Welfare 'reform' aims to attack the poor
The Coalition government is carrying out a "reform" of the social security, or "welfare", system. This is part of its multifaceted policy for shifting the burden of the problems of the economy onto poor and working people.
A year ago the government had a series of proposals ready to extend the "participation" requirements of "mutual obligation" which had already been imposed on younger unemployed people, to older unemployed people, sole parents and people with severe disabilities.
In September the government commissioned a review of welfare by a "reference group" to support its plans. The group has recently published its final report, "Participation support for a more equitable society" — more commonly called the McClure report after the group's chairperson, who also heads the charity organisation Mission Australia.
This group has proposed changes similar to those the government would have announced. The advantage to the government of the review is that many groups that advocate for social security recipients or carry out welfare activities, along with political parties, business representative organisations and government departments, have been drawn into the discussion of what the government is proposing; their responses to various welfare "reforms" have been tested.
The review group has thus taken a careful measure of "community norms and expectations". It then honed the arguments and planned the steps for the government to end people's right to welfare — all without even the minimal accountability of the test of electoral popularity for what has been proposed.
Pretended balance
The group's concern about how the changes are seen to be done begins with the starting point for its recommendations: "Central to our vision is a belief that the nation's social support system must be judged by its capacity to help people participate economically and socially, as well as by the adequacy of its income support arrangements". In these words, the report falsely claims for itself a balanced and sensitive approach to the interests of both social security recipients, whose growing numbers supposedly indicate a growth of "welfare dependency", and those of society.
The report does not consider the adequacy of social security payments. "We have not attempted to assess what represents an adequate level of income support", it admits, continuing "we emphasise the importance of maintaining adequacy". Thus the report assumes the payments are adequate and makes no recommendation to increase them, even though pensions are held only at the relatively stringent Henderson poverty line and other payment rates are lower.
Even worse, the report completely ignores the plight of people unable to obtain any social security payments, including many migrants and young people.
Nor are the "mutual obligations" the report recommends the same in character for all. Only social security recipients — not governments or businesses — face new legal requirements backed "in the last resort" by financial sanctions.
Social security recipients who are sole parents and the partners of the unemployed with children aged 6-12 will be required to attend annual interviews to discuss possible participation, principally in work or training for it. Those whose children are aged 13 and over must undertake work or preparation for it.
The report suggests "most ... are likely to participate willingly", but some will need to be "actively persuade[d]" and "compulsion will be required for a minority", presumably through the existing process of cutting payments for "breaches".
But when it comes to businesses discriminating against, say, sole parents, when hiring, the report hopes that steps against discrimination could perhaps become "codified through the development of social reporting systems to quantify and audit social performance". This is similar to current affirmative action for women, where the worst penalty offending corporations face is to be named publicly.
The report recommends non-discriminatory behaviour to business as a means of "safeguarding their licence to operate within the community and position[ing] their brand ... leading to long-term shareholder wealth". But business never hesitates when the choice is between public relations and profits. For example, in an August 23 hearing of a federal parliamentary inquiry into electronic and telephone banking fees, the acting chief executive of the Australian Bankers' Association bluntly responded "No" when asked whether he thought banks had a social obligation.
The "obligations" proposed by the McClure report for corporations and the government are pious hopes; for social security recipients, they are legal requirements. This pro-corporate skew is reinforced when the report states, "the key responsibility of business is to generate wealth, to provide sustainable employment and the contribution of taxation revenue" — that is, nothing more than it claims to do when it is making profits — while "participation" is made a criterion for receiving social security income support.
Common payment
The report criticises the "array" of social security payments as "overly rigid and complex", and proposes instead a common payment, if the participation criterion is met, supplemented by additional needs-based payments.
The payment of social security to defined categories of people at least expressed the right, if you belonged to that category, to get the payment. The report proposes instead making payments depend on a person's actions, following assessments by a "gateway" to income support.
In return, the report offers "assistance ... targeted according to individual needs", which sounds very nice until it is qualified by the requirement to be "cost effective (in terms of return on investment)".
The "investor" is not the social security recipient, of course, but the government. For this "investment", it gets the right to assess and direct the "participation" (work and other social activity) of both social security recipients and low-paid workers, who will be offered income support as a supplement for their low wages.
The already significant reporting requirements of recipients and the surveillance by government agencies will increase. The result of "participation" will be an increase in labour force supply and "voluntary" unpaid labour, both putting downward pressures on wages; many of the potential workers will be vulnerable to extraordinary exploitation by employers due to their socially disadvantaged positions. This "need" is satisfied by increasing obligations on individuals.
The report proposes a study to determine how great the effect on labour supply will be.
Yet, as Ross Gittins notes in the August 23 Sydney Morning Herald, the increase in "welfare dependency" in the last three decades is mainly a result of higher unemployment levels, including the hidden unemployment of people on pensions and discouraged job seekers. "The point is, first, that it's illogical and unfair to hold the individuals involved responsible for their failure to be in the workforce like the rest of us and, second, that no amount of encouragement or compulsion will get them to take jobs that aren't there."
This remarkably honest assessment for a establishment media economic commentator is offset by his claim that there is now "genuine improvement in unemployment". Even federal treasurer Peter Costello believes official unemployment can be reduced only to 5% — 500,000 people — after four more years, or 13 in total, of solid economic growth. Beyond these unemployed are half a million involuntarily part-time employed and a million more who would like to work. Business and its governments are failing and will fail to meet any "obligation" to provide "sustainable employment" for everyone who wants to work.
The very weaknesses of the McClure report, however, serve as a strength in reaching its goal. It says a great many things — quite enough to ensure that almost anybody can find "good points" and "bad points" to offer up in a balanced "criticism". Those long experienced in this art, like the president of the Australian Council of Social Service, Michael Raper, have had yet more practice.
"Mutual obligation" is working, in part, to divide and rule among welfare agencies and activists. The secretary of the Sole Parents Union, Mandy Dunn, told 91×ÔÅÄÂÛ̳ Weekly she believes the McClure report included an agenda of outsourcing of "individualised" services, so that the government could "cherry-pick" among policies that would otherwise cost billions of dollars.
Mission Australia, the Salvation Army and other charitable organisations could expect to pick up part of this work. Dunn welcomed the call by Anglicare in Tasmania for welfare groups to refuse to assist in the further implementation of "mutual obligation".
BY JONATHAN STRAUSS