WHEN a government agency tasked with assisting some of the most vulnerable Australians is reduced to suggesting on Twitter that clients seek help via Lifeline, perhaps it is time to acknowledge there might be a problem.
In recent weeks Centrelink has been deluged with thousands of angry and frightened social security recipients who received letters informing them they need to repay, in some cases, thousands dollars in alleged overpayments.
This, according to Human Services Minister Alan Tudge, is all about “strengthening the integrity of the welfare system by cracking down on fraud and overpayments”.
That premise is something no reasonable Australian would disagree with. Quite simply, anyone caught rorting the system should be forced to repay money owing, and possibly face additional penalties depending on the scale of any deliberate fraud.
The problem is that there is mounting evidence that thousands of innocent Australians are being informed they are liable for debts that don’t exist due to issues with Centrelink’s now automated compliance system. One key issue relates to a data matching system Centrelink is now using to marry its information with that held by the Australian Taxation Office and other agencies.
In some cases this system is incorrectly concluding a person was working two jobs when they had only declared one, perhaps due to a minor paperwork discrepancy. In others, where a person may have been unemployed for a period and receiving Newstart, the system is then averaging wages earned over the remainder of the year over the whole 12 months – including the period when no or little work was undertaken.
The compliance exercise is sending out tens of thousands of letters a month, and according to Human Services general manager Hank Jongen, has so far found $300 million in overpayments.
While the majority of these assessments may ultimately prove correct, there is still an alarming number of cases where the system appears to have failed completely. For people caught in this position, the situation is made worse by the onus of proof being reversed in terms of demonstrating that they don’t have a liability, as opposed to Centrelink proving that they do.
Clients are also reporting chronic problems with Centrelink’s website and difficulty accessing staff by telephone, all of which can add up to considerable stress and anxiety for people who, in many cases, may be guilty of nothing more than a clerical error or a victim of a Centrelink software oversight.
The whole mess is reminiscent of Queensland Health’s automated payroll debacle a few years ago, a shemozzle that ended up costing about $1.2 billion to fix.
While the affair has been referred to the Commonwealth Ombudsman for investigation, this process will take time.
In the interim the Government needs to actually admit there are real problems with the new system, and suspend it until it can guarantee what are serious flaws have been rectified.
Minister for Employment & Workplace Relations, Bill Shorten. Picture: Aaron Francis
EMPLOYMENT Minister Bill Shorten has backed a controversial argument being put by his senior mandarins that the dole should be kept low to encourage the unemployed to take badly paid jobs.
A submission from four federal departments to a Senate inquiry into the Newstart Allowance says the OECD acknowledges that a rise in the base rate from $245 a week “has the distinct disadvantage of reducing employment incentives, especially for those who can only obtain low-paying employment”.
A spokesman for Mr Shorten said: “The submission is obviously the government’s position” despite it previously saying it had a more open mind. “I’d also point you to what the minister had to say about this to you on Sky Agenda at the end of last month.”
In the interview, Mr Shorten said he wanted to look at what could be done to break intergenerational cycles of long-term unemployment. “Intergenerational unemployment is a disaster for generations of people.
“But by the same token, I am fully aware that trying to get along on $249 a week is an incredibly difficult ask.”
Mr Shorten is coming under pressure from the union movement to overhaul the welfare system. The ACTU will today declare major reform of the income support system is vital to help unemployed people find decent, secure work. ACTU president Ged Kearney said reform must start with a $50-a-week rise to Newstart, which had not increased in real terms since the early 1990s and was barely enough to live on, let alone pay for the costs of finding a decent job. “The rate . . . is just 18 per cent of average wages . . . and is widely regarded as a major cause of entrenching people in long-term poverty, with insecure work playing a large role,” she said.
The ACTU wants Newstart raised to the level at which the payment starts to be withdrawn when people begin work, and a wider independent inquiry into the effects of insecure work on welfare.
Unions NSW has called for the Youth Allowance to be increased by $50 a week and indexed in line with pension payments. It wants the income threshold to be increased by $25 a week, allowing Youth Allowance recipients to earn $450 a fortnight before their payments are reduced. The government submission claims an increase to the dole would not assist in maintaining the “fundamental character of Newstart Allowance as a payment that predominantly supports work re-engagement”.
“Work incentives are built into the design of Newstart Allowance and a substantial increase in Newstart payment rates would reduce the incentive for some recipients to move off payment and into self-supporting work”.
The Senate inquiry follows lobbying by business and welfare to increase Newstart, as single mothers face losing an average $50 a week after being shifted from the parenting payment to the dole from January.
The joint submission — from the Department of Education, Employment and Workplace Relations, the Department of Families, the Department of Human Services and the Department of Industry — seeks to blunt support for a $50-a-week rise to the dole.
Peter Whiteford of the Crawford School of Public Policy at the Australian National University argues that since 1996 payments for the single unemployed have fallen from 23.5 per cent of the average wage for males to 19.5 per cent.
One of the first legislative acts of the Whitlam government in 1973 was to increase social security benefits.
On February 28, 1973, the Minister for Social Security, Bill Hayden, introduced the Social Services Bill 1973 into the House of Representatives.
The bill sought to increase all pensions and unemployment and sickness benefits by amounts ranging from $1.50 to $14.00 a week. Hayden said the cost of the measures would be $126 million in a full year.
This is Social Security Minister Bill Hayden’s Second Reading Speech on the Social Services Bill 1973.
Mr HAYDEN (Oxley) (Minister for Social Security) – I move:
That the Bill be now read a second time.
The Bill provides for generous increases in all pensions and in unemployment and sickness benefits by amounts ranging from $1.50 a week to $14 a week. Furthermore it provides for payment of the pension increases to be made retrospectively from and including the first pay day for each category of pension occurring after the election of this Government. The cost of these proposals, and others benefiting dependants which I shall outline a little later, will be $126m in a full year and $66.2m for this financial year.
This Bill provides a common benefit rate for all pensions and for unemployment and sickness benefits of $21.50 a week standard rate and $37.50 a week married rate. In doing this it removes several seriously unjust, penalising anomalies. This Bill has promptly honoured the undertaking of the Prime Minister made when he delivered the policy speech of the Australian Labor Party. He said then:
“The basic pension rate will no longer be tied to the financial and political considerations of annual Budgets. All pensions will be immediately raised by $1.50 and thereafter, every Spring and every Autumn, the basic pension rate will be raised by $1.50 until it reaches 25 per cent of average weekly male earnings. It will never be allowed to fall below that level.”
The Bill does more than give effect to the undertaking to increase immediately the basic rate of all pensions by $1.50 a week. In setting common benefit rates for all pensions and for unemployment and sickness benefits we have largely established the principle that common needs deserve common rates of benefit.
We still have some way to go before we fully realise this objective. In the near future I hope to be making further statements on behalf of the Government outlining additional steps which will be undertaken to realise fully this objective. In the meantime the goal already achieved is an extremely important one; it represents a great advance in social values and the appreciation of human worth. Moreover it locks into an ongoing programme whereby benefit rates will be automatically adjusted twice a year until they reach 25 per cent of average weekly earnings. Thereafter there will be regular automatic increases to retain this relationship to average weekly earnings. But more on this later.
It is worth noting some of the more objectionable forms of discrimination which will be eliminated by this Bill. For instance we have removed the long-standing, irritating penalty against the class B and C widows who were deemed eligible for widows pension but paid $2.75 a week less than a class A widows pension. We have ended the punishing meanness with which unemployment and sickness benefits have been paid. A man supporting a wife and 2 children, drawing unemployment benefit and even after allowing for child endowment, has been paid a benefit rate some $17 a week below the updated Melbourne University poverty line. There will be no more of this poor-house, alms-giving mentality which sees merit in official meanness and virtue in suffering, as long as it is in others.
The bulk of the unemployed today are the innocent social casualties of the disastrous economic policies of the last Government and its 1971 Budget. These people and their unhappy families neither sought to be, nor wish to remain, among the ranks of the unemployed. The need they suffer as a result of the meanness of unemployment benefit rates and the humiliation they suffer from unwanted unemployment are the penalty visited on them by the blundering economic policies of the last Government. One of the most objectionable aspects of the practices of the previous Government was the complete denial of any benefit at all for dependent full time student children over 16 years of an unemployment or sickness beneficiary. We have ended this injustice practiced by mean men for too long. Henceforth these student children will attract full benefit rights irrespective of age.
In view of the insignificant cost of this proposal – $600,000 in a full year and $200,000 for the remainder of this year – the dogged persistence with which previous governments have clung to this practice of denying and depriving the dependent student children of the needy unemployed is beyond any reasonable comprehension. Unfortunately some people in the community worry that a modest rate of unemployment benefits, as we propose, will destroy the industry and moral fibre of the nation. Given the fact that the weekly rate of benefit of $21.50 for a full week is much less than a great many business representatives pay for a single meal with a client – largely at taxpayers’ expense, of course – I doubt that anyone drawing benefits will be corrupted by any new found lavishness in his life style. Unemployment benefits do not pander to lazy layabouts. The work test administered by the Department of Labour through its employment offices effectively controls the work-shy.
For those most tragic social casualties – the homeless drifting males (and sometimes females) undermined by an unstable personality and reinforced in their sense of failure and worthlessness by their peer group and the insulation an aspiring middle class society tends to set between itself and these people – we are doing something positive right now. For too long attitudes to these people have been negative and repressive. Society has been prepared to outlay large amounts of money for its police, courts and prisons to repress these people. Considerably less money spent on rehabilitation and social aid programmes will provide greater benefit for society. It is this positive role which we now stress. A working party of top social welfare administrators and other experts has been appointed by this Government to investigate and report on a suitable programme.
We are genuinely committed to a belief in the supreme importance of human worth, the individual’s entitlement to treatment with dignity and his right to self respect.
I will now outline the main provisions of the Bill before the House. The standard rate of pension for aged persons, invalids and widows with children is to be. increased by $1.50 a week to $21.50 a week. As I have just mentioned, the standard rate will also apply to widow pensioners without children in future, which means that these women will receive increases of $4.25 a week. The married rate of pension is to be increased by $3 a week to $37.50 a week, that is, increased by $1.50 a week to $18.75 a week, for each partner. The age limit of 21 years for the payment of additional age, invalid or widow’s pension for full-time student children as well as the additional guardian’s or mother’s allowance, as appropriate where the standard rate applies, will be removed. Payment of additional pension for full-time students together with mother’s or guardian’s allowance, if applicable, will continue without regard to the child’s age until either eligibility for pension ceases or the child’s studies cease. Unemployment or sickness benefit received by a spouse will be exempt for the purpose of calculating age or invalid pension. Unemployment benefit rates and also sickness benefit rates where payment has not been made for a continuous period of more than 6 weeks are to be increased by $14 a week to $21.50 a week for unmarried persons 16 to 17 years of age, by $10.50 a week to $21.50 a week for unmarried persons 18 to 20 years of age, by $4.50 a week to $21.50 a week for unmarried adults and unmarried minors with no parent living in Australia and by $12.50 a week to $37.50 a week for married beneficiaries whose wives are dependent upon them.
Sickness benefit rates where payment has been made for a continuous period of more than 6 weeks will be increased by $8.50 a week to $21.50 a week for unmarried persons 16 to 20 years of age, by $1.50 a week to $21.50 a week for unmarried adults and unmarried minors with no parent living in Australia and by $9.50 a week to $37.50 a week for married beneficiaries whose wives are dependent upon them. The age limit of 16 years for the payment of additional unemployment or sickness benefit in respect of a child will be removed where the child is engaged in full-time studies. Payment will therefore be continued without regard to the child’s age until either eligibility for benefit ceases or the child’s studies cease. Any age or invalid pension received by a spouse will be exempt for the purpose of calculating the amount of unemployment or sickness benefit payable. I emphasise that these measures represent a first step towards ensuring that social security beneficiaries receive a rightful share of the community’s increasing prosperity.
When defending pension levels in the past, honourable members will recall that the former Government consistently compared increases in the rates of pensions with upward movements in the consumer price index. However, as I have stressed on so many occasions, the relevant comparison to make is to relate pension increases to increases in average weekly earnings; average weekly earnings themselves give a fairly good indication of the average standard of prosperity in the community. I have no wish to draw comparisons between the position as it was over 20 years ago with what it is now but I feel that I should say that, although the Liberal Country Party Government did follow a policy of increasing pensions faster than rises in prices generally and there were some significant increases during their term in office, from about the beginning of the 1950s the pension as a percentage of average weekly earnings dropped quite dramatically and it never fully recovered from that position. This situation will be corrected by this Government. The increase proposed in this Bill lifts the standard rate of pension as a proportion of average weekly earnings to the highest level of any time in the last 6 years. This position will continue to be improved. The following table which I seek leave to incorporate in Hansard gives a comparison of a selection of existing benefit rates and of the rates we are proposing.
A LOOPHOLE in the nation’s $7.5 billion welfare system is letting dolebludgers turn down good job offers without incurring a penalty that was originally designed to suspend their payments for eight weeks every time they did it.
The lazy bludgers are rejecting jobs because “shifts fall on their golf day” or they don’t want “to work hard” or “the office smelt funny”, according to secret documents from the Department of Human Services that have been obtained by The Daily Telegraph.
Newstart Allowance recipients are refusing jobs that pay as much as $27 an hour and are then -successfully requesting a “waiver” so they don’t incur the eight-week -welfare ban.
The waiver allows them to reject a job and continue to receive the dole if they add on a small work-for-the-dole component to their -program.
Last financial year at least 1412 penalties were applied for refusing to accept a job to 1276 job seekers, but only 378 were actually served.
Employment Minister Mic-haelia Cash said yesterday there was a bill before the Senate to ban the waiver loophole but it had stalled.
“There are loopholes in the system that are allowing some to get away with making insufficient or inadequate job search efforts without good reason,” she said.
“This must be stopped.” Ms Cash said the $150 billion annual welfare bill should only be used for those who desperately needed assistance.
“Australia’s income support system is there as a safety net for people who genuinely cannot find a job – not as an option for those who refuse to work,” she said.
“Australians who pay taxes to fund our welfare system expect there to be safeguards to ensure that those who can work do work.”
ONE of Townsville’s biggest job agencies has received dismal ratings in a newly released Department of Employment report card.
Max Employment has received one-star ratings for its Kirwan and Townsville services and two stars for its Aitkenvale operation.
The ratings were revealed in a document outlining the September star ratings of jobactive providers across the country.
Townsville’s other two jobactive providers are NEATO Employment Services and CoAct. NEATO scored five stars at Aitkenvale and Thuringowa Central offices and CoAct received an overall rating of five stars for its Aitkenvale service and four stars each for Thuringowa Central and West End.
A Department of Employment spokesman said sites with higher ratings had achieved higher levels of sustained employment placements for their job seekers, particularly ones that had seen job seekers stay off income support for 26 consecutive weeks.
Sites with higher ratings have also to a greater degree ensured that job seekers have been actively engaged in activities through the Work for the Dole phase.
“The Townsville region is broadly consistent with national performance, having the full range of individual site ratings from one to five stars but the majority receiving three stars or above,” the spokesman said. “As the star ratings methodology is a relative one, there will be some providers which outperform others.
“The public reporting of the star ratings can drive improvements in performance. Job seekers are also able to use star ratings when they choose their jobactive provider.”
The spokesman said guidelines for the jobactive program noted that business re-allocation was based on data from the 18-month mark, to be reached on December 31, 2016.
“The department will look at the full range of factors (including star ratings) in every region in Australia in determining which business will be re-allocated,” he said. “The star ratings are designed to drive performance improvement with providers and we expect that those with one and two star ratings will be looking to improve their performance relative to other providers.”
Max Employment did not respond to requests for comment yesterday.
The ABS unemployment figure, used to direct government policy, ignores hundreds of thousands of jobless Australians.
Aimee Rose, 19, until recently was one of the country’s many hidden jobless.
Sleeping rough on the streets of Adelaide, Aimee Rose didn’t feel like she counted for anything. The Australian Bureau of Statistics (ABS), it seems, was inclined to agree with her.Despite being jobless and periodically homeless for most of her teenage years, Rose did not meet the official definition of what it is to be unemployed.
Deduced from the monthly Labour Force Survey, the unemployment rate represents only the percentage of people “actively” looking for a job in the four weeks leading up to the reference week, and who are available to start work that same week. The survey defines actively looking for work as applying for work, attending job interviews or taking steps to start a business. Checking job advertisements doesn’t count, and nor does hoping for a steady pay cheque while curled up inside a sleeping bag.
First, Rose gave up looking; then she gave up hoping. As far as she could see, it was something of a catch-22 situation.
“Not getting work and not getting housing kind of fed into each other,” she tells The Saturday Paper. “No one wants to hire someone who doesn’t have a home, and it’s hard to get a house without being able to put down any income on the form.”
Also hard was cobbling together enough change to pay for the bus to the library and the fee for printing job applications. The effort hardly seemed worth it given the dearth of employment options open to someone with no qualifications or connections. Increasingly plagued by mental health issues, Rose stopped asking.
Only when the shame she felt about her circumstances overwhelmed her to the point that she attempted to take her own life did the system intervene – the state’s Child and Adolescent Mental Health Service stepping in to provide accommodation and support.
Rose returned to and completed her schooling, and now, aged 19, she is preparing to start her own health and wellbeing business, activity that finally qualifies her as eligible to be counted among the unemployed.
“It makes me feel really annoyed,” she says. “Those statistics are used for allocating budgets and that kind of stuff, and they disregard the most vulnerable members of societies. They are the people that need to be counted the most and whose problems need to be addressed the most.”
The chief executive of the South Australian Council of Social Service, Ross Womersley, says the jobless who don’t qualify as unemployed in a statistical sense are often the hardest to help. Which is exactly the problem.
“We need to acknowledge they exist, and also to acknowledge what needs they have to get back into the employment market,” he says.
“If they’ve fallen out of the system completely, it speaks to something drastic going wrong – poor physical or mental health, limited education – and that kind of person is not necessarily the first candidate employers want to select.”
There are hundreds of thousands of people who have stopped regularly applying for work around Australia, although not all find themselves in quite as difficult a place as Rose did. They are all relevant in regard to the unemployment rate’s core function as an indicator of economic health.
At the other end of the so-called “hidden unemployed” spectrum is 61-year-old Brisbane man Michael Heritage. A recently retrenched pipeline project manager, Heritage, after being rejected for the few roles available in his area of expertise, decided he would rather attempt to ride out the resources sector downturn with his own savings than apply for hospitality and trades jobs each fortnight, as per the expectations of his employment agency.
Then there’s 57-year-old Kat Lee, who lost her Adelaide takeaway business 23 years ago and hasn’t been able to find work since, deciding in recent years to focus her efforts on running a neighbourhood charity instead of firing off unanswered applications.
She characterised the ABS refusing to factor people such as herself into the unemployment rate as underselling the seriousness of the situation.
“It makes people think the problem isn’t as bad as it is, and therefore people are saying, ‘There are jobs out there – why don’t you get a job?’ ” she says.
Heritage and Lee face different circumstances, but what unites them is their shared belief that the unemployment rate is being fudged so those in power can claim they’re doing a good job.
In a statement, the ABS defended the Labour Force Survey by noting it features some of the highest response rates in the world, drawn from a sample size of 26,000 households across Australia, including remote areas, and that methodologies are communicated transparently.
“In the design and management of the Labour Force Survey, the ABS follows international standards, many of which are based on International Labour Organisation resolutions (through the International Conference of Labour Statisticians),” the statement read. “Our methodology can be described as international best practice.”
Gary Morgan disagrees. The executive chairman of Roy Morgan Research wants his simpler method of measuring unemployment to become the national standard, a methodology he is keen to emphasise is based on face-to-face interviews rather than the ABS practice of over-the-phone and online surveys.
“Our definition is pretty simple – if you’re looking for a job and not working, then you’re unemployed,” he says.
“The ABS definition is more complex than that with more conditions, which is why it is miles lower.”
Indeed it is – the Roy Morgan unemployment rate hit 11 per cent in March, well up on the ABS rate of 5.8 per cent.
Morgan is not one to miss an opportunity to stick the boot into rival statisticians, and does so on a monthly basis in the release of his agency’s unemployment figures.
The March numbers were accompanied by observations from Morgan that the ABS has its “head in the sand” and “lacks credibility” given the various job losses taking place across Australia. The latest round includes the 8000 roles in jeopardy as steelmaker Arrium enters administration, the 500 Optus employees facing redundancy nationally, and the closure of electronics retailer Dick Smith and the Masters Home Improvement outlet.
“The major problem facing the Australian economy is that the Turnbull government, like all governments before them, continues to base their economic modelling on the wrong unemployment data, and because of this they will fail to advocate the policy reforms that need to be undertaken to ‘free up’ the Australian economy,” he wrote.
“In addition, by continuing to use ‘wrong data’ there will be a large group of people (unemployed and underemployed) who will be disenfranchised and angry with the government of the day.”
The rise of contract and casual working arrangements has seen the phenomenon of underemployment deservedly placed under the spotlight, but at a time when steelworks and car assembly lines are set for the scrapheap, hidden unemployment is also a growing concern.
John Spoehr, director of the Australian Industrial Transformation Institute at Flinders University, says the decline of manufacturing in particular is a worry.
“Particularly for middle-aged men in manufacturing, historically they find it difficult to transition to alternative work and are more susceptible to giving up,” he says.
“We also know that a high proportion of mature-age workers go on to be long-term unemployed, which we saw in the recessions of the 1980s and 1990s, and which we are likely to see with the closure of the auto and steel industries if that is to happen.”
A source at the ABS joked that perhaps Morgan was being a little ambitious.
“Morgan wants the unemployment numbers to be 11 per cent,” the source said.
“That’s interesting. I wonder whether either of the major political parties would go for that?”
University of Newcastle economics professor William Mitchell, director of the Centre of Full Employment and Equity, says the issue isn’t how the ABS calculates the unemployment rate but what people think it represents and the way in which the media communicate it.
“I think it is fine, but then I know its uses and limitations, and it is grossly misused as an indicator,” he says.
According to Mitchell, the unemployment rate shouldn’t serve as a standalone “headline statistic”, but should be viewed in the context of other ABS numbers such as the economic participation rate (overall number of people employed) and measures of the type of employment, to provide a useful indication of what is happening.
“For instance, if the unemployment rate rises but is accompanied by a rise in the economic participation rate, that’s actually a good thing,” he says.
He refuses to pick a side in Roy Morgan’s crusade against the ABS, arguing that both organisations employ methodologies in regard to unemployment that are useful in their own way, with the ABS’s use of seasonal adjustments valuable for long-term comparisons and Roy Morgan’s rejection of them helpful in communicating exactly what is happening at a given moment.
All well and good, but the ABS unemployment rate continues to stand alone as the most prominent statistic in Australia, echoing across the evening news and political press releases, utterly fundamental to the average citizen’s understanding of how their society is travelling.
An understanding that simply does not extend to Rose and others like her, the hidden jobless lurking somewhere out there in the statistical wilderness.
Wayne Miller and Tracey Cox. Picture: Russell Millard
Mick Haynes leans forward and stares into the eyes of his dead teammates. They gaze back at him, young, strong and proud, their smiles forever frozen in a team photo on the wall of the Koonibba footy club.
“There I am,” says Haynes, pointing to the young bloke sitting in the middle of the Aboriginal team from 1982. His finger then moves slowly over the 20 men in the photo. Dead … Dead … Dead … Haynes looks away and shakes his head. “There’s only about six of us still left,” he says. “In some way or other alcohol contributed to cutting them down.”
Photos of other teams and former players line the walls of the country’s oldest Aboriginal footy club in Ceduna, South Australia. Their surnames — Betts, Davey and Wanganeen — are household names to AFL fans. But the photos inside this proud club also reveal the tragedy of this small town. “If I talk to these boys, they won’t talk back to me — I will be standing on their grave,” says Peter Miller, a tribal elder and former halfback for the Koonibba Roosters in the 1970s. “Lots of them drank pretty heavily — there are only five left from my team.”
Miller adjusts his bush hat and wonders whether much has changed in his hometown since he was a boy, when alcohol abuse was rife. “This morning I saw a girl about 19 years old crossing the road with a bottle of Jack Daniel’s and I said to myself, ‘It’s only bloody 10 o’clock.’ I see it every single day. But you know what? She wouldn’t have been able to buy that bottle if her money was on that card.”
Peter Miller. Picture: Russell Millard
“That card” is now the talk of the town in Ceduna and may soon become the talk of the nation. The 4000 residents of the Ceduna region are the first in Australia to undergo a controversial 12-month trial that Canberra hopes will revolutionise the fight against alcohol abuse by those on welfare in rural and regional Australia, especially among Aboriginal people. If the trial goes well, the card will be rolled out to other regions across the nation.
On March 15, those on welfare in Ceduna — indigenous and non-indigenous — will no longer receive all their benefits in cash. Instead they will be issued a small silver card, similar to a credit card. Eighty per cent of their welfare payments will go onto the card, with only 20 per cent available as cash. The card can be used for anything anywhere in the country with two glaring exceptions — alcohol and gambling.
This will leave most welfare recipients (aged care pensioners are exempt) with only $60 to $150 in cash a week, depending on their circumstance. “It’s so important because in many areas of regional Australia, particularly indigenous areas but not exclusively so, there is very significant alcohol, gambling and drug harm that is paid for by the welfare dollar,” says Alan Tudge, Assistant Minister to the Prime Minister, who has led the Government’s push for the so-called cashless welfare card. “When you’ve got communities that are awash with grog it’s so hard to make progress on any other front.”
In Ceduna the card will apply to around 950 welfare recipients, of whom two-thirds are indigenous, although the Government maintains that the card is not specifically directed at Aboriginal communities. In April it will be trialled for 12 months in the East Kimberley communities of Kununurra and Wyndham and options are being considered for a third site. Another Kimberley community, Halls Creek, rejected the trial, saying the card was indiscriminate in its targeting and would not work.
To its supporters, cashless welfare promises a new era in the fight against welfare abuse by making it much harder to blow welfare payments on grog or gambling. Its critics say it is an overly paternalistic intervention in people’s lives which undermines personal freedoms and is unlikely to achieve its aims. “[It] will disproportionately affect Aboriginal and Torres Strait Islander people and claw back our hard-won rights and freedoms,” says Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda. “Our mob are once again the guinea pigs in a trial program lacking any evidence base.”
Ceduna Mayor Allan Suter. Picture: Russell Millard
Ceduna mayor Allan Suter sits at his dining room table and shakes his head at such claims. He says his town has been in deep trouble for much of the past decade, blighted by alcohol abuse, domestic violence, gambling and more recently the drug ice. “This card,” he says, “is desperately needed by some people, including some who are against it. We have had huge issues in this town with lawlessness, unsociable behaviour, people drinking to excess and dying.” He says Ceduna, which is around 25 per cent indigenous, has 68 times the national average rate of hospitalisation from assaults. In 2014, the town’s sobering-up centre had 4667 admissions from a population of 4000.
In 2011, a coronial inquest into the deaths of six Aboriginal people in Ceduna found a “severe and intractable culture of excessive alcohol consumption” among transient Aborigines who visit from communities to the west of the town, such as Yalata and Oak Valley. Suter says Ceduna has tried everything possible to end the scourge of alcohol abuse, from bans on grog sales to dry areas to safety patrols, but the problem still exists.
Tracey Cox and Wayne Miller. Picture: Russell Millard
“I’ve seen things in Ceduna that I would never want to see,” says Tracey Cox, a 26-year-old indigenous mother of two, speaking at a barbecue at Suter’s home. “I used to work as a domestic violence support worker and I’ve seen first-hand the alcohol and drug use and how the children suffer from it.” Her voice trails off before her fiance Wayne Miller, 26, interjects: “We need to try something now. These same things have been happening for 40 or 50 years, we’ve heard it from our uncles, aunties and parents and we just need to change things. I don’t see why this card won’t work.”
Miller, an up-and-coming indigenous leader, and Suter, mayor for the past eight years, have been targeted because of their role in promoting their hometown for the trial. Suter has been parodied and abused on social media while some other indigenous leaders have accused Miller of seeking to disempower his own people.
Leeroy Bilney. Picture: Russell Millard
“Wayne Miller has great potential to be a good leader but he has been mentored and manipulated in the wrong way,” says Leeroy Bilney, an indigenous local. “We need to give some kind of ownership and responsibility back to our communities and this [card] is no different to listening to my pop talk about how they used to walk around with ration cards.”
The idea of the cashless welfare card was born out of the review of the welfare system in 2014 by mining billionaire Andrew Forrest. The card is far more ambitious and sweeping than previous attempts at income management of welfare recipients in Australia. Since the 2007 intervention in the Northern Territory, successive federal governments have experimented with income management, also known as welfare quarantining, with mixed results. Almost 26,000 people — 20,000 of whom are in the NT — are currently on the BasicsCard in which 50-70 per cent of spending is quarantined for essential items. Ninety per cent of those on the card are indigenous. But the BasicsCard card can only be used at selected retailers, is limited in scope and almost useless outside areas where it has been rolled out. The new cashless welfare card quarantines 80 per cent of payments and is connected to the national EFTPOS system so it will automatically reject attempts to buy alcohol or bets anywhere in the country. The trial does allow welfare recipients to apply to have the percentage of cash lifted from 20 per cent to as high as 50 per cent, but only with the approval of a community panel.
Mick Gooda claims that previous attempts at income management have achieved results that are only “modest compared to their stated objectives”. “For many, income management results in few or no benefits, and a sense of loss of control, shame and unfairness,” he says.
Alan Tudge disputes this. He argues the BasicsCard has had a “positive impact” in the NT but believes the more comprehensive cashless welfare card will achieve better results. “Two-thirds of people who come off the BasicsCard on a compulsory basis choose to stay on it on a voluntary basis,” he says. “That fact proves that many people find it useful for them.”
In late 2014 and early 2015, when Tudge was casting around for potential places to trial the Forrest welfare card idea, mayor Suter called his local federal MP, Rowan Ramsey, and said Ceduna might be interested. “I said our council would support a trial provided that our community supported the idea, so we began a consultation process,” says Suter.
Tudge knew that such a radical and controversial initiative could only be introduced with the full support of local leaders and indigenous elders. But more than this, he wanted the leaders in
Mick Haynes. Picture: Russell Millard
Ceduna to play a frontline role in shaping how such a card might work. “First of all, we were like ‘Whoa’,” says Mick Haynes, the former Koonibba Roosters player and now head of the Ceduna Aboriginal Corporation. “We were a little bit sceptical about how this card was going to work, so we said to Alan Tudge, ‘Leave it with us and we will talk about it’.” Haynes was part of a regional leadership group comprising both indigenous and non-indigenous leaders, which was set up to determine whether the card could work in a town like Ceduna.
The Ceduna group was forthright and clashed with the authorities several times in the first half of last year. They disagreed with Forrest’s call for a 100 per cent cashless card, saying it was impractical in a small town like Ceduna. “We thought that if a family goes to the footy or something and they want a pie or a pastie you’ve got to have some cash because some places won’t take cards,” says Haynes. The Government initially wanted the card to be a 90/10 per cent split while the Ceduna leaders wanted a 70/30 split; a compromise of 80/20 was finally reached.
“They [the Ceduna leaders] not only helped to shape the card, they co-designed the entire effort,” says Tudge. Haynes says there was a lively debate about the card inside the Aboriginal communities around Ceduna, but that the vast majority — some 95 per cent — eventually supported the idea.
Card critic Leeroy Bilney disputes this figure. “A lot of people in our [Aboriginal] communities won’t come forward and say what they really feel until the card comes in and starts to impact on them and their family,” he says.
Another indigenous local, Sue Haseltine, claims the issue has divided Ceduna and that at least 30 people, indigenous and non-indigenous, have left the town because of the upcoming trial. “I don’t believe they have the right to target everyone [on welfare],” she says. “They wanted to target a few people and so they killed our human rights and took our freedom away.”
The opponents of the card in Ceduna are a small but vocal group who accuse the Government of foisting the idea on the community without proper consultation. They argue that the card is an invasion of personal freedom; that it is demeaning to those on welfare; that it won’t stop the true addicts; and that it will lead to increased violence as people steal to get cash.
The card trial has bipartisan support from the Government and Labor but is opposed by the Greens. “It will make people feel worthless and it is damn insulting to me,” says Ceduna local David Pav, a disability support pensioner who will be given the new card. “I feel like I may as well dig a hole and die because there is no reward for good behaviour, no way to get off the card.”
On this day Pav has been joined at the local pub by six other opponents of the card. Each is non-indigenous and each has their own reason for opposing it. Grant Thiselton runs a waste management company, Ceduna Skip Bins, which he says is a 70 per cent cash business which will take a hit when the cashless card is introduced. Next to him is Jocelyn Wighton, who claims she is being unfairly targeted. “I am on a disability pension, I don’t gamble, I don’t drink much … I’ve done nothing wrong but I still have to be on the card,” she says.
When I ask an older lady who is sitting quietly on the other side of the table what she thinks, she pulls out some paper and reads nervously from a prepared script. “It was alcohol that blinded the mind of our son’s murderer [in Ceduna] three years ago,” reads Colleen Martin. “Yet it is not the alcohol that caused the loss of our son, it is the needs that caused the ongoing drinking in the first place. A cashless people in our community will not solve the problem, it will only make it worse … [and] create more violence to get the cash they currently need. It is too late for our family, but it’s not too late for many,” she says.
She folds up the paper as tears well in her eyes and in the eyes of her adult daughter Jodi, who is sitting next to her, squeezing her hand. Colleen’s son Tony, 33, was stabbed to death in an alcohol-fuelled attack in Ceduna in November 2013.
Opinions are divided about whether addicts — alcohol, drug or gambling — are more likely to rob, steal and fight in order to get cash that will be denied under the welfare card. Some argue that a true addict will simply find a way to get cash, illegal or otherwise. “We have discussed the fact that it may be an issue and the police are very much aware of it,” says Suter. “In Coober Pedy when they brought in strong restrictions on alcohol they did have a crime spurt but it wasn’t an ongoing thing.” Tudge is confident that crime will fall as a result of the card. “The expectation of senior police is that crime will decrease because so much of the crime in the community is related to alcohol consumption,” he says.
The biggest divide over the card is whether it tramples on personal rights in seeking to dictate the behaviour of those on welfare. The arguments are similar to those over the 2007 intervention. “Any possible benefit of the card must be weighed against the sense of disempowerment our people already face,” says Gooda. “It must be weighed against the stigma our people continue to face and the restrictions placed on our basic rights and freedoms we fought so hard for.”
It’s an argument that makes Mick Haynes furious. “I don’t think it is a breach of human rights,” he says. “What about the rights of kids when parents are spending their welfare money on alcohol or gambling?” he asks, thumping his hands on his desk. “Is it the right of a kid to have a safe home?” Thump. “Is it the right of a kid to have clean sheets and a bed?” Thump. “Is it the right of a kid to have food on the table and to go to school?” Thump.
“This card is very much thinking about the rights of children and the rights of women to live safely in their community,” says Tudge. “A person who is on this card can spend their welfare payments on absolutely anything they like but they can’t spend more than 20 per cent of it on gambling and drugs. Now, how that is a breach of their human rights I do not know.”
Ryan Edmonds. Picture: Russell Millard
“Look at this mess,” says Ryan Edmonds as he steers his paddy wagon along a rough bush track on the outskirts of Ceduna. He stops the car near an abandoned humpy, gets out and picks up an empty bottle of Jack Daniel’s. Around him are more than a dozen other whisky bottles and empty silver wine cask bags. A broken television, a filthy mattress and a burnt-out car lie among shoes, rags and other debris, making this popular drinking spot look more like a rubbish tip than a slice of Australian bush. “Bottles, bottles and more bottles everywhere you look,” says Edmonds, who runs Ceduna’s council-funded Community Safety and Security Patrol.
We are at a place called 18 Tank, described as “a flat, desolate and pitiless area of land” by deputy state coroner Anthony Schapel in his 2011 report. “They bring with them their sicknesses and morbidities, all aggravated by continual self-neglect and the excessive consumption of locally accessed alcohol — some of them have perished as a result,” Schapel wrote.
Edmonds patrols Ceduna and its outskirts every few hours, moving people on from illegal drinking spots and reporting dangerous drunken behaviour to the police or to the local hospital. The patrols, which cost the council $250,000 a year, were introduced in 2008. Edmonds says as many as 60 indigenous people often gather at 18 Tank and a handful of other bush spots outside town where they can drink legally, unlike in Ceduna itself where public drinking is banned.
As we drive back to town, the 31-year-old former miner, fisherman and oil rig worker recounts tales of alcohol abuse here. “Someone was run over on this road a while back because they were drunk and fell asleep,” he says. “They’ve been passed out on the railway track also.” One local truck company has had so many near-misses with locals falling asleep on the road that it produced its own safety video to teach people not to lie on roads when drinking.
“When I first heard about this welfare card, I wasn’t sure to be honest,” Edmonds says as he drives down another bush track littered with bottles. “But I’ve seen so many people drink it all away that I now think it might actually help.”
“I’ve seen first-hand what alcohol does to this town,” says Mick Haynes. “Our community is disintegrating and our Aboriginal culture is slowly being eroded. Lots of things have been tried but they’ve failed and this [card] could be a circuit-breaker.”
About 10km out of Ceduna, in Denial Bay, Mick’s brother Joe Miller rises unsteadily from a chair on his veranda, using his left hand to raise his immobilised right hand so I can shake it. Joe, 62, was by his own admission a heavy drinker when two massive strokes hit him in 2012, robbing the once-robust mining worker of his career and a normal life. “I don’t know, it may have been the alcohol, but I also smoked a lot,” he says when asked what might have triggered such a life-changing event.
Joe doesn’t know what to think of the welfare card idea. It won’t affect him because his wife Lois works as a schoolteacher, giving them enough cash to buy what they want. Joe worked all his life until the stroke and says he can’t understand someone being on welfare and then complaining about it. “I’ve had to work all my life to get this house, to achieve my dreams,” he says. But Lois wonders whether the card will actually work. “I think it’s a good idea in theory but practically I don’t think it will address the root of the problem,” she says. “I think if people really want to get cash, they’ll get it somehow.”
Greg Limbert points to the bush opposite Ceduna’s Highway One roadhouse, which he ran for 20 years. “In the morning, you would often see people literally crawling across the road from the town camp to come [to the roadhouse] to see how much money they had in their account so they could buy alcohol,” he says. He believes the card will help some people but says it may also affect “some of the people who need it the least”.
An alcohol-fuelled fight in Ceduna. Picture: Russell Millard
The irony is that the card is being introduced into Ceduna at a time when local police and ambulance officers say there has been a slight fall in the incidence of alcohol abuse since December. That is when fresh restrictions were placed on buying takeaway alcohol, including a complete ban on sales of alcohol to Aborigines visiting Ceduna from outlying communities. Even so, as I am writing up notes in the local hotel, a fight erupts outside between two clearly intoxicated women with one throwing wild punches and kicks. I later see ambulance officers tending to the bruised face of the woman who was bashed.
The Government has flagged that if the trials in Ceduna and East Kimberley prove effective, the card is likely to be introduced into other rural and regional areas, including non-indigenous communities. “A logical step would be to continue to roll it out to the regions that have requested it,” says Tudge, although he baulks at suggestions it might eventually be used in capital cities. “To be honest we are not at that stage of our thinking.”
Rodger Kerr-Newell, chief executive of Halls Creek Shire, which rejected the trial, has accused Tudge of peddling a “zombie-apocalypse” picture of Aboriginal communities to win support for the trials.
But Tracey Cox, the former domestic violence worker and mother of two daughters, Halle, four, and Maddison, 18 months, says the problems in Ceduna are all too real. “I’ve seen enough of it,” she says, her eyes flashing with anger. “We see kids coming to school with no food each day because Mum or Dad has gone and spent the money. These kids have a right to learn and to eat — they are our future. Some people don’t have the strength in them to make the right decisions and this card could make it for them. For the better.”
She pauses and reflects on the tough choices facing her hometown and her people. “If it doesn’t work then we can try another way,” she says finally. “But at least we can say that we tried.”
As we go into the new political year, I am putting out a request to our sitting leaders: the Australian “innovation nation” desperately needs some innovative policy.
Our stagnant political environment has got to respond to a changing economy by looking at radical ideas and trying new things.
I have one such idea. Let’s trial an Australian basic income.
An Aussie version of the universal basic income would be a payment made to every citizen, no matter how rich or poor.
At $1000 a month, it would cover one’s primary needs and create a floor for living standards. It would be netted off from existing government programs such as the pension and Newstart, as well as from the tax deductions received by the rich.
Such a program would really make a meaningful difference to the lives of people struggling in the new world of Uber and the changing nature of work.
Growth in the so-called “gig economy” — driven by changes in technology and shifting demand and supply relationships in the labour market — means that thinking about unemployment and welfare needs to change.
Employment is becoming increasingly unstable, with a growth in casual, part-time or short-term roles.
The ABI would allow everyday people to continue to plan and engage with the labour market, to make the economy grow strongly and fairly for decades to come.
Australia needs this because our welfare system is broken. It’s well known that means-testing welfare payments warps the incentive to work.
For every dollar a jobseeker on Newstart earns over $102 a fortnight, they are penalised 50 per cent via reductions in their welfare. Above $252, it is 60c in the dollar.
This is a higher effective rate than that paid by the richest in the land. It’s little wonder that people get stuck on welfare.
While removing the disincentive to work, the ABI also allows the unemployed to take risks and engage fully in the fluctuations of the gig economy. It would promote economic dynamism and individual responsibility, and break dependency cycles.
Importantly, with such a program in place, people will be able to start businesses or join start-ups knowing there is a safety net there during the no-income early phase.
The payments allow people to participate with dignity in society. Evidence from Britain is that this radically improves the engagement of those at the bottom of the social ladder and brings people back into employment — it does not get them to sit on the sofa watching television.
This idea has a history of support by some on both the Left and Right and has been gaining traction recently in Canada, Switzerland and The Netherlands.
The biggest splash came from Finland, where a trial is being implemented next year.
We cannot wait for the rest of the world to take the lead on this. To begin with, we should trial our own version of the program with a group of 50,000 people in Tasmania or South Australia.
Such a trial would tell us how such a scheme could provide for a uniquely Australian context.
By creating the momentum for change, it would give us a chance to overhaul the Australian concept of welfare.
And it would allow us to show the world we are the innovative nation we claim to be.
The real problem with the ABI is its cost: even on a net basis, the ABI undeniably needs a major increase to tax levels. Where would the money come from?
As I have advocated before, changes to negative gearing, land taxes, superannuation, GST and company tax would all be good places to start.
Australia is one of the world’s wealthiest countries, with some of the lowest rates of taxation. We are in a unique position to try out a truly new idea, and make it our own.
For too long, Australian politics has tinkered with tax and transfers as though our democracy were powerless to make a change.
If the Prime Minister wants an innovative economy, he’s going to need the innovative policy to match.
Mark Carnegie is an investor and founder of MH Carnegie & Co.
In Aboriginal and Torres Strait Islander communities across the country, old wounds are being reopened. Many of our people are being forced to revisit the past trauma of income management and stolen wages.
The federal government’s Healthy Welfare Card has created great concern and contention, as the measure will disproportionately affect Aboriginal and Torres Strait Islander people, and claw back our hard-won rights and freedoms.
The government, with the support of the opposition, has passed legislation, without any amendments and with very little consultation, to control the finances of Aboriginal and Torres Strait Islander peoples in three trial sites, beginning with the South Australian town of Ceduna next month. The third proposed site, of Halls Creek in the Kimberley, rejected the idea out of hand, with the shire president Malcolm Edwards saying it had adopted the position of its Aboriginal advisory committee to reject the plan.
“At the last meeting, they voted against having the card. They thought it was a bit unfair because it targeted everyone,” Mr Edwards said.
All welfare recipients in the trial areas will have 80 per cent of their welfare quarantined to a bank card. Only 20 per cent of their welfare payment would be available in cash, which the Assistant Minister for Social Services, Alan Tudge, has himself admitted could leave some welfare recipients with as little as $60 in their pocket each week.
It is deeply troubling that the government is “contemplating how to proceed should the trials prove successful” before any trials have even begun.
It begs the question — have the trials been structured in such a way the results have already been predetermined?
What is most perplexing is the government’s apparent fascination with controlling the finances of Aboriginal and Torres Strait Islander peoples.
Our mob are once again the guinea pigs in a trial program lacking any evidence base.
As I outlined in my 2015 Social Justice and Native Title Report, where people have experienced benefits as a result of income management, the results have been modest when compared to their stated objectives. For many, income management results in few or no benefits, and a “sense of loss of control, shame and unfairness”.
Any possible benefit of the card must be weighed against the sense of disempowerment our people already face. It must be weighed against the stigma our people continue to face, and the restrictions placed on our basic rights and freedoms we fought so hard for.
We are told by the government that the measure will tackle the serious issue of alcohol and drug abuse within our communities.
There is no doubt that alcohol and drug abuse are contributing factors to creating dangerous and disruptive communities; and all children have the right to grow up in safe, nurturing environments — Aboriginal and Torres Strait Islander children are no exception.
We have no evidence to support the prediction that a restriction on cash payments will curb an individual’s addiction or their ability to provide a safe environment for their children.
According to Mr Tudge, restricting supply is an effective measure to address these problems. But in the same way that people with serious addiction can circumvent restrictions on supply, they will undoubtedly find innovative ways to circumvent limits on their capacity to purchase.
The role of government is to provide effective policy, based on the best available evidence. In the case of the Healthy Welfare Card, there is no conclusive evidence that it will effectively address issues of alcohol and drug abuse, and encourage good parenting.
Our people do not need a compulsory blanket approach to tackling these issues. We want to work with government to develop long-term, effective solutions to the challenges we face.
I agree with Mr Tudge when he says, “collectively we have to get control of the alcohol abuse that destroys communities and threatens the next generation”, but I disagree that the card is “the solution”. Serious addiction requires thoughtful treatment options rather than punitive measures and silver bullets.
The hardest part of this proposal to accept is that yet again the treatment of our people will be different to mainstream Australia, and it is this differentiation of treatment that we have fought so hard to bring into the open.
Mick Gooda is the Aboriginal and Torres Strait Islander Social Justice Commissioner.
Sarah Martin, 20 January 2016 Assistant Minister for Social Services Alan Tudge is overseeing the rollout of the cashless welfare card. Picture: Stuart McEvoy
A cashless welfare card aimed at stemming alcohol abuse would be rolled out across the country under a welfare reform the Turnbull government is considering taking to the election.
As regional trouble spots line up to be chosen for trials of the government’s new Healthy Welfare Card to begin next month, The Australian understands the Coalition may seek an election mandate to extend the card to welfare recipients across regional Australia if they achieve positive results.
Under the new system — proposed by mining magnate Andrew Forrest in his review of the welfare system in 2014 — 80 per cent of a person’s government payment would be quarantined to a bank card that could not be used to buy alcohol and gambling products, nor converted to cash.
The remaining 20 per cent could be accessible as cash.
Last year, the government successfully passed legislation to allow the card to be trialled in three test sites, affecting up to 10,000 welfare recipients, beginning in the far-west South Australian town of Ceduna next month, and the East Kimberley in northern Western Australia in March.
The Australian can reveal that since the East Kimberley trial site was announced in November, up to seven West Australian shires have contacted Liberal MPs seeking to take part in the trial of the card, predominantly from the Mid-West and Gascoyne regions.
Melissa Price, MP for the vast regional seat of Durack, said the councils had contacted her because they were struggling with social dysfunction arising from alcohol abuse that was not being curbed by existing programs.
“There is a sense of urgency, certainly in my patch of regional Western Australia, where in some cases we have got alcohol management plans that have worked to a certain extent, but people want to see the Healthy Welfare Card implemented alongside the alcohol management plans,” Ms Price said.
“Without a doubt, if you don’t have a community that is abusing alcohol, it is better not just for the individual but for the community itself.”
Ms Price is pushing for the regional centre of Geraldton to become the third trial site.
This would allow the government to test the card in a city where the majority of welfare recipients are non-indigenous and provide a blueprint for how the card could work in metropolitan areas.
“Obviously it is subject to the results of the trial, but it is very interesting to see how this could get rolled out in a major city as this is not just a problem in the bush,” she said.
If the card were rolled out across all regional communities in Australia, up to 100,000 people on government income support could be captured.
It could include more people if the Basics Card in the Northern Territory were replaced, or if metropolitan trouble-spots currently subject to income quarantining were also included.
Assistant Minister for Social Services Alan Tudge, who is overseeing the rollout of the card, is hopeful trials will prove the measure can be the “solution” to alcohol-induced social harm.
He says that if the trials are successful, the government will want the card to have a broader application.
“Offering the card to other regions would a logical next step, beginning with those Western Australian locations that have already shown initial support,” Mr Tudge writes in The Australian today.
“Others have suggested that the card could have wider application.
“It is early days, but one thing is clear: collectively we have to get control of the alcohol abuse that destroys communities and now threatens the next generation.
“The cashless welfare debit card may be the solution.”