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Issue #1778      May 24, 2017

Budget 2017-18

Cut corporate welfare

The 2017-18 budget callously sets out to drive more people into poverty and eat away at the meagre support that the poor receive from the government. To use former Treasurer Joe Hockey’s language it can be summed up as: the poor do the lifting and the wealthy do the leaning.

At the same time as portraying people on low incomes, with a disability or unemployed as leaners, the Treasurer attempted to demonise and stigmatise those reliant on government payments.

Social Services Minister Christian Porter said of the budget: “We want to make some changes.” He means it! But he and the Treasurer have delivered a slick sales pitch that masks the true nature of these changes.

Attempting to defend the indefensible, Treasurer Scott Morrison in his budget speech said, “Around three-quarters of the increase in our debt since 2007-2008 has been driven by welfare, health and education spending.”

Another version of this is the “bad debts, good debts” line – expenditure on health, education and social security are portrayed as “bad debts” and “good debts” arise from spending on infrastructure for industry.

This is nonsense. The government’s debt and deficit are driven by an obscene and rapidly expanding military budget and hand-outs and subsidies to mining corporations and other forms of corporate welfare. These are the real “bad debts”, they destroy the environment, accelerate climate change and fuel the arms trade in death and destruction.

The social security section of the budget is based on the 2015 McClure report with the aim of changing, controlling and restricting the way welfare recipients live, what they spend their money on and where they can spend it. It is all about reducing government spending and blaming the victim.

“Mutual Obligation”

From September 20, 2018, the government is set to introduce a new set of tougher “Mutual Obligation Requirements” for income support recipients.

Annual Activity Requirements can be met through the participation in voluntary work. In addition, job seekers can meet the participation requirement through a range of other activities, including Work for the Dole, part-time work, part-time study, accredited language, literacy and numeracy courses, Australian Defence Force Reserves and other government programs.

“Mutual obligation must be cornerstone of any working age payment redesign and the central obligation should obviously be the requirement to prepare for, to search for and to accept work,” Porter said in an address to the National Press Club in September 2016.

Welfare recipients who do not take a “suitable” job that is offered to them face a penalty under a “three strikes and you are out” demerit system.

Cutting a person’s income is a callous, punitive measure which makes it even more difficult to find a job, can result in homelessness, health issues and even suicide, particularly amongst young people.

“But mutual obligation can be very successfully applied further to greater effect, as we have seen, with the obligation to vaccinate children,” Porter told the National Press Club.

“If it works there, why could mutual obligation not also extend in appropriate circumstances to [an] obligation to refrain from excessive alcohol or from illicit drug use, where evidence clearly shows it creates barriers to employment.”

This form of coercion was applied in the budget. New recipients of NewStart will be subjected to a random drug-testing regime on a trial basis. The argument given for this measure is that 2,258 unemployed used substance or alcohol use as the excuse they did not meet their job hunt obligations.

Those who test positive will be put on the Cashless Debit Card for their payments and be subject to further tests, according to Morrison. The card will restrict what they can spend their income on and where.

There is no additional funding to assist people with substance or alcohol abuse problems. Punitive drug testing will only push already vulnerable people into more precarious situations, such as homelessness, violence and crime.

What is required is the allocation of funding for the adequate provision of publicly funded alcohol and drug rehabilitation programs and services including public housing and mental health to address related social and mental problems.

Older unemployed targeted

Job seekers aged 60 to the age pension age will have 10 hours of Annual Activity Requirements per fortnight, which can be fully met through volunteering. Previously, these job seekers did not have any Annual Activity Requirements, and while they could undertake activities, such as volunteering, they did not have any formal requirements to do so.

Job seekers aged 55-59 will now only be able to complete half of their Annual Activity Requirements through volunteering, where previously they could complete all of it through volunteering (there are now more than 65,000 registered charities in Australia).

This includes many workers with chronic work injuries who have been kicked off workers’ compensation and have no hope of being re-employed when competing with other workers for jobs.

Young unemployed targeted

In a similarly humiliating and cruel fashion, young unemployed workers are targeted. University and TAFE fees are set to increase, with students to repay loans earlier, with classes larger and more courses cut.

One in three youth are unemployed or underemployed. They face cuts to penalty rates if they do weekend work, housing is unaffordable if they are not living at home. Study is also increasingly in the realm of the unaffordable.

These tougher measures will increase the number of working poor as low income workers compete with NewStart recipients who are under pressure to accept any job offered and are not in a position to object to breaches of minimum wage rates, safety and other conditions.


Porter speaks of the Priority Investment Approach, as a very significant, maybe close to revolutionary, new direction in welfare reform. “We have constructed a purpose-built data system. It collates all the welfare information that we have collected across Australia, over the last 15 years – in all 24 million Australians,” he told the National Press Club in September 2016.

“When we started this process and looked at both mutual obligation and participation and compliance, we went back and collected every piece of data that we could put inside the system, so we could track what people’s behaviours were,” he told the Sydney Morning Herald.

“A lot of this is about trying to engender better behaviours and discourage bad behaviours and it’s at that point that we started uncovering groups in the system, not large groups, but significant groups who were falling through the cracks … data sets will help the government decide where it needs to come down heavier.” [Emphasis added – Ed]

“Initially, we will be looking to target those groups identified, but it won’t stop there, future rounds can and will focus on other groups that we’re looking at:

  • “Recent exits from the welfare system.
  • “Older people entering carer payment and exiting carer payments.
  • “Parents whose youngest child is approaching the age that parenting payment ends.”

“Budget repair”

Budget repair should not be on the backs on the poor and most disadvantaged. All workers and members of the community should be concerned about the proposed changes to social security system.

The time is long overdue for cutting the billions of dollars in subsidies and tax concessions to be big corporations and make them pay their taxes.

Social security recipients lack the power to exert the necessary pressure on the government, the Labor Party and cross-bench Senators to block these proposals. To all intents and purposes the government has thrown them on the scrap heap as to being of no value in the future to capitalist employers. It will be up to the trade union movement, wider community and left political forces to defeat them.

It is time to reassert long-held principles of collective responsibility of government for wellbeing of the people.

Next article – Editorial – Trump in the decapitation kingdom

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