All doled up, nowhere to go: when the cost of living really bites
Joe Hockey's recent speeches calling for a reduction in future expenditure on welfare was targeted at "expectations" of welfare recipients -- their welfare payments, writes Lionel Elmore.
There was plenty of talk in Crikey yesterday about the cost of living and whether us whingeing Australians need to realign our expectations. All heavily qualified with a nod to those in “the bottom quintile of incomes,” as Bernard Keane put it, “who spend a much bigger proportion of their income on necessities than the rest of us. But even they have enjoyed nearly 20% growth in real income over the last 30 years.” But what about the people with no prospect of a regular income?
Eva Cox acknowledged the bracket of people who really are #doingittough (yes a hash tag on Twitter started trending) — people beyond the bottom quintile of incomes who are attempting to live off Newstart — when she wrote, “it is obvious that those dependent on dole payments are grossly underpaid.”
A single person on welfare benefits must live on less than $17 per day — the lowest rate in the OECD. Do your own budget for that amount and see how you could live and pay for rent, food, gas, electricity, clothing and food, let alone for a vehicle, a phone and internet connection. On Newstart, a traffic fine or even registration for a vehicle can mean disaster. Income management of this low amount simply makes life almost impossible. It just does not add up, as Greens Senator Rachel Siewert has discovered.
Joe Hockey’s recent speeches calling for a reduction in future expenditure on welfare was targeted at “expectations” of welfare recipients — their welfare payments. The administration of all forms of welfare has grown like a bureaucratic triffid, feeding public angst about dole bludgers and political opportunism as successive federal governments make it “harder” to get welfare — and more costly to the taxpayer.
From “workplace providers” to private security firms and legal costs in taking welfare recipients to court — even their imprisonment — this has become a barely accountable taxpayer-funded “industry” that generates wealth from welfare but not for its recipients.
Recently The Australia Institute released the results of a survey on community attitudes towards welfare payments, which showed that Australians support an $84 increase to the Newstart allowance.
When asked how much money a single adult needs to meet the cost of living, respondents indicated that on average $454 is required — almost twice the amount received by Newstart recipients.
When asked how much a single unemployed adult should receive per week from Centrelink, respondents indicated that on average $329 would be desirable.
Respondents were also asked how their spending patterns would likely change if they were required to live on the Newstart allowance. The vast majority said that they would drive their car less (83%), use less energy (77%) and buy less fresh food (63%). Welcome to the slice of population that can at least afford to whinge about how much the cost of living bites.
Recently retrenched Toyota workers seeking unemployment benefits face a daunting maze (Ford is also facing layoffs). The company they worked for was far more generously subsidised by taxpayers than they will be as just members of the unemployed.
First, they’ll have to make a phone call, which can often take between 45 minutes and two hours to be answered. Then to qualify (with payouts) they will find that they have to erode a considerable amount of their savings before they are eligible — reducing them to $3000 if they are single and $6000 if they are married.
It gets complex rapidly with varying “preclusion” periods listed in the “Retrenched or leaving your job“. If their spouse is working, they will not be eligible — the spouse income effectively subsidising the retrenchment.
If they do qualify, they will have to provide all the required documentation and identification — bank account details, loan obligations, value of all their possessions, etc. On Newstart there is also a bewildering array of obligations: from attending meetings with workplace providers, to the requirement to provide lists of jobs applied for in an unemployment diary, to personally handing in forms once a fortnight. Breech any of these conditions and a significant portion or all of your income can be suspended — forcing people into poverty and instantly making dependent children and others vulnerable.
The Australian Bureau of Statistics through interviewing a few thousand people “randomly”, neatly avoiding unemployment “hotspots”, includes those who work as little as an hour per week as employed. There is no relationship between the unemployment statistics and reality. Nobody can live on one hour’s worth of work per week. Many people on welfare legally work one to a few hours per week in a desperate attempt to top up their income — single mums with kids over a certain age are being forced to as condition of receiving benefits.
These people are not employed. Neither Centrelink nor the numerous private contracting agencies, from workplace providers to private investigators, have incentive to do other than increase the pressure on welfare recipients, enlarge the bureaucracy and the costs to the taxpayer.
Perhaps Hockey could achieve massive savings on welfare by the abolition of Centrelink and the workplace provider industry and treating with respect people who receive benefits as they do companies that pay tax and get subsidies. A standardised rate for all benefits with no means tests for pensioners would be possible with the realisation that although pensioners are not “working” as such, they employ many hundreds of thousands of others to do the things they used to do when they were able — especially when they get a decent pension.
It could also recognise the vast amount of unpaid work that pensioners, unemployed and other people on welfare do when they are not forced to fill out pointless paperwork, sit on phones for hours, attend meetings or the modern equivalent of paint rocks white in work-for-the-dole schemes.