4.
Concerns and Critique
In this section of
our submission we explore our concerns about some aspects of
the Discussion Paper and critique some of the assumptions on
which it is based.
The Problem is
Poverty not Welfare Dependency
The use of the term
'welfare dependency' suggests both that individuals are responsible
for being poor, and that the government's only agenda is to
reduce welfare spending. Instead, the government should talk
about the challenge of providing people with alternative forms
of income principally through increased employment opportunities,
taxation, affordable education and housing and address other
broad policies that influence welfare such as regional development.
The Discussion Paper, in identifying 'welfare dependency' as the problem,
lumps unemployed people, people with disabilities, sole parents
etc together, in spite of the fact that the causes of their
various situations are very different.
A further risk in
the use of the term 'welfare dependency' is that it could lend
credence to the myth that many Australians are 'rorting' the
welfare system. 'Rorting' is a term with many nuances in the
Australian language. One aspect is widespread fraud. The evidence
is that the incidence of fraud by welfare recipients is extremely
low. We need to guard against characterising the incidence
of fraud in a way that becomes a sweeping attack on the integrity
and social responsibility of the overwhelming majority of social
security recipients, seeking to rise above their difficult
circumstances. We should not forget that it was the structural
change of the 1980s and 1990s that contributed on the one hand
to increased prosperity, but on the other, to an increased
number of victims of market failure legitimately seeking assistance
from the State. The mistaken identification of the real problem
gives rise to the suspicion that the government's intention
is not to identify the causes of 'welfare dependency' and make
the necessary changes, but rather to cut welfare costs by declaring
some people ineligible for the benefits they currently receive.
Structural Factors
Responsible for Unemployment
The focus of the
Discussion Paper is on the individual welfare recipient rather
than the structural factors which have led to their being on
welfare to begin with. This is particularly significant in
relation to unemployment. It gives the impression that the
government believes that if those who are unemployed had more
skills, motivation or support, they would be successful in
their search for jobs. Yet, at the very time this paper was
in preparation, in July 1999, there were 770,000 people unemployed
and 73,000 advertised jobs. No matter how highly skilled, motivated
or supported people are, the economy is simply not generating
anywhere near enough jobs for all who want them.
The Absence of
a Link with Employment Creation Strategies
A major focus of
the Discussion Paper is preventing welfare dependency among
people of workforce age. People who are unemployed make up
the largest group of welfare recipients - around 30 percent.
The most effective way of freeing these people of welfare dependency
is to create jobs for them. Yet there is hardly any reference
in the paper to employment strategies. Even if it is granted
that there is a need for reform of the welfare system, such
reforms should surely dovetail with an employment strategy
such as that outlined by the National Council of Church's recently
published position paper, A Covenant for Employment (Sept
1999).
A Tendency to
Downgrade the Significance of Unemployment as a Contributing
Factor in the Growing Incidence of Welfare Reliance
Senator Newman's
Discussion Paper stresses the fact that unemployed people are
outnumbered by all other welfare recipients taken together.
She claims that most people on income support are not the
unemployed (page 5). While this may be true, the unemployed
are still a significant population group in receipt of income
support from government with numbers exceeding other population
groups. It is also important to consider the spatial dimension
of unemployment figures. As well as considering overall national
figures, the geographical location of these unemployed people
is instructive for policy development.
Further, with the
reference to a decline in unemployment since 1993 it
could be argued from the associated graph that there was a
similar decline in 1973, 1978, 1986 and 1989. In each case,
however, these declines were followed by progressively higher
peaks - to 2.4% in 1974, 6.1% in 1978, 9.9% in 1983 and 10.5%
in 1989. No case is put forward that the present decline will
not be followed by another peak in unemployment, and it is
impossible to deny that the real trend in unemployment over
the past 25 years is upwards.
Worklessness
The term "worklessness" is
used on a number of occasions in the Discussion Paper.
The use of this term is demeaning to those who are without
jobs. Many of them work hard on valuable tasks ranging from
self-development and education to child rearing and to volunteering
in community organisations. The use of this term suggests that
the author of the paper regards a paid job as the only form
of work.
Further,
there are many people in the community who are not in the
paid workforce
because they are carers or have a disability. They make
a significant contribution to the social fabric of Australian
society. In this context, the word "worklessness" is
misplaced.
Supporting Parents
who Want to Work
The Discussion Paper
refers to the people in receipt of parenting payments and raises
concerns about parenting responsibilities keeping those people
out of the workforce for lengthy periods, in which time paid
work skills are lost. The funding and provision of affordable
and flexible quality childcare is critical in creating an environment
in which sole parents can be assisted back into meaningful
jobs and in overcoming this perceived loss of work skills.
Commenting on the
increasing cost of childcare, Adele Horan has noted:
If the government
is serious about preventing welfare dependency, if it wants
to reduce the growth in sole-parent pensioner numbers without
producing a nation of latchkey kids or backyard minders,
it has to do something about these costs. (Sydney
Morning Herald, 13 November 1999)
Any program for getting
sole parents into the workforce must be balanced by responsiveness
to family commitments. This is a factor for industrial relations
policy - making work places more family friendly.
Cuts to Social
and Labour Market Programs
Since 1996 the Federal
Government has reduced funding to a number of social services
including labour market programs and childcare. Most people
defined as 'welfare dependent' rely on such programs and services
and as a result of cuts in these areas have been cut adrift
from opportunities to move out of long term reliance on welfare.
Contradictory
Family Policy
While the Federal
Government is providing incentives for one parent in higher
income families not to work, supporting parents are being targeted
to work under the proposed reforms. This issue was highlighted
by Brian Toohey where he referred to government spending on
family and youth support:
A key component
of the changes entails lifting the tax-free threshold,
again boosting the cost of middle-class welfare. Confusingly,
the changes are partly intended to encourage women with
children to stay out of the workforce- the exact opposite
of what Tuesday's proposed welfare crackdown is supposed
to achieve. (Financial Review, 13 November 1999)
"Welfare
to Work" in the USA - A Case Study in Theory and Realism
Evidence from the
United States regarding the Welfare to Work Program initiated
by the Clinton Administration in 1996 indicate mixed success
with these reforms. Studies conducted by the Urban Institute,
almost three years after the radical overhaul of the nation's
welfare system confirm that the numbers of people dependent
on welfare have fallen more dramatically than anyone expected,
but warns that many of those leaving welfare for the workforce
struggle to afford basic life essentials. A report in The
Washington Post on 3 August 1999 stated that:
The Urban Institute
study included some sharp warnings about the precarious
position of the poor at a time of general national prosperity,
and suggests that many people who leave public assistance
remain trapped on the lower rungs of the economy. In particular,
most women who leave welfare are working in low-wage service
jobs, and a significant minority says they have trouble
providing food for their families or paying rent.
The study itself
concludes:
More than a
quarter (of low-income women) at work are on night schedules
and over half are struggling with coordinating work schedules
and childcare.
Unpublished analyses
of welfare reform in the United States demonstrates the fact
that the instability and low pay of many jobs available to
welfare recipients and the conflicting demands of work and
family make leaving welfare very risky. One such study sums
up the situation:
The
new rhetoric about "personal responsibility" has changed the
framework of the relationship between government and welfare
recipients in a positive way. Bur there are also concerns
that, although many of these individuals are becoming self-sufficient
and independent, they are simply joining the ranks of the
the "working poor" and are really no better
off than they were on welfare. (Rose, 1998)
In summary, two important
considerations emerge here:
1. ensuring that
children do not suffer adversely in the rush to get their
parents off welfare;
2. ensuring that
people are not simply recycled from welfare reliance into
the ranks of the working poor.
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5.
Mutual Obligation
Mutual obligation
is in vogue in social policy discourse at present, at the highest
levels of government.
In May this year
at Australia Unlimited Roundtable the Prime Minister said:
The principle
of Mutual Obligation needs to be further strengthened and
greater personal responsibility fostered.
On the surface mutual
obligation sounds reasonable. Mutuality is good. It is relational.
It is co-operative. It is caring and reciprocal. It seems to
be consistent with building a society based on the common good.
However we need to look more closely and interrogate just what
it means.
For example,
in adopting the language of "mutualism" is the
Government endorsing other key tenets of mutualist movement,
namely that it:
- acknowledges
the inadequacy of both market and state socialist solutions
to social problems and seeks an alternative path on mutual,
reciprocal and equal social relationships;
- responds to specific
situations, especially enabling people themselves to establish
suitable mechanisms to meet their own needs - cooperatives
of all kinds, friendly associations and credit unions;
- upholds the devolution
of power and actively promote social inclusion;
- upholds cooperation
rather than competition;
and above all
- is based on the
freedom of the individual to choose, and not on imposed laws
and coercion.
Is this
the philosophical basis behind the adoption of "mutual obligation" as
a key tenet of social policy formulation? Or, is this terminology
simply selectively borrowed from the discourse of mutualism
to serve a more pragmatic political objective? Namely,
to satisfy middle Australia that the welfare dependent
are not getting a free ride!
At first sight the
policy of mutual obligation appears to be quite a reasonable
suggestion. The individual does have responsibilities towards
the community, as the community does towards the individual.
But the Prime Minister and Senator Newman don't take this concept
deep enough. For example, in the area of employment, the most
important strategy for social welfare, the first obligation
is on the community to create the sort of economy that will
provide work for all who need it.
As well as Catholic
Social Teaching, other internationally recognised bodies uphold
the right to work:
Everyone has
the right to work, to free choice of employment, to just
and favorable conditions of work and to protection against
unemployment. (Article 23, Universal Declaration
of Human Rights)
There is an obligation
on the part of society, and therefore of government, to ensure
that there is work for all. Successive governments in Australia
have clearly failed to fulfill this obligation, and that is
why unemployed people receive an allowance. It is compensation
for the prior failure of government to ensure jobs for all.
If we are to talk about mutual obligation in relation to employment,
this is where we should begin.
In recent years,
it has become clear that maintaining high employment is seen
as a price that the community has to pay for a low inflation
rate. Of course, only those who are unemployed pay this price.
It is simply not true for Senator Newman to suggest that some
people on benefits believe that the taxpayer owes them something
for nothing. The taxpayer in fact owes them something for
the role they play in keeping inflation at levels we all enjoy,
levels that the government takes credit for having achieved.
One further observation
on mutual obligation is drawn from Aristotle who said:
There is nothing
so unequal as the equal treatment of unequals.
We are not suggesting
that people on welfare payments are intrinsically unequal.
We uphold the dignity of all human beings and their intrinsic
equality. However, our society is characterised by great divisions
of economic and political power. If the poorest are having
to meet social obligations which others, by virtue of their
economic power, are not obliged to meet, then we would argue
that this is unequal and unjust. One case is illustrative of
this point. As a society we expect a middle-aged, long-term
unemployed male to participate in a mutual obligation arrangement
while, at the same time, we do not challenge the prevailing
view among many employers that anyone over 40 years of age
is not a desirable prospect for employment.
As we have argued,
mutuality, by definition, involves more than one party.
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6.
The Ongoing Consultation Process
The Green Paper process
needs to be a comprehensive, broad-based process of consultation
with:
- people in receipt
of social security payments;
- representatives
of community service agencies; and
- other key stakeholders.
They all need to
discuss and give feedback about proposed reforms and provide
options and ideas which may not be included. The consultation
process also needs to be adequately resourced, in time and
money, to ensure the full participation of all stakeholders.
For example, it is desirable that the body charged by the Government
to engage in consultation, travel to regions of Australia to
receive public submissions and meet with representatives of
the groups nominated above. It is vital that those making recommendations
to government have first-hand, direct experience of the life
situations of the people on whom policy reform will impact.
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7.
Conclusion
We support the process
which seeks to reform the welfare system by moving away from
reliance on the minimalist safety net to supporting policies
which breakdown welfare dependency and give people greater
independence. However, such a reform process must be based
in reality and not be ideologically driven. The fact is that
we are living in a society in which there are significant and
increasing disparities in personal and regional incomes and,
linked to this, a growing disparity in opportunity. Australian
is much less equal now than it was several decades ago. We
argue that the welfare reform process must consider the structural
forces which have led to this situation and develop a comprehensive
response accordingly.
With more time available,
we look forward to receiving the Green Paper and commenting
upon it in detail next year.
Return
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Bibliography
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for Industrial Relations Research and Training (1998)
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Sydney
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Nation's Great Divide Widens. The Courier-Mail,
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(1999)
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