Life on the dole is about to get harder

May 8, 1991

By Peter Chiltern

About $3 million has been allocated to improve security arrangements for Commonwealth Employment Service (CES) staff in preparation for increased harassment of unemployed people when the government's Active Employment Strategy (AES), now renamed Newstart, begins on July 1. The allocation was made in the 1990-91 federal budget, following the Hawke government's announcement of proposed "labour market reforms" in February 1990.

The AES is to replace the present system of unemployment benefits, which has existed roughly in its present form since it was introduced by the Chifley Labor government in 1947. Under the new scheme, for the first time this century unemployed people will not automatically be entitled to some form of unemployment relief payment, but will be required to pass tests and sign contracts in return for payments.

The payments will take the form of "allowances" under two programs, Jobstart for those unemployed less than 12 months and Newstart for those unemployed more than 12 months.

Even before the scheme starts, public servants are pointing out that training courses for the unemployed are already overcrowded. At present, there are about 180,000 long-term unemployed and numbers are expected to increase over the next year.

To sell AES, the government has enlisted Melbourne advertising agency Clemenger as well as employment and education services minister Peter Baldwin of the ALP left. Baldwin says AES is designed to provide extra help to the unemployed. However, public servants administering it clearly expect the reality to be rather less pleasant.

To prepare staff for the changes, the CES began issuing a monthly bulletin last August. According to this, the Department of Employment, Education and Training (DEET) is developing an "enhanced" security policy, and a "joint Central Office/State Office group has been established to adapt the Department of Social Security crisis plan to CES Network requirements".

The Clemenger campaign is due to begin in June, kicking off with three weeks on television, followed by two weeks in the newspapers in early July. A second phase of the campaign will involve placing advertorials with the message that Newstart is working. This will start around October. Phase three will come around June 1992 with newspaper ads restating the Newstart "philosophy" and highlighting success stories.

Whatever the ads might say, the fact is that from July 1 the CES will be responsible along with the Department of Social Security (DSS) for more systematic harassment of the unemployed, particularly the long-term unemployed, by the application of more frequent and rigorous "activity tests", which will replace the existing DSS work test. Those failing such tests will be deprived of unemployment payments.

Those unemployed longer than 12 months and wishing to receive unemployment benefits will be required to sign contracts. According to the CES staff bulletin, "the contract will be agreed by both parties, but there will be an element of compulsion under the activity test".

The new system provides for fines of $1000 or six months' imprisonment, or both, for allowance recipients refusing to provide information demanded by DSS or CES. According to the CES staff bulletin, the contracts could also lay public servants open to lawsuits by unemployed people whose payments may have been wrongfully terminated, though the department adds that it would stand behind its employees in court.

The Public Sector Union and the ACTU have both expressed concern that the introduction of AES in a recession will cause extra hardship to unemployed people. The PSU has also opposed the projected involvement of CES staff in DSS mobile review teams whose purpose is to visit unemployed people at their homes.

The AES projects a big increase in the number of these teams, together with the involvement of CES staff. The PSU says DEET involvement should be limited to providing labour market information, and allocation of staff to the teams is not necessary for that.

All this is taking place at a time when the government is cutting CES staff due to a decline in the number of job vacancies, though the number of people seeking work through the service is probably at record levels.

Under the new scheme, DSS will select about 40,000 long-term unemployed people annually for "intensive interview", and about 20,000 of these will be passed onto CES for further intensive treatment.

Addressing a three-day conference of senior management and staff involved in AES late last year, Peter Baldwin admitted there would be some tightening up on the unemployed, but added it would be unfortunate if the AES was seen merely as a scheme to get unemployment figures down. During the 1990 federal elections, he added, "there was a notion that AES was only about chopping people off the dole and so forth and in a sense it was portrayed in a purely punitive way. It is not how I perceive it and it is not how the government perceives it."

Baldwin is correct on one point: while the unemployed are to get tougher treatment under the scheme, there is another side to it. Business appears set to do rather well out of it.

Under the Jobstart project, the government will increase existing subsidies to companies taking on long-term unemployed people. Companies will get $200 weekly for three months if they hire someone unemployed for 12-24 months, and $230 for someone unemployed more than two years.

In fact, many features of AES appear designed to provide one or another form of subsidy to business. The main selling point of of a wide range of training for unemployed people. This links in neatly with a drive by the government in recent years to relieve business of much of the cost of training the workforce.

Secondly, the drive to force people off the dole ties in with a campaign by the most politically conscious business sectors to take advantage of the end of Australia's long postwar labour shortage by systematically attacking wages and working conditions. Since the present long-term economic decline began in the mid-'70s, unemployment has rarely if ever fallen below 6%, though companies have periodically complained about shortages of some types of skilled labour.

The employers and their supporters in the Hawke government can confidently expect that the push to reduce wages and overturn existing conditions will be assisted by increasing desperation among a growing pool of unemployed people.

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.