.

Work for the Dole doesn’t work, and the government knows its doesn’t work. But the imagery of punishing dole bludgers is far more important than the facts on the ground.

Once upon a time, Australia’s welfare system enjoyed little in the way of government regulation. If you were looking for work, and could satisfy a few simple tests, you could access unemployment support.

The system went hand-in-hand with a commitment by post-war Australian governments to full employment, supported by deficit spending, a strong public sector and high tariff walls.

As the post-war economic consensus collapsed in the stagflation of the 1970s, Australian governments responded by dismantling that system.

The tariff barriers were removed, the economy was opened to global competition, and ordinary citizens were increasingly told that they were responsible for their own fates.

Instead of the government committing to full employment and guaranteeing a basic income for those that couldn’t find work, jobseekers were told that they would have to earn their dole. The shift first began in the Hawke-Keating government, and has been gathering steam ever since.

As Kim Beazley told voters way back in 1994, “we’re moving to a concept of obligation. That is, after a period of time out of work there is an obligation on the government to provide training and work-related opportunities and an obligation on those receiving benefits to take them.”

Ever since, governments of both major parties have been huge fans of the idea. The Howard government turned it into “mutual obligation”, removed the work guarantee, toughened the penalties, and created a whole new industry of employment services providers to administer it.

Over the years, each successive government has strengthened the obligation on jobseekers, and loosed the mutuality. It’s been a slow creep of paternalism, endorsed by both major parties.

It’s a perfect example of the way the two-party system has disenfranchised ordinary citizens in recent decades.

Mutual obligation was extended to other recipients of government benefits, such as parents and those receiving disability pensions.

Then came “income management”, in which the government started quarantining payments to Indigenous Australians. Then income management was extended to jobseekers.

At every stage, as the government introduced ever more intrusive controls and conditions on welfare payments, the rhetoric has always been contractual.

If you want you taxpayers’ money, the politicians tell us, you’ll have to meet our conditions.

As the University of New South Wales’ Myra Hamilton has shown, the metaphor is about shifting the risk of unemployment and misfortune away from the state, and onto the individual

Assistant Employment Minister Luke Hartsuyker was trotting the tired old metaphor out today. “It's not unreasonable to expect job seekers to be out there looking for work, every working day.”

You can see what he’s hinting at here: jobseekers are dole bludgers. They should be out there looking for work, every day.

The framing device of a contract allows politicians to paint welfare recipients as victims of their own behaviour: of laziness, or lack of initiative, or a desire to rort.

And that’s where the contract metaphor breaks down. As anyone who’s ever sat in a Centrelink will realise, welfare payments are not contracts in any normal sense of the word.

Welfare is a payment from a government to its citizens, not a contract in the marketplace, freely negotiated between two parties.

The government is not bound to keep its side of the bargain. It can change the welfare rules whenever it likes.

This happens all the time. When Julia Gillard kicked approximately 80,000 sole parents off their parenting payment and onto unemployment benefits – a much lower payment rate – she justified it with the language of getting more women into the workforce.

Gillard argued that the lower payment was an incentive for sole parents to go out and find work.

But the parenting payment wasn’t originally intended to support jobseekers. It was created to support parents to look after their kids.

And thus, with essentially no consultation, tens of thousands of Australian citizens were told the government would pay them $150 less a month. Some contract.

Try telling your bank or your landlord that you’re going to pay $150 less on next month’s rent or mortgage, and see how far you get.

Nowadays the very term “mutual obligation” is an oxymoron. It’s pretty much just obligation, plain and simple.

The farce reached its low point in the May budget, when Joe Hockey and Mathias Cormann announced that jobseekers under 30 would get no unemployment benefit at all for six months. But they’d still have to fulfill their obligations. Not much mutuality there.

And still the drumbeat of obligation beats on. We’re reaching the point where nearly everyone who receives a government payment will be enmeshed in the netherworld of mutual obligation.

It’s all a giant lie. Can anyone seriously apply, in a meaningful way, for 40 jobs a month?

The small business lobby is already complaining about the avalanche of meaningless resumes that flood the inboxes of small businesses.

The arbitrary nature of the target tells you all you need to know: it’s not about helping jobseekers to look for work. Rather, it’s about punishing them with meaningless paperwork to justify their mendicant status. 

When looking for work, most recruitment specialists advise you to take the opposite approach: focus on a few jobs that you are well suited for, and put all your energies into landing one.

The real welfare rorters are elsewhere: in the vast system of job service providers that manage and control the armies of jobseekers.

At any one time, between 700,000 and 800,000 Australians are enrolled. The revenue for job service providers comes almost entirely from the taxpayer.

And there’s a lot of it: more than $5 billion from the Commonwealth in the next three years.

What do job service providers do for their taxpayers money? Some of them do nothing at all.

A 2012 investigation found anomalies of as much as $106 million in fraudulent claims.

Despite all the money spent, there is little real evidence that tougher mutual obligation rules, or the jobs services industry in general, actually helps lower the unemployment rate.

A 2004 study by Melbourne University economists Jeff Borland and Yi-Ping Tseng found that work for the dole actually hindered job seekers seeking employment. 

Economists generally agree that what drives employment is economic growth. One of the most famous graphs in economics is the Beveridge Curve, which simply says that unemployment decreases as job vacancies increase.

Buried deep inside the latest audit of the job services system by the Australian National Audit Office is a devastating assessment of the entire work for the dole policy.

“The department has not assessed the contribution of the expenditure on Job Services Australia in achieving the desired program outcomes,” the Audit Office states.

The main reason? Because every jobseeker has to be in the system to get their payment, there is no control group against which to compare.

That’s not stopping the Abbott government. It’s not even waiting for the results of its own work for the dole trials, announced earlier this year.

“We don't want to be waiting forever to implement these important changes,” Minister Hartsuyker said today.

Hartsuyker is right: the government is not waiting. It is moving forward quickly with its project to dismantle Australia’s welfare state.

Ben Eltham is New Matilda's National Affairs Correspondent.