As we enter the business end of the election campaign, with pre-polling underway, there is a profound lack of any social welfare policies on offer from either major party. The Greens have now put up proposals, mainly to raise the levels of some of the basic welfare payments in line with wide recommendations, including from the Business Council of Australia.
The bipartisan silence suggests that neither Labor nor the Coalition are keen to engage in this area, despite their frequent promises of fairness and trust. Their focus on working families or agile entrepreneurs fails to tackle the needs of those who are not contributing paid work hours.
There are signs of seriously disengaged voters, both here and overseas. For example, voters in the US and EU are rejecting major centrist parties because they are concerned about possible market failures. Even the International Monetary Fund is suggesting the need to tackle increasing inequalities.
As anxieties about growth and the damaging limits of trickle-down wealth theories are becoming more apparent, it becomes more urgent that financial poverty be addressed. The erosion of social cohesion around the world is creating more populism and rejection of centrist parties, which happened most alarmingly in the 1930s.
In Australia, neither major party seems willing to engage with positive changes to welfare policy and income support, assuming instead that these will be fixed by more jobs and growth. Electorally, this is also shortsighted, as more than one-third of the more than 15 million registered voters are not in the paid workforce.
Many of these voters depend on full- or part-income support payments for a range of reasons: they care for others, there are no jobs for them, or they are excluded by the prejudices of others. Despite these barriers, many also meet a wide range of unpaid needs and support community well-being.
Both major parties, when in power this century, have failed to tackle the increasing gap between the jobs available and the number of job seekers. Now, in what is deemed to be full employment, there are still far more job seekers than jobs: 165,600 listed vacancies earlier this year were followed by the listing of 726,600 active job seekers.
We need to add to these numbers estimates of perhaps more than a million to account for the “discouraged workers”, many of whom have been on benefits for more than 12 months. These are people that employers won’t employ, the single parents whose incomes Labor reduced in 2011, who still can’t fit together work and care.
This number also includes the extra Newstart recipients, formerly deemed disabled, now dealing with personal limits and employer discrimination.
Both major parties only specifically address the voters who are not substantially in the paid workforce. They exhort them to start or increase their paid activities so they are not deemed to be drains on public funds. This creates long-term damage and undermines social cohesion.
Scaring people about welfare costs is a classic conservative tactic, overlaid with self-interest. This is despite much evidence that Australia has one of the tightest-targeted, and often inadequate, income-support systems. St Vincent de Paul, the Salvation Army and the Australian Council of Social Service are all asking for voters and parties to remember the “poor” and make sure their need are considered.
The Salvos' Economic and Social Impact Survey showed how:
… children are hugely impacted by welfare inadequacies, moving house multiple times a year, moving schools and missing out on medications, dental checks and even access to the internet due to extreme poverty with some single parent families living off less than $16 a day after accommodation expenses.
So far these pleas have had little serious attention – except from the Greens. Labor has suggested another review, which delays any action and is as unlikely to create action as the two earlier inquiries by Patrick McClure.
Welfare dependency is usually framed as the result of people’s sins and failure to try. But there is little doubt that they also encounter structural barriers. Many lower-level jobs are gone or going, with technology replacing workers and slowing demand for market goods.
These changes suggest the need to reconsider income-support policies, which is recognised in other developed societies. There have recently been a number of articles in Fairfax Media on overseas debates on possibilities of introducing new payment types, such as a universal income. Some EU and US trials are underway, and a recent plebiscite in Switzerland showed nearly 25% of people agreed on such a payment without any formal or official support.
The idea has a long history, but recognition that there may not always be enough adequately paid jobs for everyone has given it renewed momentum. So, the question is how we design universal payments that offer stability and well-being while accommodating change and mobility.
Unfortunately there are no signs of such enlightened views from either major party – in fact, quite the opposite. The only signs of change are backwards moves that impose more controls over recipients.
Despite the lack of any evidence that most of those on welfare benefits are either incompetent or irresponsible, in 2007 the Coalition started trials of the BasicsCard, which initially controlled 50% of income in some Indigenous communities. These trials were continued and extended by Labor.
A further “refinement” is being trialled now as the Cashless Welfare Card, despite none of the evaluations finding significant benefits.
It seems neither major party recognises the structural causes of unemployment and so cannot solve the social problems associated with it. This makes it unlikely that they will explore ideas for universal payments that could reduce the ill-effects of structural poverty and fix the structural inequity problems that create divisive societies.
Authors: Eva Cox, Professorial Fellow, Jumbunna IHL, University of Technology Sydney