Category Archives: NEWSPAPER ARTICLES

New wave of reform for welfare

A second phase of reform is being prepared by Tony Abbott and Joe Hockey in talks with Families Minister Kevin Andrews. Picture: Gary Ramage Source: News Corp Australia

31 May 2014

The Australian

A NEW wave of welfare reform that could force people off dozens of benefits is being prepared as the Abbott government seeks to simplify almost $80 billion in annual outlays.

Inflaming the dispute over tough budget cuts, Tony Abbott and senior ministers are canvassing further ways to cancel or reduce payments as they express frustration at the number of benefits. The government is aiming to sharpen the political row over welfare by releasing confidential advice within weeks to highlight the complexity of the system and the looming burden on taxpayers.
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Welfare system needs a new start

January 14, 2014
The Australian

IT is disappointing, if not tragic, that what passes for a debate on the nation’s welfare system has boiled down to an argument over the need to boost the Newstart allowance above the present rate of $35 a day.

Few groups are opposed to a $50-a-week increase, including the Business Council of Australia. And after the government’s decision to scrap the surplus (Jenny Macklin’s unfortunate holiday season faux pas aside), it is hard to see the government maintaining its opposition.

There is a growing push by backbenchers to increase Newstart. The opposition is making similar noises.

And the $2 billion a year in extra funding would flow back into the economy, creating a mini-stimulus, which would be good news for struggling small businesses. Moreover, it would be an immediate stimulus.

The case is pretty compelling that an increase in Newstart is justified. Hikes in the cost of energy and food over the past few years have affected unemployed people and their families who generally do not benefit from interest rate cuts.

But an increase in Newstart is only part of the story.

Any increase in income support must be balanced by real incentives to get back into work. As this newspaper editorialised, the best form of welfare is a job.

An increase to Newstart should be complemented by an increase in work experience funding to encourage real workplace-based activity. It’s also necessary for jobseekers to be required to participate in community programs, work experience or training at the same time to balance any disincentive to work.

And we still need to remove other disincentives to working such as the loss of housing, healthcare and other benefits as income support recipients re-enter employment.

The problem with the Newstart debate is that it’s too limited. Australia’s welfare system is broken. The federal government must conduct a full-scale review and deliver root and branch reform. Instead we get the appearance of reform that at best kicks the can down the road, and at worst just makes things more complex and unfair.

The government’s initiative to move more than 100,000 single parents from the parenting payment on to Newstart is a case in point. The harsh financial impact of the decision has been well documented. But what’s little understood is that it deals those affected a double whammy – they will be worse off monetarily and they will also wait longer for help finding a job.

That’s because following the government’s changes to the Job Services Australia system that came into effect on July 1, many single parents moving to Newstart will have to wait 26 weeks before they can access the intensive employment help they need. Previously it was 13 weeks. And the hours of assistance available under the system have been reduced from 40 to 25.

The government has defended its changes to benefits for single parents on the grounds they’re necessary to boost employment and address welfare dependency. But if that were the case, surely it would put in place the necessary supports to help single parents find work? What it’s done is made it harder for many people.

When you look at how these changes work against each other, moving single parents on to Newstart while making many wait longer for job assistance, it’s clear we’re dealing with something ill-conceived.

The less charitable would say it’s all about delivering budget savings rather than a genuine attempt to get people off welfare.

For many years, Mission Australia has been at the vanguard of welfare reform in this country. My predecessor as its head, Patrick McClure, led the Howard government’s independent committee on welfare reform, which provided a blueprint embraced by all sides of politics. Time and again I have publicly championed efforts to encourage more Australians, who have the capacity, back into the workforce. I would hope that, given that record, Mission Australia’s voice carries some weight on this subject.

What we need is a review that: tackles the complexity of the income support system, including how it interacts with the tax system; reconsiders and possibly reinvents the nation’s approach to supporting disabled people back into the workforce; takes a balanced approach to assisting long-term unemployed people; and doesn’t fall into the trap of “all stick and no carrot”.

The main piece of welfare reform left undone in the 13 years since the McClure report is its recommendation of a single income-support payment complemented by a participation supplement and a needs-based add-on payment according to circumstances, such as a need for child care to attend work or for someone to access public transport.

Such a system would be fairer for individuals and less complex for the government to manage.

It will be an expensive reform, no question. But it will cost us more not to pursue it.

And underlying any substantial review must be the principle central to the McClure report’s agenda that no income-support recipient be left worse off as a result of the changes.

Quite clearly the federal government has fallen at that hurdle in terms of single parents.

Toby Hall is the chief executive of Mission Australia.

Newstart no start when diet, friends and health go begging

Sydney Morning Herald

“Instead of spending their energy looking for a job these people are worried all the time by the very basics of survival.” Photo: Kate Geraghty

One in four people on the dole for more than a year in inner Sydney have been forced to beg on the streets, and six in 10 have approached a charity for help, says a grim new academic study into life on unemployment benefits.

The scale of deprivation for those on the Newstart allowance was so serious the researchers concluded the employment prospects of recipients had been seriously “scarred”.

“Instead of spending their energy looking for a job these people are worried all the time by the very basics of survival,” said the co-author, Dr Alan Morris from the University of Technology Sydney.

The survey of people on Newstart found most had gone without basics such as heating and good-quality food. About 80 per cent could not afford dental care, half could not buy new clothes and more than 40 per cent could not afford medicines.

“I was surprised by the level of desperation,” Dr Morris said. “The way some people are living is quite incredible. If they don’t escape quickly there is a terrible spiral of decline, and a major risk of becoming permanently stuck.”

Co-author Dr Shaun Wilson, from Macquarie University, said it was typical for longer-term recipients of Newstart to become very isolated and financially vulnerable.

“People don’t just lose dignity and connection with the world, they start to rely on increasingly risky and haphazard strategies for survival,” he said.

The survey found 25 per cent of long-term Newstart recipients had approached ”people on the street”.

Australia’s unemployment benefit is meagre compared to many comparable nations members of the Organisation for Economic Co-operation and Development, especially for singles in the initial stages of unemployment.

The Newstart payment for a single person is equivalent to just 28 per cent of the average wage, compared with an OECD median of 57 per cent in the initial stage of unemployment, the study says. The standard Newstart for a single person is $255.25 a week.

“We’re pretty much the worst of all the rich countries at supporting single unemployed people,” Dr Wilson said.

But tough new rules in the budget will make it even more difficult for unemployed young people. From the beginning of next year, under-30s who go onto Newstart will receive no payments at all for six months of each year.

Dr Morris said the changes threatened to undermine social cohesion and would contribute to the creation of a desperate underclass.

“I think these changes are going to unleash terrible suffering,” he said. “We are going to have more people begging in the streets.”

Housing is a major stress and Morris and Wilson found many recipients were living in “inadequate and even unsafe situations” because of a lack of affordable accommodation.

About a third of respondents lived in shared housing, boarding houses or pubs. One was living in a backpacker hostel while another had no electricity, no fridge and no hot water.

A lack of money forced many of those surveyed into unhealthy lifestyles.

“For some, their lack of disposable income had severe health implications,” the study found.

Most respondents said their social activity had been severely curtailed.

Many were troubled by depression and anxiety, and acute social isolation was common.

“For single people on Newstart, it was difficult to envisage having an intimate relationship. Often, accommodation was too sparse and respondents simply did not have the money to ‘date’.”

Their paper, Struggling on the Newstart unemployment benefit in Australia: The experience of a neo-liberal form of employment assistance, will be published in The Economic and Labour Relations Review.

Welfare trap gets harder to break the longer jobseekers collect dole payments

ONE in two unemployed young people stay on the dole for more than six months and one in four for a year, new data reveals.

And in signs of a growing welfare trap, the number of young people stuck on the dole has increased in the past year.

As the Government prepares to roll out tough new “learn or earn” rules on under-30s, the figures show a growing number of people who stand to be hit by the crackdown.

Social Services Minister Kevin Andrews said the dole was seen as a “lifestyle choice” by too many young people.

Official figures prepared by the Federal Government reveal about 47 per cent of unemployed people aged under 30 receive Newstart for more than six months.

A year earlier, about 43 per cent of young unemployed people stayed on the benefits for more than six months.

From January 1, unemployed people under 30 will be forced to wait six months before they can access Newstart or Youth Allowance.

The national data suggests just over more than half of young unemployed people will miss out on any dole payments when the Government imposes a six-month waiting period next year.

But if the trend of increasing time spent on benefits continues, even more unemployed people could be affected.

Even after a year on Newstart, 26 per cent of under-30s were still unemployed as at September last year.

This figure increased from about 22 per cent who were stuck on the dole for more 12 months a year earlier. Only about 30 per cent of young people find work within three months of receiving Newstart, down from 35 per cent in September 2012.

The results are likely to be worse in unemployment hot spots of Queensland such as Cairns, Moreton Bay North, Ipswich and Brisbane suburbs of Indooroopilly, Kenmore, Centenary, Sunnybank, Mount Gravatt and Holland Park.

Youth unemployment has soared by between 43 per cent and 88 per cent in these areas over the past two years, the Australian Bureau of Statistics reports.

The Brotherhood of St Laurence has warned of a “generational crisis” in these parts of the state.

About 270,000 young Australians are currently on unemployment benefits, according to the Federal Government says.

From January 1, unemployed people under 30 will be forced to wait six months before they can access Newstart or Youth Allowance.

Social Services Minister Kevin Andrews said the dole was seen as a “lifestyle choice” by too many young people.

“The income support system should not make unemployment a viable, and in some cases more attractive, option for young people,” Mr Andrews said.

The Minister warned the longer people remained on benefits, the more they would struggle to find work.

Who really benefits from Centrelink?

RED FLAG, 15 MAy 2014

If you think you can beat the carnival of misery that is the Centrelink queue by rocking up at 8am, think again. By this time in the morning, the busier offices already have a pre-queue queue outside the locked glass entrance.

If you’re lucky, it might take only an hour and a half for an overworked staff member to flick through your job seeker diary; usually it takes much longer.

While the government makes the unemployed and underemployed jump through hoops to receive the paltry Newstart allowance, which is well below the poverty line, so-called “job providers” that have been caught rorting millions from the welfare-to-work scheme have demanded less oversight from government.

Now called Job Services Australia, the program is meant to help the long term unemployed find work. It pays private employment agencies fees for finding jobs for Centrelink recipients, or assisting them in their search for employment.

The Abbott government, as part of its agenda of cutting red tape, recently announced that from 1 July providers would no longer be required to collect documentary evidence to verify job seekers’ employment.

“Cutting red tape” is something business people like talking about. But there are other buzz words that they don’t like using so much – “fraud”, for example. According to a federal government assessment last year, private providers have been doing plenty of that. The assessment found that the $4.7 billion welfare-to-work scheme is at “high risk” of being defrauded by the government’s designated employment agencies.

An external audit of the Job Services Australia program in 2012 by former public servant Robert Butterworth identified more than $100 million in fees that had been improperly claimed in just two years. The review found that, of 2,117 claims examined, 40 percent were unsubstantiated. The review prompted fraud investigations into an unknown number of agencies.

The Catholic Church’s employment arm, CatholicCare, systematically defrauded the Job Services program by claiming it had found positions for job seekers who had in fact found jobs for themselves. This was true of up to 70 percent of cases it claimed to have “brokered”.

A December 2011 file from Victoria recorded one agency claiming “reverse marketing” fees (awarded when agencies generate a job by cold-calling employers) for placements that had already been advertised.

Fairfax used freedom of information laws to obtain copies of “provider risk alerts” compiled by the Department of Education Employment and Workplace Relations in 2011. They revealed that former employees of the ORS Group had blown the whistle on their managers for ordering them to abuse the job seeker program.

There is also a risk that agencies might benefit from unauthorised access to confidential information made available to them under the program.

In 2010, Newstart was $74 a week below the 50 percent of median income poverty line used by the OECD. A six month waiting period and other budget measures will now make it harder for the unemployed, particularly young people, to access even this paltry amount.

But for the private providers rorting the system, the age of entitlement is only just beginning.