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Issue #1578      January 23, 2013

Labor shoves disadvantaged onto dole queues – again!

The year began terribly for single mothers, when the Gillard government implemented a policy under which most of them were to be transferred from the parenting allowance scheme, which already leaves its recipients below the poverty line, onto the Newstart program, which has far lower payments.

Under the new rules, after a single parent’s youngest child turns eight the parent will receive the Newstart allowance, not the parenting allowance. For partnered parents this will occur when their youngest turns six.

Approximately 100,000 welfare recipients are affected by the new policy, including 60,000 single parents. The allowance for single unemployed parents has been cut by between $60 and $100 per week. The worst affected are being forced to seek meals from charities. Entertainment and holidays are now out of the question, as well as essential medication and treatment by specialists.

The overall rate of homelessness is expected to soar. In desperation, some single mothers have been seeking work as pole dancers or even as prostitutes. As Katrina Rae, spokesperson for the Single Parents Action Group, noted grimly: “You would do anything to feed your family.”

In a bitter irony, the new arrangements will make it extremely difficult for the unemployed to seek work, because of the cost of travel. The struggle to cope will savagely undermine their morale, making it increasingly hard to present a positive face at job interviews, even if the applicant can make it there in the first place.

The changes will also be a savage blow for people who work part time but still depend on welfare support, because Newstart recipients are entitled to earn far less than parenting payments before their payments are effected. Payments to a single unemployed person transferred to Newstart will fall by $57.50 per week, but someone earning $400 per week from part-time work will lose $111.50 per week in welfare payments, and will also lose a number of concessions and the pensioner education supplement of $15 to $31 per week.

Minister in spectacular PR crash

The amended Newstart scheme originated from the government’s determination to achieve a no-debt budget before this year’s election. That objective was finally dumped recently, when the government realised that the cuts across the board it required would have a devastating impact on Labor’s re-election prospects later this year.

The government then introduced some popular new initiatives, including the new one-off Dad and Partner payment of a fortnight’s minimum wage, i.e. $1212 for working fathers and same-sex partners who earn less than $150,000 and whose wives or partners have or adopt a child after January 1.

However, the planned transfers to Newstart, which are expected to save the government $685 million over four years, were left in place. Apparently the protests from those affected were not considered particularly damaging to the government’s chances at the polls.

On New Year’s Day the Minister for Families, Jenny Macklin (who earns $6,321 per week), was asked repeatedly whether she could live on $35 per day, the minimum Newstart payment. She finally replied “I could”, but following a nationwide uproar she was forced to admit she could not.

During her speech Ms Macklin commented: “Unfortunately we have far too many … children growing up in families where nobody is working. The more that people go back to work, the better. It’s better for the family, it’s great for the kids to see Mum or Dad going to work.”

And so it is! However, this statement, taken straight from the Liberal Party handbook, ignores the fact that the Newstart transfers won’t put anyone into a job. Instead, they will effectively punish welfare recipients for not having a job, or for being partly employed.

The statement also reinforces conservative myths that most welfare recipients choose to stay unemployed because it’s comfortable and they’re lazy, or even that single women on welfare deliberately have children in order to gain the payments.

It’s not the first time

The Labor government has, in effect, already taken action to thrust many of Australia’s less wealthy citizens onto the dole queues. By raising the retirement age for men and women from 65 up to 67 years (until quite recently the retirement age for women was 60 years) the government has shortened the precious and all too brief period of retirement, when those who would have previously been eligible to receive an indexed age pension might have enjoyed travel, education, hobbies, time with children and grandchildren, and at least a degree of frugal comfort in their final years.

As it is, increasing the retirement age will not create new jobs, and older workers who find themselves unemployed during the extra work years will be forced to rely on the Newstart allowance, just like the single parents.

The implementation of the new policy has caused severe controversy among Labor MPs some of whom have openly declared that Newstart should be increased immediately.

However the problem is not just that Newstart is low, but rather that the government deliberately shifted welfare recipients from an already threadbare welfare program to one with even more limited payments, without caring about the savage impact on recipients.

The Henry Tax Review in 2010 recommended that all social security payments should have a common indexation factor, and that huge gaps between various levels of welfare entitlements should be avoided. However, the government has not implemented this recommendation, and is unlikely to do so because it might very well create a united front between the recipients of all the welfare programs, including the well-organised and militant aged pensioners.

Instead, as in so many other policy areas, welfare is being determined by a cynical manipulation of public opinion for the electoral advantage of the government, and not by concern for welfare recipients.

Casandra Goldie, chief executive of the Australian Council for Social Services, commented that the new arrangements “…will have a devastating impact on single-parent families and their children. These families are already struggling as they live below the poverty line. … You don’t get people into work by driving them and their children into poverty.”  

Next article – Industrial action on agenda over enterprise bargaining

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