Monday, September 13, 2010

Hitting Australians When They’re Down: Unemployment Payments and the Demonisation of the Unemployed


During the 2007 election, Kevin Rudd’s mantra of support for ‘working families’ caused many a journalistic snigger. During the recent election, the two larger parties were rightly derided for their shameless dog whistling in regard to an irrational fear of a few thousand unfortunate boat people.

But to my knowledge no journalist has admitted that the concept of working families is in itself a form of dog whistling. The unmentionable ‘other’ is of course the ‘non-working family’ – as well as, heaven help them, the single unemployed who have failed to fulfil even their reproductive duties. Julia Gillard’s announcement during the campaign that unemployed people would be stripped of their benefits if they did not turn up to employment interviews was a whistle so clear it could have been heard by every toy poodle in Paris.

In the current climate it is politically unwise to mention unemployed people in the mainstream media, the very group that is most in need of the assistance of government, unless it is in the context of turning them into part of the favoured group – the employed (a worthwhile aim, but not one that justifies starvation-level payments). Both of the larger parties are now willing to alternately demonise and disregard this group of Australians in order to appeal to the ignoramuses in the country’s most marginal seats.

Not only does this process create a convenient scapegoat, but it also makes it easier for the parties to ignore the very real suffering caused by the grossly inadequate welfare payments that unemployed people receive, confident that Australians like you and I won’t be clamouring for change. If the unemployed are inherently shifty, if they are markedly less deserving than aged pensioners and those with disabilities, and if they cannot be trusted to have a good reason for not attending an employment interview, they should be grateful for what they get.

The rhetoric of the deserving and undeserving poor is not simply a matter of semantics; it has huge ramifications for the kind and level of support that people down on their luck receive. After the 2009 bushfires in Victoria, the country watched astounded as an avalanche of community goodwill and generosity blanketed the survivors, many of whom had lost most of their belongings. Donations of goods quickly arrived by the truckload and some people even offered cars and caravans to the victims. The Victorian Bushfire Appeal eventually raised an astonishing $379 million.

Yet later that year the federal government had no difficulty selling the fact that the 2009 budget included a $32.50 increase to disability and age pensions while the Newstart (unemployment) Allowance, already significantly lower than the pension, remained unchanged (in July 2010 it was a miserly $231 a week for a single adult). Perhaps governments fear the goodheartedness of their citizens as much as they fear unpopularity; a fully informed citizenry might clamour for a tax system that funded adequate unemployment benefits, leaving less money for electoral bribes to the pampered middle class.

This situation is all the more offensive given that unemployment is an accepted part of, and even considered vital to, the running of modern growth-based economies. Zero unemployment is said to lead to wages growth, which may lead to inflation, and high inflation is a politician’s worst nightmare. Governments are therefore busy scapegoating a group whose disadvantaged status it is arguably in their interests to maintain. (Outrageous growth in executive salaries, however, is assumed to have no effect on inflation.)

Poor people weren’t always the scapegoats of politicians. Remember Bob Hawke’s impassioned declaration in 1987 that no Australian child would live in poverty by 1990? At the time he was laughed at for having such a lofty and unachievable goal. But compare the urgency of his rhetoric, and the apparent electoral importance of the issue at the time, with the silence on poor children, as opposed to average families, today.

So what’s the situation for those receiving Newstart Allowance in Australia? Here are some disturbing facts:

• About 600,000 Australians receive the Newstart Allowance. More than half of them have been receiving it for over a year.

• The Newstart payment for a single adult was only $33 a day in July 2010. This is almost $120 a week lower than the Disability Support Pension, and less than half the minimum wage.

• In July 2010, a family with two children headed by an unemployed sole parent had to make do on only $460 per week.

• While Newstart has not increased in real terms for almost two decades, in the last ten years electricity costs have nearly doubled (91 per cent), while housing and health costs combined have risen by about 60 per cent.

• The national unemployment rate for 15 to 19-year-olds was almost 17 per cent in June 2010.

• Providers of job services for long-term unemployed people receive an average of only $500 per person to assist them to return to work, less than most other wealthy nations.

In the absence of visibility, unemployed people endure a hardship that the rest of Australia, apart from the welfare sector, largely ignores. Many will be forced to accept food parcels, clothing and emergency payments from charitable organisations. Large numbers will shiver in cold houses or risk getting the electricity disconnected because they can’t afford to pay heating bills. Unemployed single parents will watch helplessly as their children are marginalised through their inability to provide for their educational needs. The threat of homelessness will loom when the rent goes up or a long-term landlord decides to sell. The costs of petrol and public transport, especially for those living in remote areas, may be prohibitive.

In its 2010 election statement, Australia’s peak welfare body, the Australian Council of Social Service (ACOSS), asserted that blaming unemployed people for their predicament was ‘both cruel and pointless’. It called for wholesale reform of the welfare payment system to reflect the cost of living, and for the single adult rate of Newstart to be immediately increased by $45 a week.

Yet from the moment of her ascension to the prime ministership, Gillard’s rhetoric has in effect been moving in the opposite direction, suggesting that first and foremost it is the business, even the duty, of government to reward those who are lucky enough to have work – those good, solid, irreproachable folk who ‘set their alarms early’. In her acceptance speech she affirmed that ‘I believe in a government that rewards those who work the hardest’.

During this speech Gillard acknowledged the role of the entire workforce in bringing Australia through the GFC relatively unscathed – ‘the working people, employers, employees, the trade unions, the small and big businesses, the employer associations who all made this possible’. Yet she failed to commiserate with those whose lives were thrown into chaos due to the rise in unemployment at the height of the GFC.

It’s true that during the GFC many employers, fearing a skills shortage, reduced their employees’ hours rather than sacking them, and good on those who did; it’s also true that the official unemployment rate, which is always far lower than the actual rate, rose to 5.8 per cent, an increase of 1.6 per cent, between May 2008 and August 2009. For Gillard, employers and employees who weathered the storm were worthy of congratulations, but not any former workers that employers had dumped to maintain the viability of their businesses.

This kind of rhetoric signals an astonishing reversal of the self-definition of a Labor government, which has traditionally associated itself with advocating for the disadvantaged. It also ignores one of the most important roles of the tax system: to redistribute the nation’s wealth in order to improve equity.

Objective 3 (a) of the ALP constitution states that the party stands for ‘the abolition of poverty, and the achievement of greater equality in the distribution of income, wealth and opportunity’. Point 23 in Chapter 7 of Labor’s national platform makes a direct reference to unemployment benefits, revealing that the ALP’s aim is, in fact, that they be sufficient to live on. It states that Labor is ‘committed to ensuring that pensions and allowances support a decent standard of living and full participation in Australian society’.

In addition, through the tax system governments of all stripes are required to redistribute resources to make society more equitable. That’s not some socialist goal; it is reiterated in the Henry tax review, which unequivocally states that ‘Australia’s tax and transfer system needs to raise and redistribute revenue efficiently, equitably (my italics) and in a fiscally sustainable manner …’

Sadly, the present low level of Newstart payments is counter to both Labor objectives and the fundamental role of taxation. They fail to take into account the most basic realities of the cost of living – housing, for instance.

According to housing advocacy group National Shelter, rents are rising at a rate three times that of the Consumer Price Index (CPI). In the March quarter 2010, the median rental for a newly let one-bedroom flat in Sydney was $385 – almost $100 more than the single adult rate of Newstart and the maximum weekly Rent Assistance payment ($56.70) combined! In addition, the miserly Newstart Allowance ensures that the costs associated with searching for work – transport, decent clothing, access to computers and so on – are prohibitive.

To make matters worse, the gap between unemployment payments and pensions will continue to widen if the system isn’t overhauled. This is because increases in the former are calculated using the CPI, while pensions increase in line with wages, which are historically higher than the CPI. In addition, Newstart recipients face significantly harsher income tests than do those receiving the DSP, and lengthy waiting periods if they have substantial savings.

If Gillard’s rhetoric uses silence and innuendo to suggest an undeserving poor, the Howard government deployed a metaphorical pick-axe in its wrecking of the public image of unemployed people. Following its 1996 election victory the Coalition began demonising unemployed people with particular zeal; they were lazy dole bludgers who were lucky to get anything.

The government introduced Work for the Dole and the concept of mutual obligation, tightened access to benefits and reduced levels of payment in some instances. Tony Abbott coined the term ‘job snobs’ and reportedly claimed that the welfare state encouraged welfare dependency, while Mal Brough falsely stated that one in six unemployed people were ‘cruisers’ and ‘dole bludgers’ who were exploiting ‘the generosity of the Australian taxpayer to fund their lifestyle choice’.

At the same time, the Howard government reduced the ability of the welfare sector to challenge these negative images by effectively muzzling it. It defunded some advocacy groups, required welfare organisations to provide advance warning of any public criticisms of the government, and threatened to introduce legislation that would take tax breaks away from non-government organisations that advocated changes to legislation, if this advocacy was ‘more than ancillary or incidental to their core purpose’.

The rhetoric of the undeserving poor helped to justify Howard’s refusal to increase Newstart (and pension) payments despite the economic boom, as well as his shameless finessing of middle-class electoral bribery and tax rorts for the wealthy to stay in power (what the Welfare Rights Unit labels ‘upside-down welfare’).

Howard changed the tenor of federal budgets, turning them into Christmas-style handouts for voters who were encouraged to care only about how they would benefit financially. He increased funding for wealthy private schools, introduced a rebate for private health insurance and created a First Home Owners Grant. In 2006, Coalition treasurer Peter Costello announced profligate superannuation concessions that blatantly favoured the wealthy and created a tax rort for older high-income earners.

The Labor government has continued to produce regressive policies and encourage the ‘gimme gimme’ attitude of voters. Its proposed ‘cash for clunkers’ (Cleaner Car Rebate) scheme – which may now be on the scrapheap – is a relatively minor example. The scheme would throw $2000 at those who could already afford to buy a brand new car, and would no doubt be enthusiastically taken up by comfortably-off parents whose university-attending children were currently driving bombs.

More disturbingly, the government foregoes billions of dollars in tax revenue each year by giving generous tax breaks, such as negative gearing, to property investors. (This policy has also contributed to steep increases in the price of property, and therefore helped to fuel rent increases that have worsened hardship for the poor.) Moreover, despite the recommendations of the Henry review, the Labor government has maintained the superannuation concessions for the wealthy, concessions that are costing the country billions. Removing these property investment and superannuation tax breaks would release funds for fairer Newstart payments, so that the poorest Australians could afford the basics.

The mainstream media has been doing little to champion the rights of unemployed people. This year the voice of the social welfare lobby was conspicuously absent from post-budget ABC radio news bulletins, while Lateline did its bit to keep social justice out of the post-budget discussion.

On the program that followed the budget speech of 11 May 2010, the only non-government perspective was given by the dry-as-dust Chris Richardson from Access Economics (Richardson is, in any case, a former Treasury staffer). Predictably he called for the government to cut spending, failing to distinguish between worthwhile and wasteful spending; interviewer Leigh Sales made no attempt to challenge either the social or economic basis for this assessment.

In fact, while the ABC is obsessed with balance, in the area of social justice it makes no attempt to give equal time. Journalists are required to be fluent in the rhetoric and jargon of neoliberalism, so why aren’t they equally familiar with the concepts of social justice, equity and inequality?

On the contrary, seasoned interviewers such as Fran Kelly and Kerry O’Brien repeatedly fail to call politicians to account on the regressive aspects of their budget and election giveaways. Nor do they raise the contradiction inherent in politicians repeatedly saying they can’t afford to fund adequate income support and services for disadvantaged people while blithely handing out tax cuts to those who don’t need them. In the fourth estate, the idea of a nation that supports the ‘fair go’ seems to have been abandoned.

This lack of oversight has enabled the government to make life increasingly difficult for disadvantaged people, the unemployed among them. Initially applied to Indigenous welfare recipients in the Northern Territory, welfare quarantining for non-Indigenous welfare recipients was to be rolled out in the NT from July this year, despite evidence that it doesn’t work. It will apply to long-term unemployed people, some young people on benefits, those deemed to be at risk of financial crisis or domestic abuse and people referred by child protection authorities. At the end of 2011 the scheme will be assessed with the possibility that it could be rolled out nationally.

This scheme costs a whacking $4400 per person on average, money that would be much better spent on family intervention programs – such as those run by Uniting Care, which cost less and are proven to work – as well as treatment for addictions, financial counselling services, greater job search assistance and an increase in allowances. ACOSS has labelled the scheme ‘a top-down, one-size-fits-all, bureaucratic solution to complex social problems’ that is ‘poorly targeted and expensive’ and will ‘inflict shame and indignity on income support recipients’.

In an eloquent example of bipartisanship between the two larger parties, prior to the election Tony Abbott declared that he approved of the scheme and suggested that he would implement it if the Coalition won government.

If governments can get away with such an ineffectual and even harmful policy with little public protest, there is a strong risk that unemployed people will be unfairly targeted in other ways when the economic good times are gone.

The UK offers a sobering example of what can happen when the concept of the undeserving poor takes hold. According to journalist Johann Hari, the people most able to shoulder the burden of David Cameron’s obsession with reducing debt – the wealthy – aren’t being asked to do so.

Instead, in another example of the twisted logic of upside-down welfare, the poor are being hit; the unemployed, for example, will lose £6.50 from the £65 they receive a week. Hari quotes a chilling off-the-record remark made to The Times by a government minister: ‘the undeserving poor are undeserving’. He goes on to show that cutting government spending is not only bad for poor people, but also disastrous for the economy – that is, it will simply create more poor people.

So how to counter both the demonisation of and the silence around unemployment? How to build sufficient momentum in the community to pressure the government to raise unemployment payments to reflect the cost of living?

The human brain thrives on narrative. Australians need to hear the voices and stories of unemployed people themselves, and to begin to understand what their lives are like. Just as Howard knew that it was vital to prevent the media from humanising the Tampa boat people, both the government and the Coalition no doubt realise that if unemployed people were to tell their stories they would receive a measure of sympathy from the community.

The voices of unemployed people can be heard in a report the Brotherhood of St Laurence produced in March this year, Making Work Pay and Making Income Support Work. The report found that the social security and tax systems created significant barriers for people trying to return to work and combining part-time work with welfare payments. It called for ‘a wide-ranging overhaul of income support, housing and employment services’ to ease the transition. But in doing so it also exploded the popular myth that the unemployed are somehow different from, and less motivated than, the rest of us. Conversely, it found that:

… given their personal circumstances, income support recipients are shown to make sensible decisions regarding engagement with paid work … in stark contrast with the stereotypes of welfare recipients as ‘dependent on welfare’ or incapable of making ‘responsible’ decisions …

Indeed, the report concluded that ‘even the most disadvantaged participants held positive attitudes to paid work’. It laudably includes quotes from unemployed people themselves – people like Ian, who says: ‘I want to be cut off the [Newstart] payment as quick as possible … to get back to work, even if it’s just a bit over Newstart, I’d rather do that’.

The welfare sector needs to continue its fight to get the issue of unemployment payments into the mainstream media, and to tell the stories behind the statistics. In turn, journalists need to understand that the experiences of disadvantaged people are vital to presenting a complete picture of this country, and to bringing back the concept of the ‘fair go’; but they also need to realise that news stories that don’t demonise the poor or oversimplify their circumstances make for stronger, more accurate and more hard-hitting journalism.

The policies of both the Coalition and Labor need to incorporate basic fairness for unemployed people through income support payments that enable them to retain dignity and a lifestyle not ravaged by desperate want. The Greens haven’t specified a particular level of increase for Newstart payments in their policy platform, but say they want to ‘simplify the system of targeted pensions and allowances into a universal guaranteed adequate income scheme’. Now that they have obtained the balance of power in the Senate, it’s vital that they push to bring unemployment payments into line with pensions. They should also maintain their opposition to welfare quarantining.

Unemployment can happen to anyone who is an employee, and a fairer, more cohesive society benefits every single one of us. Our new minority government needs to foster in this wealthy country a generosity of spirit and an understanding of the right of every Australian to a standard of living that preserves dignity, enables participation and provides the basis for creating a better future.

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