Welfare and families: has Labor screwed over the poor?

Prime Minister Julia Gillard makes it clear her government stands for Labor values, but are her positions really that different than the Coalition’s? When it comes to government handouts, the answer increasingly seems to be no — both the John Howard and Gillard governments clearly divide income-support recipients into “deserving” (aged, very disabled, full-time carers) and undeserving working-age recipients with no or inadequately paid jobs.


Over the past six years the government has tightened restrictions on who is eligible for higher-level pension payments, curtailed payments to single parents with children over eight and implemented stricter criteria for receiving disability payments. Since January this year more than 60,000 single parents were moved from parenting payments to Newstart.

Single parents have lost between $62 and more than $120 per week, with the highest losses for those who were already in paid work. As 60% of those who were moved to the lower payment were already earning part-time pay, in accordance with the policy, it is unclear why they were moved and their incentives to stay in paid work were reduced.

I am trying to finish my last year of teaching at uni, and my 12-year-old has just started at high school,” one single parent emailed me. “I am drowning with the changes. Do I leave my studies, or lose my home? My daughter and I have been counting down until I have a job in teaching.”

On  March 22, the Australian Council of Social Service released new figures showing 100,000 people with disabilities now on Newstart were well below the internationally accepted poverty line used to measure financial hardship in wealthy countries. In the same week, the Joint Parliamentary Committee on Human Rights said:

The committee considers that the government has not provided the necessary evidence to demonstrate that the total support package available to individuals who are subject to these measures is sufficient to satisfy … the minimum requirements of the right to an adequate standard of living in Australia.”

Why are they being kept on a payment that is widely acknowledged as inadequate and is designed as a short-term option?”

One can only assume the government is convinced its regressive income support policies are seen as appropriate by the “working” voters it seeks to reclaim or attract.  By tapping into long-term prejudices against those seen as “dole bludgers”, the government has taken over the “welfare to work” push of the Coalition.

So far indications are it is unlikely the ALP government will make any serious changes to the significant deficiencies of their current income support policies. Despite evidence these policies are not improving the living standards of our most disadvantaged groups, the Labor Party is determined to expand them. The PM’s social inclusion model is very limited, as it is peopled by workers, working families, and more recently, modern families.

This approach is very different from older Labor understanding of the difficulties many have in finding appropriate jobs such as the structural barriers, prejudices and limited job vacancies most face. Gillard seems to confuse the interests of unions with the wider Labor movement, which accepted the structural barriers that create poverty and disadvantage. She and her colleagues accept the neo-liberal view that failures are mainly bad individual choices and lack of personal effort.

This set of assumptions fails to recognise the evidence in the government’s own data on current recipients of the inadequate Newstart allowance. The number of people on the payment in January 2013 was 682 873 in toto, but only 355,178 were also registered as job seekers. This means nearly 330,000 Newstart recipients were officially recognised as having good reasons that exempted them from looking for a job. The incentive to find enough paid work to move on was obviously not effective, as more than half of the job seekers (234,624) had been on the benefit for more than 12 months and that proportion is increasing.

This is not surprising as the competition for jobs for those without recent experience and often appropriate qualifications is very limited. There are, on average, at least four job seekers per vacancy. Many have visible characteristics that raise employer prejudices, with 100,000 people with disabilities now on Newstart Allowance, and this number will increase as the criteria tighten for disability support pensions.

Why are they being kept on a payment that is widely acknowledged as inadequate and is designed as a short-term option? If an ALP government can’t recognise the serious social and institutional barriers, including parenting needs and prejudices against disabilities, then we will see increasing inequalities and poverty. These policy flaws seriously damage claims that fairness is part of Labor values, as well as letting down the most vulnerable people who expect better from this party.