More backward steps on the unemployed

Issue 

By Sean Healy

The federal Labor "opposition" has begun internal policy discussions on solutions to unemployment. It plans to release "Workforce 2010", a report on the labour market by economists, and a discussion paper in early September.

Labor is desperate to draw a line in the sand between itself and the federal Coalition government on unemployment. However, early indications suggest that Labor's "solutions" will not only not be new but will be little different from the government's.

Most of a July 23-24 meeting of Labor MPs and staff on unemployment was closed to the public, but the media were allowed to attend ALP leader Kim Beazley's keynote address. This speech showed well enough the direction Labor is heading in.

Beazley decried the Coalition's policies of increasing "labour market flexibility", which include a general lowering of wages, more restrictions on trade union operations, more policing of the unemployed, dismantling awards and improving the position of the employers, as the "low road" and the "painful path". The government claims these policies are the cause of a slow fall in unemployment, from 8.1% in June 1998 to 7.3% last June, according to official figures.

Beazley proposed a 5% unemployment target (which would still leave 500,000 people jobless), argued for a system of tax cuts rather than pay rises for the lowest paid and placed a greater rhetorical emphasis on Australia's need to "become a knowledge nation". He also proposed the reintroduction of government wage subsidies to bosses who hire the long-term unemployed. Under this scheme, unemployed people would be able to trade in up to the full value of their benefits as a direct subsidy to whoever employs them.

Beazley's recipe — "an innovative mix of strong growth, reductions in labour costs, and investments in education and training" and "labour market reform" — is little different to the Coalition's. On the last issue, especially, the lack of difference has become obvious.

Beazley criticised comments by federal employment minister Tony Abbott that unemployment is as much a product of the jobless becoming "habituated to a life on welfare" as it is of insufficient economic growth. Yet he then embraced the very principles which underlie Abbott's view: "Labour market assistance must be based on the principle of reciprocal obligation. Labor accepts that the unemployed have an obligation to participate in community employment schemes such as work for the dole."

Beazley was even keen to concede that "reciprocal obligation requires carrots and sticks to work". "Sticks" would include the unemployed suffering cuts to their poverty-level payments, or even being denied benefits altogether.

Labor's concessions to the Coalition's let's-get-rid-of-welfare crusade are coming thick and fast. In May, Labor's family and community services spokesperson, Wayne Swan, argued that past policies caused welfare dependency. He described Labor's previous policy as "no questions asked, no care given" and as "yesterday's approach to yesterday's circumstances".

Prominent Labor backbencher Mark Latham went further on July 26, describing welfare as "too much like charity" and a "sacred cow full of warm rhetoric". Instead, he argued, Australia should implement such US programs as a "mutual responsibility" plan for teenage mothers, which makes welfare conditional on accepting government directions.

ALP employment spokesperson Martin Ferguson even went so far as to take credit for the Coalition's work for the dole program on Channel 10's Meet the Press on July 26. "The concept of work for the dole, the responsibility of the unemployed, is an accepted Labor way. We brought it in", he said.

It is no wonder, then, that Labor is having trouble selling its "vision" for lowered unemployment. The only thing on display so far is a watered down version of the Coalition's program.