Two months before the Howard government's draconian Welfare to Work package went to federal parliament, Labor's spokesperson for employment and workplace participation Penny Wong argued that the proposals were "the most extreme attack on the social security system in history".
In a speech to the Australian Council of Social Service (ACOSS) Advocacy Day on September 15, 2005, she said: "This package has nothing to do with moving people from welfare to work and everything to do with extreme cuts to the household budgets of Australian families who can least afford it."
The package was passed on December 6, 2005, and came into effect on July 1, 2006. Under this new regime applicants for the Disability Support Pension (DSP), who are assessed as being able to work for a minimum of 15 hours per week, are dumped on Newstart Allowance with a lower benefit and subject to requirements to undertake part-time work or work for the dole. Similarly, single parents must now seek work when their youngest child turns six, and are transferred from the pension to Newstart when the child turns eight.
Benefit recipients who are deemed to have broken Centrelink's rules are now liable to heavier penalties under Welfare to Work. Those deemed to have refused a "reasonable" job offer, who were sacked for misconduct, or who have committed three smaller offences, may have their benefit cut completely for eight weeks.
During the parliamentary debate Wong described the legislation as "deeply flawed", and Labor voted against it. It passed however as the government controls both houses.
By the latter part of 2006, Labor's opposition to Welfare to Work became more qualified. On September 8, in a speech to the national conference of the Association of Competitive Employment, Wong restricted her criticisms of the new law to its inadequate training options. She then talked up Labor's plan, saying: "Labor has called on the Howard government to offer a training bonus as a practical solution to move people from welfare into work, instead of just dumping single parents and people with a disability onto the dole."
But is the "dumping" of pensioners onto the dole okay as long as these newly unemployed people are able to learn new skills? Labor supports the idea of "mutual obligation" for receiving a benefit. And to make this easier, Labor would consider extending the Pensioner Education Supplement — a payment of up to $61 per fortnight to pensioners undertaking some study — to disabled people and single parents forced onto the Newstart benefit. It would also encourage unemployed people to take on more training, by extending the scope of "mutual obligation" to part-time study.
Labor is also considering extending rent assistance to those receiving Austudy for full-time study. It would also look at ameliorating the huge disincentive for beneficiaries moving into part-time work by restructuring tax rebates and decreasing the rate at which benefits are lost for each extra dollar earned.
In one significant area however, Labor promises to take welfare "reform" even further than Howard. In a discussion paper released in November 2006, Reward for Effort: Meeting the Participation Challenge, Wong argued for an extension of "mutual obligation" requirements to all beneficiaries of working age, including the 600,000 existing disability pensioners whose benefits were quarantined under the Welfare to Work legislation.
"In terms of people currently on the Disability Support Pension, we've said we will offer them incentives and encouragement through additional places [in job network programs] to move from welfare to work", Wong said on December 27.
As for those who choose not to take up the new "incentives", Wong made Labor's position plain. "We've made it clear that obligation needs to be matched with opportunity … it's in this county's interest to ensure those people who can work, do work, and that's what we're focused on."
Labor's welfare proposals are a step back from Howard's destructive breaching policy in which beneficiaries are expected to survive without income for eight weeks at a time.
Under pressure from welfare bodies, Labor will revert to the previous system of less serious penalties for infringements, only moving to complete loss of income after sustained breaches. Income would be restored when the beneficiary "corrected" their behaviour.