The poor get poorer while the rest get the handouts

Date

December 15, 2012

 

WHEN will Julia Gillard’s government find the courage to raise the dole? Her party’s website tells us it is working for a ”fairer Australia”. But while middle-class welfare endures, our poorest citizens are living far below the poverty line.

We’ve been hearing the figures for so long that they’ve become a kind of mantra. Single adults on the Newstart allowance live on about $35 a day. That’s $246 a week. Pensioners now get $386 a week. The poverty line for a single person is $358 a week.

The Business Council of Australia and economist Ken Henry – hardly bleeding hearts – have called for the dole to be raised, along with unions and welfare groups. St Vincent de Paul’s Dr John Falzon has said it’s a matter of deep shame that unemployment benefits are kept low deliberately ”as a means of humiliating the very people they were originally designed to assist”.

A Senate committee investigating the matter received moving submissions on the dole’s inadequacy but couldn’t bring itself to recommend an increase. It’s chairman, Liberal senator Chris Black, later told Age journalist Peter Martin there was a ”compelling” case for increasing Newstart. But it seems that since his party might be in government soon, he didn’t want to make it. Two Labor senators on the committee did make the case, calling on their government to increase the allowance for single people – the group suffering most under current arrangements. Single unemployed folk, need it be said, aren’t part of Gillard’s beloved ”working families” demographic.

Newstart is now so low, says the Business Council, that it’s likely to be a barrier to employment. ”Trying to survive on $35 a day is likely to erode the capacity of individuals to present themselves well or maintain their readiness for work.”

How do you hunt for a job if you can’t afford a train fare to get to an interview? Or decent clothes? What if you don’t even have a permanent address to put on a CV? While Newstart was envisaged as temporary support, more than 60 per cent of recipients have been unemployed for more than a year. As one welfare group put it, Newstart is a pathway to poverty – not a job.

Over the past year, I have been recording my interactions with beggars for an essay published in the latest Meanjin. ”Why give to beggars in a welfare state?” a friend asked when I told him of the project, and it’s a valid question. One answer might be because the dole is simply not enough. People beg for many reasons – opportunism, addiction, convenience, desperation – but some, it seems, are begging just to get by between meagre benefits.

Reading some of the submissions to the Senate inquiry, it’s clear that for a significant minority of Australians, life has become a degrading struggle to make ends meet. More than 80 per cent of people on Newstart are renting, about half of them in the private market. Private rents are exorbitant – even if you qualify for rent assistance of up to $60 a week.

High rents drive poor people into outer suburbs, where public transport is infrequent and costly. Welfare agencies tell of a huge demand for emergency food relief, too. Then there are other costs – from the price of tobacco, for smokers, to servicing inflated short-term loans. As ”Graham”, a Newstart recipient, told researchers at Melbourne University, ”Living on the dole is not living, it’s surviving”.

At Christmas, when the pressure to buy stuff reaches a secular crescendo, the struggle to keep up gets harder. One man I met on the streets told me he had used money earned selling cards to buy a Christmas present for his teenage son. When I mentioned this to a friend who works as a criminal lawyer, she said, ”you’d be amazed how many of my clients steal to buy Christmas presents for their kids”.

The Greens and others want a $50-a-week boost to the single Newstart rate. (A broader, costlier reform would involve indexing the dole in a similar way to pensions.) Where might that $50 a week come from? New research by the Australian Bureau of Statistics shows the richest fifth of Australian households receive nearly half of all wages paid – and also get 12 per cent of government assistance. The second-richest fifth get 11 per cent.

Middle-class welfare is thriving in the form of the childcare rebate (not income-tested) and the still generous baby bonus.

The rebate is apparently aimed at helping mothers stay in jobs. This is a laudable goal. But really, whose need is greater? The family earning $130,000 a year and getting a $7500 government refund for childcare? Or the unemployed person struggling to feed, clothe and house herself on a pittance?

As a society, we must surely be judged on how we treat those most in need. Means testing the childcare rebate is long overdue.

The committee recommended lifting the amount that Newstart recipients can earn to the equivalent of six hours a fortnight at the minimum wage. This is great for those who can get work, but what if you can’t? The committee cautioned against ”increasing financial incentives” to stay on the dole – yet the dole is so low it is clearly cementing disadvantage.

Newstart, says the Business Council, ”no longer meets a reasonable community standard of adequacy”. Yet a Labor government – in power for five years – has kept it brutally low. What a topsy-turvy world we live in.

Suzy Freeman-Greene is a senior writer at The Age.