Poor are not bludgers: report

Despite what Joe Hockey says, we are all lifters and leaners at different points in our lives.

One of the most striking features of the first year of Tony Abbott’s government is the sustained attacks on Centrelink clients.

These started with the federal budget and its proposed cuts to Newstart Allowance for those aged under 30, Family Tax Benefits for sole-parent and low-income families, and restricted access to Disability Support Pension.

These were followed by employment minister Eric Abetz announcing the expansion of Work for the Dole to all jobseekers under 50.

To justify their attacks, they use the narrative of “leaners” and “lifters”. Treasurer Joe Hockey used this argument in a speech to the right-wing Sydney Institute in June. Hockey's leaners are those who survive off taxes paid by lifters, and the lifters are the ones who work, support themselves, pay taxes, and make contributions to society.

His provocative comments fit nicely into a long tradition of demonising those on income support. But this tradition is based on arguments that have been contradicted by research and common sense.

Policies like Work for the Dole and income management — which remain popular among politicians despite lacking evidence that they improve the finances, health, or job prospects of unemployed people — are ultimately designed to create an uncomfortable welfare system and drive people into unsuitable work.

It is often argued that reliance on Centrelink payments causes people more harm than good, stifling their initiative and responsibility.

The idea that large numbers of people would choose reliance on welfare over paid work is curious, because Centrelink payments are extremely low. The Newstart allowance paid to the unemployed has not been raised in 20 years and is the lowest in the developed world.

The argument that the comfort of being on welfare breeds dependency, making people less willing to support themselves, is one of the reasons why Labor and Coalition governments have consistently resisted calls from union, welfare and business groups to raise unemployment benefits by at least $50 a week.

This, however, fails to appreciate how much hardship income support recipients experience, and the large gap that has developed between welfare payments and the average and minimum wages.

The Australian Council of Social Service released a report into poverty on October 12. It found 61.2% of unemployed people were living below the poverty line — defined as 50% of the median income.

For a single adult, the poverty line is now $400 a week, meaning that Newstart, even with the maximum rate of Rent Assistance included, is $97 per week below the poverty line. About 40% of Newstart recipients cannot afford to pay their bills on time or visit a dentist and more than half cannot raise $2000 in the event of an emergency.

There is no statistical relationship between low payments and low unemployment rates: more welfare does not necessarily stop people from working.

Indeed, finding work is extremely difficult under circumstances where there are roughly five jobseekers for every job, a fact routinely confirmed by Australian Bureau of Statistics data, but which politicians refuse to acknowledge.

The substantial hardship experienced by income support recipients, and the undersupply of jobs, is not the only reason we should be sceptical about the leaners and lifters rhetoric.

Another problem is that when we analyse the welfare system not over a single point in time, but over the long-term, the divide between leaners and lifters crumbles.

A survey by Housing, Income, Labour and Dynamics in Australia, undertaken by the Melbourne Institute of Applied Economic and Social Research, looked at the data about who receives Centrelink payments in Australia over the long-term.

They found the proportion of working-age people receiving income support declined from 37% in 2001 to 29.5% in 2008.

Between 2001 and 2009, only 5-7% of working-age people received 90% or more of their income from government payments (excluding family payments), and 15% were in this position at some point over the period.

They also found 65% of working-age people lived in households where someone received income support at some point between 2001 and 2009, but only 1% received 90% or more of their income from welfare payments for all nine years.

There is no clear, sharp divide between the so-called leaners and lifters. In the long-run, we are all leaners as well as lifters. This is because people’s lives fluctuate and as they have children, return to study or fall ill, people move from work to welfare and back again.

Those dependent on welfare over the long run are a tiny group. For young people, the figure is even smaller: 0.3% of people aged under 30 received 90% or more of their income from government payments for every year from 2001 to 2009.

The welfare system operates as a form of insurance, protecting people when things go wrong. People who receive income support get government payments because of misfortune and because they have no choice.

That the federal government wants to compound that misfortune by limiting access to this support, restricting how people spend their payments and forcing jobseekers to do pointless “make work” at less than the legal hourly rate. This reflects a deep-seated hostility towards the unemployed — hostility that is immune to reasoned argument and evidence, and that can be overcome only through persistent organising and resistance.

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