Too little too late on Newstart, Bill and Albo — you had the evidence to act

Labor leadership contenders Bill Shorten and Anthony Albanese had the evidence proving their cuts to Newstart were unfair. Their support for increasing parental support now is cold comfort.

The belated acknowledgement by the two Labor leadership contenders that cutting single-parent payments had been a mistake is sad — they should have fixed it a few months ago while they still had the power.

Most of the sole parents moved off the higher levels of payment were already working part time, so claiming that dropping their income was to encourage paid work was cruel and wrong. There is also lots of evidence that cutting the payments and the taper do not encourage job retention or further participation; far fewer of recipients are in part-time work than those who were on parenting payment, so the cuts basically severely penalised those sole parents with appropriate part-time jobs who tried to do the right thing.

When advocates tried to point out this error of judgement earlier this year the Labor government failed to listen. Now Labor MPs are prepared to acknowledge their errors. Anthony Albanese on the ABC’s Insiders yesterday:

Sole parent payments is an area where we made a mistake. [It] essentially meant that some of the most vulnerable people ended up with less income. But perhaps just as importantly to them, to those that I’ve spoken to, there was a lack of respect, I think, for the role that they play.”

Bill Shorten told his supporters in Queensland yesterday:

We need to revisit our policies to do with sole parents. We need to actually say that if you are a sole parent, raising your kids, making sure that you can work and develop income, we need to make it unambiguous that Labor is in your corner. We respect you, we support you, we cherish you.”

What a change from the tone in a letter, sent to a protesting sole parent, on March 6 by Steve Michelson, then the employment adviser from Shorten’s office:

Newstart allowance is designed to provide a balance between financial support and incentives to find and maintain employment. Transitioning parents onto Newstart Allowance creates better incentives for parents, including single parents, to return to the workforce …”

The same adviser obviously failed to understand the departmental statistics, which he sent me in an email on April 18 — these show clearly that well over half of the sole parents who were moved to the lower payment in January 2013 were already employed. To quote him:

The 67,221 grandfathered single parents figure quoted by Ms Cox is from August 2012.

  • On 1 January 2013, 63,254 single principal carer parents were transitioned from Parenting Payment Single.
  • Of the 63,254 single parents, 36,749 reported earnings and 25,576 reported no earnings.
  • Of the 36,749 people who reported earnings, 32,666 had earnings under the Newstart cut-off threshold, while 4,083 had earnings sufficiently high enough to mean they would not be eligible for Newstart.”

This shows the Labor government had the necessary data to disprove its own claims. Labor’s decision to move sole parents onto Newstart also failed to recognise that many of those not in work were often not even obliged to look for work — the government clung to its cost-saving measure, targeting an assumed unpopular group and ignoring the lack of an evidence base.

The problem is now back in the hands of the Coalition, as it was in 2006 when John Howard initiated the original welfare-to-work policy of shifting sole parents to Newstart. Some 40,000 had already been transferred slowly over the intervening years, but there is no evidence the shift has improved their job tenure levels. It was silly of Labor to move the grandfathered group of parenting payees onto Newstart.

There are now still thousands of sole parents who are finding difficulty meeting their rent, whose incomes fell substantially for no good reason. Social Services Minister Kevin Andrews must decide whether cutting sole parents’ income is a good family supportive measure or whether he should recognise the value of their parenting  by raising their income beyond the obviously inadequate Newstart levels.