|Webdiary - Independent, Ethical, Accountable and Transparent|
Howard's boomtime benefit cuts for disabled and single parents
The 'Welfare to Work' package is a fraud buried by the tactic of announcing broad policy and waiting till the debate dies down before producing an enormous piece of legislation, allowing virtually no time for Senate inquiry and input from the people, and slamming it through Parliament without proper debate. With terror and IR dominating discussion, disadvantaged Australians and their children have been left voiceless. Webdiary broke the story that when the government refused to say how single parents and people on disabilities would be affected income wise by the changes, women's groups across the country scrabbled together the money to get quality reasearch done by NATSEM. The Government's response was to threaten to cut the funding of the women's groups involved.
The PM refused to answer the Law Council of Australia's letter on terror, or Liberal MP Judi Moylan's letter asking why incomes would be cut quite drastically for people on disabliity and single parent pensions. Labor has not helped the cause by leaving all the work to Senator Penny Wong, shadow minister for employment and workforce participation. Where were the voices of Beazley, Swan and Macklin to back her up? And where were the tough questions by the media, which has let the Government sail through this debate without even admitting what it's really doing.
I recently asked my cleaner, who has three young children and a big mortgage after a property settlement with her ex-husband, what she thought of the changes. They didn't understand the lot of a single parent, she said. If your child is sick or in trouble you have to walk out of your job and tend to them. There's noone else. So what regular job could she get? A few years ago the government was telling women to go forth and multiply, she said, and wealthy families got big subsidies for one partner to stay at home to look after their kids full time while kids with one parent were now being told to do without her full time care. That's what she thought.
Here is the speech on the changes Penny Wong has just given in the Senate.
What's the link, I wonder, between this package and IR? The government says there is none...
Labor believes that people who can work, should work. And those who can't, we should care for. Everyone benefits when more people can participate in the social and economic mainstream. Work is one of those essential things, like family and friends, that gives meaning to our lives. That's why Australia needs real welfare reform.
But contrary to its name, this Bill doesn't move people from welfare to work. It just dumps people from one welfare payment, to a lower welfare payment. These laws are the final stage of Prime Minister's tired old dreams becoming the new Australian nightmare. These laws allow the creation of a working poor in Australia; they force people to take jobs with low pay, bad conditions and no security. They remove the protection that jobless Australians have had from exploitation. They say, if you are unemployed, you can be paid dirt or get nothing at all.
With these laws, the Prime Minister has recast Australia with American dye. With its fixation on ideological obsessions, the Howard Government is redrawing Australia in the American social model, where violence has replaced justice; where communities have become gangs and neighbours are enemies. This is what happens when you tear at a social fabric, when you assign moral failure to the vulnerable. When you say that people who are struggling are lazy or morally defective.
This is what happens when people are forced to fight each other for the basic necessities of life. In America, the social security system offers virtually no financial security for the jobless. The result is an army of working poor that competes in a no-win race to the bottom, for low paid work. In America, the result is that you can be employed and still homeless. It means you can be employed and unable to feed your family. The result is social instability. People need to eat, people need security, and if they can't get that from work they will look for other means.
The Howard Government does not believe in fairness. We saw that last week, when they refused to allow the word 'fair' to be among the objectives of into the industrial relations system. We see it in this Bill, where protections from poverty and exploitation are deleted.
Australians have always understood that not only do we care about ourselves, not only do we have a belief in ourselves, not only do we have a desire to live in dignity ourselves, but we also want the same for each other. We believe in each other's worth; we believe in our neighbour's right to live in dignity. Under the Howard Government, the iconic Australian value of fairness will become an historical footnote.
The Bill is littered with flaws, but I will limit myself to the most grotesque flaws that render these laws un-Australian and unacceptable.
The cold heart of the Howard Government's changes to welfare is a cut to income support for vulnerable Australians. People who would have been eligible for the Parenting Payment or the Disability Support Pension will instead be dumped onto the dole. The dole is not adequate to meet the basic needs of either of these groups.
The Bill will abolish Parenting Payment for sole parents with a youngest child aged 8 or more and for partnered parents with a youngest child aged 6 or more (the cut-off age is currently 16). Existing recipients at 1 July 2006 will stay on Parenting Payment unless their relationship status changes or they leave the pension for 12 weeks or more.
And it will abolish Disability Support Pension for people with a 'partial capacity,' that is who could work 15 hours or more (currently 30), or who could be expected to be able to work at that level within 2 years, with or without rehabilitation, training or education. Existing recipients at 11 May 2005 remain qualified, those granted between 11 May 2005 and 30 June 2006 will be reviewed.
The basic cut to the money in people’s pockets is bad enough – around $20 a week cut for single parent families and around $40 a week cut for people with a disability. From July 1 next year, many people who would have received the Disability Support Pension or the Single Parenting Payment will instead be dumped onto Newstart, what most people call the dole.
By 2008-2009, according to the Government's own figures, 60,000 people with a disability who would have received the DSP will instead receive the dole, as will 77,000 single parents who would have received the Parenting Payment. Not only does the dole provide less money for these vulnerable Australians, who have many additional expenses associated with their circumstances, it has a lower 'free' area, has higher withdrawal rates and harsher tax treatment than both the Disability Pension and the Single Parenting Payment. That means that when they get dumped onto the dole, they will get to keep less of each dollar they earn.
The National Centre for Social and Economic Modelling recently undertook modelling research on these changes. According to their research, which the Government has not been able to refute, if a sole parent with one child does the right thing, and works fifteen hours a week, they will only keep $81 of their earnings, while John Howard claws back the other $114 in tax and loss of social security payments.
That makes such a parent $91 per week worse off by moving into work under these changes than if they moved into work under current arrangements. The Howard Government is effectively asking sole parents to work for a return of $3.88 an hour, because for their 15 hours work a week they are only $58 ahead of someone not working. And that's before they pay for the costs of work, the travel, the clothing, the care for their children.
The absurdity is highlighted for a single parent who receives Parenting Payment and works part-time. Without changing her rosters or earnings, she suddenly ends up working for less return, just because her youngest child has turned eight! Just because she gets dumped onto the dole and has to give more of her earnings back to the Government.
The Senate Inquiry heard a case study of how these changes would punish people for working more: Sally and Claire are in identical situations. They share a house and both have a seven year old daughter. They receive Parenting Payment (Single) and work fifteen hours a week in a minimum wage job at the local childcare centre, earning $200 a week in private income, with total income of $390 a week from both PPS and work. In July 2006, Claire picks up additional hours at the childcare centre, and as a result of the additional income, her Parenting Payment Single is cancelled. In November 2006, the childcare centre downsizes and Claire's hours are reduced back to fifteen hours a week. Under the proposed legislation, Parenting Payment will be abolished for new applicants whose children are over eight from 1 July 2006, and the lower Newstart allowance payment rate and harsher income test will apply. As a result, Claire will receive only $322 a week - $68 a week less than Sally.
Two sole parents in identical situations will receive different amounts of financial support to look after identical families. One will receive around 16% less income than before the changes because she accepted additional work which only lasted five months (ie more than the twelve week gap before payment is cancelled).
For people with a disability, the situation is even worse, because the DSP is not taxable but the dole is. According to NATSEM, if a person with a disability works fifteen hours a week at the minimum wage, they keep only 25 cents of every dollar they earn, while John Howard takes back the other 75 cents. That makes such a person $122 per week worse off by moving into work under these changes than if they moved into work under current arrangements.
The Howard Government is effectively asking people with a disability to work for a return of $2.27 an hour. Again, that's before the costs of work are taken into account. People could very easily end up paying to work under these changes. What greater symbol of incompetence could there be, than promising welfare reform but delivering a policy that makes work less financially attractive than welfare.
The Howard Government has failed to provide a scrap of evidence that moving people onto the dole will help them get a job. No modelling, no relevant international studies, nothing. They just keep repeating themselves, saying 'welfare to work, welfare to work' as if spellbound in a mantra. They just return to their rain dance, waiting for job opportunities to shower down on people. Another flashing, fluorescent beacon of the Howard Government's incompetence is their failure to match the hundreds of thousands of jobless Australians with the jobs that exist now in the labour market.
How many times do we need to be told that Australia faces a skills crisis before the Howard Government acts?
You don't solve the skills crisis by dumping people onto the dole. But you certainly don't solve the skills crisis by making it harder for jobless Australians to train – which is what these changes will do. The Pensioner Education Supplement is what enabled pensioners – including people with a disability and single parents – to help cover the costs of education, so they could get the skills they needed to get a job.
But these changes slam that
And what if you're dumped onto the dole and you want to
study part-time? Forget it. Say you're a single parent and you want to become a
nurse. You either study full-time while trying to feed your family on Austudy,
or you allow the Howard Government's new Australian nightmare to crush your
Recently I spoke at the national conference of the National Council for Single Mothers and their Children, where I encountered a remarkable mother. Tania is a single mother who has tried desperately to get herself an education so she can better look after her two young children. While she is completing her Honours year, she is also tutoring students and marking papers. And she collects plastic bottles to help make ends meet.
Tania later wrote to me with her story. She said:
That's the lot of the single mother who's trying to make a go of it. In a shocking indictment of Howard Government policy, listen to how she now feels after spending years trying to gain financial independence:
I would have been wise to stay in government housing, accept welfare, and reject the constant fear, shame and humiliation that haunt me in not knowing if I can pay the rent. Just once it would be nice to let the children buy their lunch at school, take them to the movies occasionally and buy them a brand new pair of shoes. My own radical social experiment failed –my dreams cannot come to fruition under the current circumstances – this can no longer be achieved.
Mothers like Tania will be the first collateral in Howard's ideological war. If the job Tania was offered did not provide pay and conditions that enabled her to support her family adequately, too bad. She would have to take it or lose income support for eight weeks. Eight weeks!
The same penalty would apply if Tania were dismissed from her job. If Tania were dismissed for misconduct; even if this was unfair, she faces losing eight weeks of income support.
As an acknowledgement of their own policy dysfunction, the Government has conceded that Centrelink will step in and provide emergency relief for these families. That's what Australian social security is being reduced to – bureaucrats buying food for children because their parents don't have the money!
But what costs will Centrelink cover? Rent? Maybe. Clothing? Possibly. School excursions for the children? Sporting activities? Maths tutoring? Families like Tania will be the first collateral in John Howard's ideological war. But they won't be alone for long.
I have confined myself to the larger of the two Bills that are before the Senate. Senator Evans will cover the Family and Community Services Amendment. The Government will shortly ram this legislation through the Parliament, legislation that pushes people who are struggling, right over the edge.
There is no evidence to justify dumping people onto lower support payments. But evidence doesn't mean anything to a Government that is out of control, intent on lowering the living standards of Australians, starting with the most vulnerable.
Australia needs welfare reform but the last thing Australia needs are these extreme and incompetent changes, masquerading as welfare reform. Australia needs real welfare reform that tackles the reason someone isn't working and delivers practical solutions. Australia needs real welfare reform, which is why Labor opposes the Employment and Workplace Relations Legislation Amendment Bill. I move the Second Reading Amendment being circulated in my name.
[ category: ]