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Issue #1639      May 21, 2014

Budget goes after victims of failing system

Hockey’s first federal budget has shocked most Australians, even some residents of the big end of town. How are the unemployed and other impoverished, marginalised people meant to live and move out of their predicament on so little income or no income?

The TAFE system is suffering from years of neglect by authorities favouring private providers – education featured highly in the March in May protest in Sydney. (Photo: Linda)

“The changes to Newstart [Allowance] look pretty tough,” Business Council of Australia chief executive Jennifer Westacott said last week. “When you look at that against the unemployment figure going up, can this be done?” While tens of thousands of Australians have marched to express their anger at the prospect of greater poverty and suffering flowing from the federal budget, doubts are plaguing some business circles that a burgeoning and increasingly restive underclass will be created. Even they are asking whether that is “sustainable”.

The fears are as justified as the attacks are savage. “Pretty tough” is an understatement. People under 30 years of age will have to wait six months to receive Newstart. The under 25s will have the same qualifying period for access to Youth Allowance. Then it will be six months of “work for the dole”. If there is no job forthcoming at the end of that stretch of virtual slave labour, it will be another six months without income.

Young people without family support will be hardest hit. Some will be forced to move back to unsatisfactory family circumstances. Homeless services, already stretched beyond their limit, are bracing themselves for an influx of clients. “An allowance of $205 per week sees many young people living on a diet of rice and bread, so what will they eat when they have no money?”, Jenny Smith of the Council to Homeless Persons asks.

The eligibility age for the dole is also being raised from 22 to 25, condemning many to the much lower Youth Allowance rate.

Business circles are also wondering how the government is going to provide for its demand to be met that people, especially young people, must be “earning or learning”. University fees are set to skyrocket and the TAFE system is suffering from years of neglect by authorities favouring private providers. Ten skills programs are to be axed by the budget to achieve a short-sighted saving of $1billion.

Standing like a threat to unemployed Australians is Abbott’s “Green Army”. It is supposedly a “volunteer” organisation devoted to cleaning creeks and waterways, planting trees and putting up fences. Workers will receive between $304 and $494 a week – way below the minimum wage of $622. “Volunteers” will be exempt from Commonwealth workplace laws like the Work Health and Safety Act, Fair Work Act and the Safety, Rehabilitation and Compensation Act. The thinking behind the scheme is that experience of the “Green Army” will soften younger workers up for lower wages and fewer entitlements. It is also a threat to award rates of pay and conditions.

Anger will spill over at some stage. The “debt crisis” rhetoric is not cutting through for the Coalition. Neither is the line about everybody being expected to do their bit. Big business is being benefited as usual, relieved of taxes and looking forward to lucrative infrastructure projects and privatisation. Higher income earners (those pulling in over $180,000 p.a.) are being asked to contribute another two percent in income tax until 2017. We’ll see how much that measure will deliver after the accountants get on the job.

The longer-term unemployed, on the other hand, will definitely be paying with their well-being and their income. Single recipients of Newstart will lose $6,636.50 during the stint of six months they face without income.

The public is aware the unemployed are not the only group to suffer from swingeing cuts to their income and benefits. Those on the Age Pension and the Disability Support Pension are big losers, too. But the affect on the unemployed is going to be the harshest and most immediate. The changes to their benefits and social security payments must not be passed or horse-traded by the Senate. Pressure from outside – from people on the streets, organising in workplaces and the community – will be key.

Next article – Budget hits industry and jobs

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