More welfare "reforms"
Another round of slash-and-burn social security "reforms" are afoot. Just three weeks since the vicious Federal Budget was handed down, documents leaked to The Sydney Morning Herald indicate the Howard Government is now considering a further overhaul of the system." In the lead-up to the 2001 Federal Election, the Prime Minister promised that no one would be worse off in the welfare reform process. Just five months later he sought to introduce changes that would dump hundreds of thousands of pensioners out of the system altogether. The reforms suggested in this latest paper aim to remove financial disincentives for those wishing to move from welfare to work. Under the current "income support" system, government benefits are lost at such a high rate when recipients earn income through work, that they are only slightly better off for their efforts. The three options being considered are: * combining work and study payment into one, and removing the financial disincentives to work from recipients with children; * combining all payments into one base rate with one income test, then producing a table of "add-ons" for those with special needs — e.g. the disabled; * or to completely "reform the social security, tax and wages systems so that they work more effectively together". However, when it comes to reforms of any kind the Howard Government has shown consistently it handpicks only the most punitive and cost-saving recommendations. Their modus operandi is not to reward the efforts (and good fortune) of those who find work, but rather to punish those who do not. The Howard Government has not used the social security system to assist the most disadvantaged Australians out of poverty, instead it has created new rungs at the bottom of society's ladder. The Australian Council of Social Services has also taken an extremely cautious approach to these revelations. "The McClure Report noted that an investment will be needed to ensure that welfare-to-work works", ACOSS President, Andrew McCallum. "Social security changes should not be about cost-cutting." "ACOSS welcomes the attention given in the leaked report to the need to address the withdrawal of income support and high taxation paid by welfare recipients as they earn income from work. However, he said, there were more urgent issues that needed addressing. The current base rates of pay leave hundreds of thousands living below the poverty line — a situation exacerbated when the GST was introduced. Harsh and unfair measures such as the punitive breach penalty regime and the impossibly difficult job-seeker diary system need to be abolished. A comparison of income and withdrawal rates when working for different payment types highlights the inconsistencies and complexity of the present system. A single, young unemployed person gets only $301.70 per fortnight. When they earn income they lose 50 cents in the dollar for income between $60 and $142 per fortnight and 70 cents in the dollar for income over $142 per fortnight. All of this income is also subject to tax. A single adult on Disability Support Pension receives $421.80 per fortnight. When they earn income they lose 40 cents in the dollar for any income above $112 per fortnight. The Disability Support Pension is not taxable income. If Mr Howard is serious about lowering unemployment and helping people get off welfare, more needs to be done than just "simplifying" the system with reforms to social security payments and taxation. The real issue is that there are seven unemployed people for every job vacancy. "We need to create more jobs, particularly in job-starved regions", said Mr McCallum. "We need to have in place proper employment, education, training and other services to ensure that the most disadvantaged among the jobless can access jobs. "In simplifying the social security system it is imperative that already inadequate payments be raised to a proper standard, not lowered. "* * * Social Security fines for breaching Centrelink rules are way too high, said 95 per cent of respondents in a Newspoll released last week. Currently, a first breach of Centrelink rules results in an $863 fine. Yet 75 per cent of interviewees suggest a fine of $50 or lower would be appropriate. On a third breach of rules a fine of $1476 is imposed. Sixty per cent of those polled believed just $100 would be fair. Yet, when an independent review of the system in March suggested fines should be capped at $221, Minister Amanda Vanstone retorted with: "Such a softening of the penalty regime does not reflect the wider community's expectations."