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May 15, 2013

Welfare and families: has Labor screwed over the poor?

The baby bonus is gone and the record of this Labor government robbing from the poor is a profoundly disappointing one. There wasn't much for those struggling in the federal budget.

Imagine the scene in the dwelling of family Ripoff last night, as they deliberately discard their condoms and have enthusiastic s-x to try and make a baby by late February next year, just before the baby bonus disappears in March.

The pleasures of s-x may be then produce $4000 cash for their second child. And further changes to look forward to, as March is also the month he may get the extra $9.50 a week from his part-time job! This vision appears to represent the distrustful view that Labor has of the poor, as they both fail to raise Newstart payments and decided to dribble the cut baby bonus payment so they can’t be “wasted”. The cut baby bonus will still come in instalments, with only $500 as a initial lump sum, but I gather an attached document showed that thrifty  parents will need $1000 for all essentials.

Add to this the failure of the government to raise the base income of the 800,000 recipients of allowances, most on Newstart. Even the 60,000-plus sole parents, who dramatically lost $100 plus per fortnight in January, have no immediate relief. The reasons given were that they might be discouraged from looking for work, but most of the sole parents were already employed. It ignores the  400,000-plus recipients of allowances who are exempted from looking for work. The failure to raise the base payment means dismal poverty for the long-term sick, those in training, those with family crises, those doing approved volunteering  and others with legitimate reasons for not looking for work . This is not cruel to be kind, just cruel.

As already mentioned above, some minor changes announced the day before the budget that apparently fixed some of the problems of sole parents, e.g. the extra 10.50 per week for those in jobs,  will not cut in till next March. Similarly the extra study money and the 12-week extension of the concession card will not be available till next year. All those sole parents whose children turn eight over the next months will suffer the same reduced incomes that the 67,000-plus suffered on January one, including discontinuing some studies.

I spoofed the issue of the baby bonus above but there are serious inequities in it being cut. Those parents and potential parents who are on the so inadequate payments will be lose out because they don’t have job, including nearly all those on Newstart, as well as others on the Disability Support Pensions and carer payment.  How does that fit with the NDIS?

“Are child payments middle-class welfare or a public contribution to the costs of children reducing disposable income?”

However, what is not acknowledged is that some employed mothers will  lose out because they don’t qualify for the current paid parental scheme. This showed up in a recent evaluation of the government’s scheme that points out that take-up was not good among lower-income families and sole parents. Many of these still chose to claim the baby bonus, despite it offering less in toto than the parental leave payments. While some of this “choice” may be mistaken, and the budget assumes an extra 20,000 applicants for paid parental leave, others may find that their patterns of casual, intermittent employment does not qualify them for the payment. They may also have employers who refuse to give them actual time off, as they do not have the 12 months’ service that entitles them to the unpaid leave they need to claim the paid parental leave payment.  These often low-income families will now be eligible for much less money.

How can these changes be seen as fair? I just heard the PM with her mantra about the need of children to have a working parent as justification for putting jobs first and justifying using the money for disability support and education. However, penalising carers of disabled children and others by reducing their baby bonus is not fair. Many marriages breakdown because of the stresses of children with disabilities, so these sole parents miss out again. And better education won’t work if the students are hungry or homeless children of poor parents. Therefore cuts and failures to raise low family income are counterproductive and  undermine  the school performances of the most needy children  and increase inequality.

Are child payments middle-class welfare or a public contribution to the costs of children reducing disposable income? Whether or not there should be family payments for families who are not poor and disadvantaged becomes a constant argument about middle-class welfare. The original child endowment was not a welfare payment but a wartime compensation for no rise in the basic wage. Mothers had a small payment that recognised the costs of children. It wasn’t income tested till the 1980s, when the horizontal equity argument disappeared.

Now, our absurdly low tax take is exacerbated by the constant electoral cycle tax cuts as parties try to buy votes. The Treasurer has just boasted  on radio that his past tax cuts are being paid for by making family payment “savings” instead. This is not fair, as most of the benefits of the tax cuts went to higher-income earners. If savings mean cuts to middle-class welfare, why are there few cuts to rich people’s welfare, e.g. areas such as super tax concessions? These have had feather flick on the rich, whose super funds earn more than $100,000 a year.

Is that fair?

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6 thoughts on “Welfare and families: has Labor screwed over the poor?

  1. Interrobanging On

    Weird. Eva Cox is campaigning hard for a Tony Abbott that took $1 billion out of public health at a time of surplus, say, on the issue of equity for poor people.

    Or wants to remove the superannuation tax offset that is targeted at low to lower income earners – 3.6 million of them, including plenty of working poor, no doubt – to avoid taking anything from those with millions in super.

    Campaigning for a party that is now dominated by a inherently callous hard right and constantly prodded by the likes of the IPA, Rinehart, Murdoch etc and willing responding to them.

    As I said: weird. Be careful what you wish for, Eva, because you might get it. Blind spite at the ALP might taste bitter after September when the attacks begin.

  2. Eva Cox

    I am sure that the Coalition will be as bad, if not worse, but this doesn’t excuse the ALP for being so focused on the workers that non workers get shit. Blind loyalty to the ALP is a failure to be loyal to the principles it used to stand for. Maybe that is the reason for their losing voter commitment and people being confused by the similarities to the Opposition on welfare, indigenous stuff, boat people etc.

  3. shepherdmarilyn

    The baby bonus was a big fat rort and so is the subsidised child care for years afterwards.

    Pregnancy is not a sudden condition and most families I know buy things during the 7 months before the birth so why do they need a massive whack of money after the birth.

    If this nation was not so racist and deranged with lies and paranoia over those asylum seekers who arrive by sea they would advocate the end of imprisonment for them and save $3 billion which would then increase payments for those on benefits.

    But with two blatantly racist leaders fuelling hate for refugees there is little hope of sanity anytime soon.

    I note Gillard is moved to tears over the disabled yet she is jailing thousands of innocent kids who have been brought here to save their lives.

  4. Gwen Cole

    Happy to see the end of the baby bonus, it sent the wrong message. People were feeling a glow of entitlement about breeding that wasn’t there before, not good in a country with as many problems with overpopulation as Australia.

    If we can’t control our own breeding and continue to crowd out other species and destroy the environment we won’t have much of a world left for children to grow up in, and I really start to worry when I think about our children’s children. Dying oceans, increasing desertification, rising temperatures and extreme weather events, resource scarcity, more pollution and one day civil unrest.

    Remember Australia it is predicted will not be the lucky country when Climate Change really starts to bite.

  5. Tim Vicenete

    Labor believe the poor will always vote for them anyway. The Liberals are trying to appeal to the poor by going after boat people. Good luck with that.