This is not a Labor government budget in any serious sense. It does not take from the rich, except in very minor ways, and its redistributive tendencies are almost reversed. By talking interminably about jobs and the unemployed, the prime minister and treasurer disguise the fact that the budget is all about the mining boom.
The almost war-time emphasis of “the country needs you all”, falls fairly flat when it becomes clear that jobs rhetoric is really targeted at those on some government payments, who are not really what the miners want. However, they fill the role of usual suspects when the government wants to look tough.
The entrails of the predictive chook I used to assess the early signs were somewhat diseased and putrid. The rot of too much economic medicine combined with harsh purgatives for the supposedly idle suggested this budget was going to be bad for those the government defined as non-performers. And it is.
First targets were the teenage single mothers, or we are expected to assume they are single. They must be coercively educated and then sent to paid jobs, so there are no real mothering choices for them. Then come the long-term unemployed, who will be pushed even harder into futile work for the dole and lots of applications for jobs for which they will not even get interviews. Then come those who have presumed, faked or maybe exaggerated disabilities, who are going to be re-assessed and reviewed with great vigour at considerable costs.
The whole theatrical presentation assumes that saving them from the sin of idleness will mean that big savings will be made, but projections do not show this.
There are few cuts for the rich, or even middle classes. Apart from a go at the dependent spouse rebate, a sad legacy of olden times that somehow survived as an unseen tax expenditure and a snip at fringe benefit cars, there was little in the budget that reduced rich people’s welfare. There were no cuts to any of the other very expensive tax expenditures that mainly go to high-income groups, that I suggested as targets last week. Ref? The massively unfair superannuation tax concessions have been left untouched and will even increase despite costing the budget more than unemployment benefits plus disability support pensions combined.
I realise cutting these payments will not happen because it is the political and bureaucratic high flyers who decide that really benefit from them. So they and the media have persecuted the poor to find targets that can be used to build their reputation as tough guys. The idle poor are real targets of cuts to the black magic economic pudding, which is flavoured by bitter paternalistic spices.
This is classic conservative territory. From 19th century Thomas Malthus on, there has been a peculiarly British-type delight in touting the Protestant virtues of hard work and redemption for those who need the sins wiped out. So Wayne Swan is still going on and on about the country needing to use all our skills.
So there is no quibbling at money for extra skills training that won’t work and extra staffing for surveillance of the poor but there is little serous spending on assisting those, who are not on benefits, into increasing participation. There is no move to reduce the extra effective tax rate on second-income earners, as recommended by Henry, nor are there any more badly needed additional childcare services for those under two. That deficit raises questions about where the new teen mothers will find care for their one-year-old when they have to start upgrading skills, as there is only an offer of fees not places. .
This is not just smoke and mirrors but a major shift in welfare policies. The head of the Brotherhood of St Laurence is on the ABC as I write, claiming a new dawning of welfare, a new morality that ensures people are part of the mainstream. This is the also the government line and it signals a serious change in the whole way we see our responsibilities for those who do have an adequate share of the resources. There is no respect for those who miss out; no dignity for those who have little access to jobs. The official view assumes they are flawed and need to be adjusted to fit in and this is a scary new authoritarian version of the role of the state.
There are new moves to reproduce aspects of the NT intervention that failed into other areas. Income management in a lesser version is coming to five new areas Playford (SA) Shepparton (Victoria) Bankstown (NSW) Rockhampton (Queensland) Logan (Queensland). They claim in the departmental media release today that:
“Income management ensures that money is available for life essentials like food, clothing and housing, and provides a tool to stabilise people’s lives and ease immediate financial stress. Stabilising dysfunctional families is an important step to removing the barriers to participation in community and work.”
This statement ignores both the problems it also causes and the lack of evidence that it actually works.
Meanwhile, the poor will be pressured to attend more interviews. Obligations assume that the bureaucrats at Centrelink or the job service providers are always benign and will offer assistance to manage the complexities of the disadvantaged. This official view ignores the fact that any confusion or dissent may result in loss of income support. The reports we get from any research is that this is not so, and structurally it is hard to ask too often overloaded Centrelink people to be always nice and supportive.
There are also no serious funds in the budget to deal with employer discrimination and prejudice, which are serious issues for many job seekers. Many are older and may have other barriers to employment, such as disabilities and long periods out of employment. Subsidies on offer are a scant 10,000 for the long-term unemployed as against 230,000 potential recipients.
There are far more people looking for work than there are jobs for them. The Internet Vacancy Index, compiled by the Department of Employment for March 2011, shows that there were 239,633 jobs on offer nationally. There were relatively few low-skilled level jobs — most required qualifications. Only 32,347 jobs did not require applicants to have a Cert II or higher qualification. At the other end, 92,338 asked for university degrees or high diplomas so few of the officially unemployed would qualify.
A social democracy should be judged by how it deals with its most vulnerable. On that basis, this is not a good budget. It fails most tests of fairness and equity and makes those society excludes objects of scorn or at best pity. This approach should not be acceptable but much of the media seems to like it. That is very scary.