Labor’s welfare rise a ‘parachute with holes’

August 9, 2023
Anglicare Australia said the rise to welfare payments are too small to be meaningful. Graphic: Green Left

While Labor claims its amendments to strengthen the welfare safety net, which passed on August 2, are “structural” and “calibrated”, the Australian Greens described them as more like a “parachute with holes”.

The Social Services and Other Legislation Amendment (Strengthening the Safety Net) Bill 2023 amends three acts: the Social Security Act 1991 (related to welfare changes), A New Tax System (Family Assistance) Act 1999 and the Veterans’ Entitlement Act 1986.

The changes raise JobSeeker payments by $56 a fortnight from September 20 — a combination of the May budget $40 rise and a 2.2% cost-of-living indexation.

The amendments also expand eligibility for Parenting Payment (Single) (PPS), from a child under 8 years old to a child under 14, and shift 57,000 eligible single parent carers to the higher PPS rate (from $745.20 to $922.10).

While this is a step in the right direction, the age change is still lower than the pre-2006 cut off of 16 years, laying bare the neoliberal policies of the past two decades.

The Australian Council of Social Services said the new rate of JobSeeker is still inadequate: it rises from $50 to $54 a day and remains “a poverty payment”. ACOSS wants the daily rate lifted to $76.

The Anti-Poverty Network SA said the raise to JobSeeker and Youth Allowance is not enough to lift people out of poverty and that the continuing low rate of JobSeeker is an “emergency”.

Anglicare Australia said “the proposed increase … is so meagre as to be almost meaningless”.

The Antipoverty Centre put it more bluntly: “There are 2 million working-age people on payments below the poverty line now and there will be 2 million people on payments below the poverty line when this bill passes.”

The holes remain wide for asylum seekers and refugees, who are systematically excluded from the so-called safety net. Noting this, the Asylum Seeker Resource Centre recommended that asylum seekers be given access to mainstream social support.

The inadequacy of the changes appears starker in the context of the federal Treasurer’s recently announced $20 billion plus budget surplus last financial year.

Poverty is a political choice.

As Greens Senator Janet Rice put it: “Labor has chosen to spend $300 billion on Stage 3 tax cuts and $368 billion on nuclear submarines … We can afford to increase the rate of income support to above the poverty line.”

For all its crocodile tears about Robodebt, Labor has decided against implementing a key Robodebt royal commission recommendation to reinstate a six-year limit on debt recovery for social security debt. It noted that amendments to the act under the Coalition (in 2016 and 2017) removed the 6 year limitation and allowed interest to be charged on the debt.

The commission report said: “There is no obvious reason that social security recipients with debts to the Commonwealth should be on any different footing from other debtors. To the contrary, as a cohort more likely to be in financial difficulty, there is every reason not to pursue ancient debts against them.”

Labor is happy to point-score against the failed Robodebt scheme but is not prepared to undo punitive changes attacking the most vulnerable.

Reversing the Coalition’s change would show that Labor’s approach to those needing welfare is different to its predecessor.

The 900-page Royal Commission into the Robodebt Scheme  report, released on July 7, includes 57 recommendations. It is still unclear how many of these Labor plan to adopt.

Antipoverty Centre spokesperson Kristin O’Connell said Labor “should be adopting every proposal that would help ensure welfare recipients and low income workers are not living in poverty”.

She wants Minister for Families and Social Services Amanda Rishworth and Minister for Government Services Bill Shorten to “urgently suspend Centrelink debt raising and collection activity”. She said “the culture and processes must be transformed to ensure overpayments AND underpayments are handled fairly and safely”.

Labor should implement all 57 recommendations and raise welfare payments above the poverty line. It has an opportunity to transform a hole-ridden parachute into a genuine welfare system and could easily do this by scrapping the Stage 3 tax cuts for the rich and redirect $313 billion over 10 years to those doing it tough.

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