Young people pushed onto income management

July 4, 2014
In Febraury, there were 425,617 Newstart and Youth Allowance recipients looking for work, but only 140,800 vacancies.

Prime Minister Tony Abbott said in a recent address to the Committee for Economic Development of Australia, “all fit young people should be ... expected to persevere for six months to find a job or to choose a further training programme before accessing welfare payments”.

The government’s stubbornness in persisting with the changes to Newstart Allowance for job-seekers under 30 ignores the advice from welfare agencies and other parties that it will lead to poverty or crime, not increased employment.

After all, Newstart is already so low that it is a barrier to finding work, as even the Business Council of Australia recognises. How are people supposed to find employment if they cannot afford rent, let alone food, or suitable clothes and transport to interviews?

In the same speech, Abbott spoke about the need to raise the employment participation rate. However, this budget contains few, if any measures that will create new jobs; instead, it will cut 16,500 public service jobs. Forcing young people to live on nothing will not create jobs and ignores the fact that most unemployed people want to work.

Despite social services minister Kevin Andrews’ May 10 speech complaining that “young people can just sit on the couch at home and pick up a welfare cheque”, the problem is a lack of jobs, not a lack of will to work.

In February, there were 425,617 Newstart and Youth Allowance recipients looking for work, but only 140,800 vacancies. This means there are at least three applicants for each vacancy. This is without even considering factors such as whether these jobs are even accessible to welfare recipients, and the number of people looking for work who are not receiving a payment.

Spokesperson from the Anti-Poverty Network South Australia Pas Forgione said: “[This] brutal policy is founded on the mean-spirited myth that unemployed people are 'leaners' who refuse to search for work, or 'job snobs' who are too fussy about what work they are willing to do. With Newstart $182 a week below the poverty-line, it is ridiculous to suggest that job-seekers would choose to remain on Centrelink if appropriate jobs were available.”

During the six-month waiting period, young people will have to apply for 40 jobs a month, twice the usual amount, and meet regularly with an employment services provider, a June 12 Sydney Morning Herald article said. If these requirements are not met, job seekers will have to wait an extra month before being able to receive payments.

Recognising the problems withholding income support is likely to cause, the government has put aside $230 million for emergency relief payments — a “safety net”, according to Treasurer Joe Hockey. However, this safety net will be managed by non-government organisations, outsourcing the government’s responsibility to private organisations that may lack accountability and use religious grounds to discriminate against people in need — for example, young queer people.

Young people who study full-time at school, TAFE or university will not be subject to the six month waiting period. The “earn or learn” ethos is likely to see more young people studying so they can receive enough welfare to survive, and thus accruing more debt, while still struggling to find work after graduation. It may also impact negatively upon education providers, who may not be equipped to deal with an influx of students enrolling purely out of financial necessity.

Long-term unemployed people under 30 will also have to do Work for the Dole. This will start on July 1 in selected areas of particularly high youth unemployment; some of these areas, including northern Adelaide and Geelong, are already affected by mass redundancies. Participants starting this year will have to do 15 hours a week; this will rise to 25 hours a week when it is rolled out for all young job seekers next year.

Worryingly, a July 1 Sydney Morning Herald article reported: “The[recently released] McClure welfare review discussion paper ... suggests the government is considering expanding income management for people on welfare, specifically targeting job seekers and disadvantaged young people”.

As the article and welfare advocates point out, income management is a costly policy that further stigmatises welfare recipients and has no widespread benefit.

These changes will have flow-on effects for all workers. Particularly, it will make young workers more likely to accept unfair working conditions for fear of becoming or staying unemployed with no income support.

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