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Issue #1750      September 28, 2016

Targeted

Unemployed, aged, disabilities, carers

Social Services Minister Christian Porter is not lying when he says that the “budget savings” in the government’s Omnibus bill are “targeted”. The majority of these so-called “savings” are cruel cuts targeted at the most vulnerable and disadvantaged in the community. The Labor “Opposition” should hang its head for rolling over with hardly a murmur to give its support to the Turnbull/Abbott cuts.

The cuts hit students, the unemployed, successful job seekers, aged care residents, dental services, immigrants, people with unpaid welfare debts, new parents, childcare benefits, carers families, mentally ill charged with a serious criminal offence and new social security recipients.

The government describes these latest cuts as a first stage in a “revolutionary change” to end “welfare dependency” by “investing in people [and] improving lives”. Its Australian Priority Investment Approach “will help foster innovation throughout society.” So the government claims.

In fact it will do exactly the opposite. You do not improve lives by cutting incomes that are already below the poverty line. Nor do you improve lives or invest in people without creating jobs and providing access to quality education and training. The government does neither of these things.

Porter rings the alarm bells of “unsustainability”. Trillions of dollars would be spent on locking thousands of people into “welfare dependency” if changes are not made now.

The people he is referring to include those who receive or might receive the age pension, people with disability, young carers, the sick, the unemployed, parents, single mums, students and Indigenous Australians.

Porter’s language is deliberately bamboozling and designed to cover up the fact the statistics are meaningless. The “baseline valuation”, he says, “applies the type of algorithmic and actuarial analysis used in insurance industries …”

So what! We are dealing with human beings who have a right to live in dignity, to housing, to study, to work, to health services. People are not statistics and they do not have a disease called “welfare dependency” that is to be treated by punitive measures.

Dishonest

The Australia Institute (TAI) estimates that $3.77 billion or 62 percent of the 6.1 billion in savings identified in the Omnibus Bill comes at the expense of lower income people, with the rest coming mainly from higher education and innovation.

Porter clearly wants to hang his cuts on moral judgements about those who access social security payments.

The talk about identifying those at high risk of long term welfare dependency and helping them find employment is dishonest. The government is doing nothing to create jobs. In fact, it is destroying jobs through its policies such as cuts to the Australian Renewable Energy Agency, ongoing subsidies to the fossil fuel industry and trashing the manufacturing industry.

The jobs will not come through innovation with a government cutting the incentive to students to study mathematics, science, engineering or technology as the government’s Omnibus bill does. The destruction of TAFE, the increasing TAFE and university fees and the bill’s changes to the repayment of student debt is not a recipe for innovation.

Porter plans to get young carers into education and the workforce, but how? Where are the back-up services so that they can do this?

He also targets young parents, and raises concerns that the government’s data shows that young single parents are likely to have more children and remain on parenting payments for long periods of time. Again, he takes the approach of cuts to payments, not support such as affordable childcare so that they can study or work.

Porter acknowledges the existence of inequality, but rejects the notion of reducing inequality. Instead, potential and existing welfare recipients must be identified and monitored and data collected on them so that they can be put on a path to “self-reliance” and channelled into the workforce.

Porter complains about students who receive student payments and how many of them end up in the welfare system. The unspoken but clearly implied sentiment is that these students, single parents and carers are “welfare dependent” because they choose to be.

Punitive

As already stated the bill’s measures are punitive. They do not address the reasons people receive social security payments or make an attempt to appropriately address those circumstances.

Porter openly admitted Newstart was designed to be cruel in an address to the National Press Club on September 20. “I would actually put to you that the fact that people who find it challenging to subsist off Newstart [$38 a day] do so for short periods of time, might actually speak to the fact that that’s one of the design points of the system that’s working OK because the encouragement is there to move off those payments quickly.”

Nationally more than a quarter of a million young people are unemployed. “This is a serious problem. But it will not be addressed through punishment,” John Falzon, CEO of the St Vincent de Paul Society of Australia said.

“It’s time we stopped disguising market failure as a personal failure to participate in the market. ... By focusing on the supposed failings of the individual, we are missing the bleeding obvious: that there are not enough jobs (and specifically, not enough hours!) for those who can work, as well as a seriously inadequate level of income support for those who cannot,” Falzon said.

Impoverished

Age pensioners are also subjected to poverty level payments, no doubt a punishment for not providing for themselves.

“Several recent studies have highlighted the very high rates of poverty among older Australians. OECD data show that a third of Australians over the age of 65 were at risk of poverty in 2012, the second highest rate in the OECD behind South Korea. In 2015 the Lord Mayor’s Charitable Foundation completed a report that found more than one third of women over the age of 60 in Australia are in permanent income poverty.” (The Adequacy of the Age Pension in Australia, a report by Warwick Smith and David Hetherington for the Benevolent Society, The Longevity Innovation Hub and Per Capita)

As Falzon said, “Poverty is not a personal choice. Being a full-time carer, or living with a disability or mental illness, or leaving a violent partner, or being residualised by the labour market, should not result in poverty in a prosperous and progressive country.

“We should certainly not begrudge the money we spend to make sure that no one is left out or pushed out; that no one is excluded from having a place to call home, a place to work for those who can work (and appropriate income support for those who cannot), a place to learn, and a place to heal. We should not be comfortable with the retrograde notion that charity should be the default mode of providing social security.” (UK Guardian “Australia does not have a welfare problem. We have a poverty problem”, 20-09-16)

The Minister foreshadowed tougher “mutual obligation” measures in his speech to the National Press Club along similar lines to New Zealand. Social security recipients of working age would be monitored closely and what will be considered “unacceptable” behaviour punished through loss of payments.

Cuts that save lives

If the government cut the fossil fuel subsidy (tax credit) to mining companies it would save an estimated $10 billion over the four years from 2016- 2017 to 2019-20. That would more than cover the punitive cuts in the Omnibus bill and would be far more beneficial in outcome.

That is not the only area of savings open to the government. The government could cut its military spending and save billions of dollars. At present it has budgeted for $1 trillion over the next 20 years.

The order for 72 F-35A Joint Strike Fighters from Lockheed Martin in the US is slated to cost $17 billion – that is before the usual blow-outs. The government made the commitment without assessing the possible maintenance costs over their lifetime. These are estimated by Mike Sullivan from the US Government Accountability Office at around $1 trillion!

But the aim of the cuts is not to balance the budget or even cure a disease called “welfare dependency”. They are another step in the winding back of social security and other social spending to fund company tax cuts.

Former Coalition Treasurer Joe Hockey let the neo-liberal cat out of the bag when he raised the longer-term aim of zero company taxation or what Porter refers to as “self-reliance”.

A government serious about balancing budgets and investing in people would invest in job creation, services, in communities, and in the public sector. It would slash military spending, cut corporate welfare and make the big corporations pay tax.


At a glance: Budget Savings (Omnibus) Bill

The following are some of the measures in the Bill.

  • Lower the threshold at which repayments of the Higher Education Loan Program debt commence
  • Discontinue the HECS-HELP benefit, which provides an incentive for graduates of particular courses (mathematics, statistics or science; education, nursing or midwifery; and early childhood education) by reducing their compulsory HELP repayments
  • Strengthen compliance measures for aged care providers when assessing residents for funding purposes
  • Close the Child Dental Benefits Schedule from 1 January 2017
  • Remove the exemption from the newly arrived resident’s waiting period for social security payments and benefits for new migrants who are family members of Australian citizens or long-time permanent residents
  • Terminate the Student Start-up Scholarship
  • Provide that a person who has not paid or does not have satisfactory arrangements in place to repay their family assistance, social security, paid parental leave and student assistance debt(s) may be prevented from leaving Australia
  • Include Parental Leave Pay and Dad and Partner Pay payments in the income test for income support payments (such as pensions and allowances)
  • Continue a freeze on the indexation of certain income test thresholds and limits for Family Tax Benefit and paid parental leave
  • Remove certain exemptions from the social security and veterans’ affairs income and assets tests for aged care residents who are renting out their former home
  • Provide that people who are undergoing psychiatric confinement because they have been charged with a serious offence cannot receive social security payments except during a period when they are being integrated back into the community
  • Close two carbon price compensation payments, the Energy Supplement and Single Income Family Supplement, to new recipients of social security, family assistance and veterans’ affairs payments
  • Reduce the rates of tax offset available under the research and development (R&D) tax incentive for the first $100 million of eligible expenditure by 1.5 percentage points
  • Reduce funding to the Australian Renewable Energy Agency, giving effect to the government’s policy to discontinue providing grants for renewable energy research and development in favour of a limited new loans and equity investment scheme known as the Clean Energy Innovation Fund

Next article – Editorial – Australia’s aid and comfort to IS

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