Labor's budget: Welfare to Work left largely intact

May 24, 2008

Labor's first federal budget in 13 years was well received by much of the welfare lobby, despite its shortcomings. "The Brotherhood of St Laurence welcomes the Rudd Government's first Budget because of its focus on helping disadvantaged Australians to overcome poverty and achieve their aspirations", Tony Nicholson, BSL executive director said in a media release on May 13. "Robin Hood may have just fired off his first humble arrow", said Dr John Falzon, CEO of the St Vincent de Paul Society, in his statement on the budget.

However, the response to the budget from those dependent on welfare was not universally positive. Pensioners, for instance, feel dramatically left out. "Treasurer Wayne Swan's assurance that something will be done about pensions sometime in the future shows he has no idea what pensioners are dealing with right now", said Combined Pensioners and Superannuants Association (CPSA) policy coordinator Paul Versteege in a statement on May 23. "600,000 single age pensioners and 700,000 disability support pensioners are increasingly failing to cope with rampant inflation."

'Interim allowance'

The CPSA is calling for "an interim allowance to be paid to people who are just on the pension to increase their income from $273 per week [for singles], to $350\", Versteege told Green Left Weekly. This would be achieved by "a quarterly income allowance of $780 to get them up there". He also criticised the government for failing to means-test the seniors bonus, meaning that in excess of $1 billion is spent on those who do not need the extra money, while pensioners' incomes remain below the poverty line.

Labor's big reform for those living on welfare was its decision to wind back the breaching provision whereby those on welfare who failed three times to meet any particular obligation (such as attending an interview) would have their payments stopped for eight weeks. Labor's new policy is "no show, no pay", whereby welfare recipients who fail to jump through the required hoops have their payment docked daily until they comply.

Many of the more draconian aspects of the Welfare to Work policy, introduced by the Howard government on July 1, 2006, will continue to exist, however. In particular, new applicants for the Disability Support Pension will have to prove that they are unable to work at least 15 hour a week (as opposed to 30 hours a week for existing recipients as at July 1, 2005), or be placed on Newstart allowance and be subjected to work/activity tests. Existing disability support pensioners as at July 1, 2005, are exempt from the Welfare to Work provisions, although Labor's pre-election policy committed them to extending the "reform" to all.

Single parents, when the youngest child turns six, will also continue to be displaced to the lower Newstart payment and forced to look for 15 hours work or 15 hours of training each week. Failure to comply with this requirement every week (including school holidays) leaves single parents liable to having their payment revoked.

Research commissioned by the NSW Premier's Council for Women and published in a report called Welfare to Work: A challenge to family values shows the considerable difficulties that single mothers have had coping with the new requirements — citing a lack of jobs that allow them to both drop off and pick up children from school, increased stress and a lack of training opportunities.

Single mothers told the researchers that Welfare to Work "simply adds pressure to an already pressured life trying to bring up my three kids on my own with no support or family nearby". One woman said that she had been pushed toward cleaning work by a job agency, even though she was a qualified accountant.

Meeting study commitments was also problematic for many single mothers. "Many TAFE short courses are less than 15 hours a week, making it difficult for participants to comply with the Welfare to Work minimum of 15 hours of study", the researchers reported.

Child care

Accessing child care was reported as being a real barrier to taking part-time work. "Many women find that what is available is inadequate, expensive, variable in quality and difficult to access. Due to the high cost of before and after school care, and transport costs, many women feel they receive very little increased income despite taking up paid employment", the report emphasised.

The many requirements of the Welfare to Work program inevitably increased the considerable stress already felt by single mothers, the report found. "Women report an increase in stress levels because they are so busy and this is having negative effects on family relationships", the report stated. "There is no consideration of the impacts on already stressed/disadvantaged family life of the added stress of having to do more than one casual job to meet Centrelink requirements."

The Rudd/Swan budget does increase funding to vocational training by $1.9 billion over the next three to five years, which may make more practical work experience available to those impacted by Welfare to Work. However, the Rudd government's acceptance of the basic premise of the system — that single parents and disabled pensioners must undertake work or study activity for 15 hours a week — means that the stress on this very vulnerable part of the community will only continue.

You need Green Left, and we need you!

Green Left is funded by contributions from readers and supporters. Help us reach our funding target.

Make a One-off Donation or choose from one of our Monthly Donation options.

Become a supporter to get the digital edition for $5 per month or the print edition for $10 per month. One-time payment options are available.

You can also call 1800 634 206 to make a donation or to become a supporter. Thank you.