By Pip Hinman
Welfare rights groups have criticised the budget, saying that more than 30% of the expenditure cuts unfairly target people on low incomes. Michael Raper, director of the NSW Welfare Rights Centre, described the new social security measures as "harsh, counterproductive and inefficient" and said that they would do nothing to reduce unemployment.
Robert Fitzgerald, president of the Australian Council of Social Service, said the budget "lands the heaviest blows on the three quarters of a million Australians who are unemployed" and that "it lacks an effective strategy to generate more jobs".
Cuts to social security, including forcing migrants to wait two years before they become eligible for benefits, cuts in rent assistance and reviews of entitlements are estimated to "save" the government $745 million over the next two years at the expense of the unemployed. Even the government predicts that unemployment will remain around 8.4% in a year's time.
Further, $1.5 billion has been cut from labour market programs over the next two years. Fitzgerald said that this, combined with the changes to CES and the "contracting out" of all case management services, makes it clear that the government "is stepping back from its responsibilities ... to some of the most vulnerable people in our community".
Raper said that about 200,000 people will be left without any labour market or employment assistance of any sort. "Jocelyn Newman, the minister responsible, described Working Nation [training schemes for the long-term unemployed] as a 'cruel hoax'. But the real cruel hoax is her suggestion that cutting labour market programs will get people into real jobs."
Raper said that only about $70 million will be returned through the new apprenticeship scheme, and about a third of the cut will go to social security "because unemployment will rise".
In a bid to find savings, the government is determined to penalise those who cannot find work. According to Raper, the tougher activity tests will force the unemployed to look endlessly for jobs that do not exist. From January 1, the government will increase the penalty time from two to six weeks for the first breach and 13 weeks for the second. "The idea is to breach more people and make savings out of that rather than providing services for people."
The definition of what constitutes a breach of the work test will also become broader, including failure to attend or withdrawal from labour market programs and non-disclosure of employment.
Qualifying for the dole has also become much harder. Apart from the two-year wait for migrants, the government is now forcing people to run down their savings before they become eligible. According to Newman, this introduces "fairness" into the system. Raper replies that this is nonsensical, especially given the government's rhetoric about wanting to encourage people to save.
A liquid assets test already applied. Previously if a family had more than $10,000 in the bank or a single person more than $5000, they had to wait four weeks before becoming eligible.
Now, the government has halved the liquid assets threshold and has determined that the number of weeks people will be forced to wait will depend on dividing their savings over the threshold by $1000. For example, a family with $15,000 in savings — $10,000 over the limit — would have to wait 10 weeks before qualifying for the dole. "If your roof leaks or if you were saving money for a deposit on a house, the government has stepped in and said 'no way'", Raper said.
Those with a redundancy pay-out will be forced to live off it for 14 weeks before qualifying. And those who move into areas with "lower employment prospects", such as rural or outlying areas, may now be forced to wait up to 26 weeks.
Dole diaries and a dob-in-a-dole-bludger telephone service for employers who want to complain about the attitude of job seekers will also be introduced.
All these measures are designed to target those who the government says are ripping off the system. Yet, by its own admission, the government is calculating on savings of only$7 million in the first year and $18 million in the second from its "anti-fraud" measures.
Raper said that the biggest savings — $56 million in the second year, $148 in the third and $161 in the fourth — will come from changing the definition of debt. "Money which the department overpaid to people, which hitherto would have been called an overpayment, will now be called a debt which the department can recover even years down the track."
The cut to rental assistance, which Raper says has been dubbed "an anti-gay measure", is also a backdoor method of cutting unemployment benefits. Singles sharing houses, no matter what their relationship, will now be regarded as "family" and their rental assistance will be cut by $24 a fortnight. For people living in high rental areas, especially in inner city Sydney, this will have a significant impact on budgets.
As if finding work is not hard enough, the government has made it even harder by abolishing the earnings credit scheme, which allowed people to earn up to $60 a fortnight from part-time or casual work. "People will now have to think twice about whether it's worth taking a day or two of work", Raper said. The employment entry scheme, in which people on finding work were given a little extra cash to buy the right clothes, work boots and similar items, is also being scrapped.
Adding further to the misery of some, people who move from an invalid support pension to a disability support pension will now be required to undergo a medical examination. Raper believes that the government is targeting visually impaired people with this change.