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crikey15

May 12, 2015

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The negative income tax has the odd distinction of being a measure supported by both libertarians and the progressive left, and it’s time we took it seriously.

Closely tied to the idea of a universal income, a negative income tax is a measure by which citizens get a low but guaranteed basic income that tapers off as their income rises. Not tied to virtue or misfortune, it is given freely and with no questions asked to those between jobs, without jobs, or who contribute to society in myriad ways that do not lead to well-paying employment.

Negative income taxes have most famously been championed by Milton Friedman, but the idea of addressing poverty directly by giving people money has attracted support in all sorts of corners. Martin Luther King was another fan. Broadly speaking, libertarians tend to like negative income taxes because they’re a welfare measure that nonetheless preserves small, unobtrusive government, while progressives like that it assures the poor are given a living wage without casting judgement or causing them undue hardship to access payments.

Large sections of the population would not be materially affected by a move to negative income tax, as they earn enough through their jobs that they wouldn’t qualify. But those who currently receive a complex of Centrelink payments and benefits would be aided by a simpler, less bureaucratic form of welfare.

Aside from making life easier for those receiving government assistance, negative income taxes also help reduce welfare churn, allowing the Australian government to dramatically scale back the functions and costs of bodies like Centrelink.

Aside, perhaps, from Saudi Arabia, where all citizens receive yearly dividends from the state-owned patrol company, no country in the world has a full negative income tax regime. But the idea sticks around because it makes theoretical sense. As a way of structuring a welfare system, it’s had its advocates for decades, particularly in the 1960s and 1970s. That era also begot the introduction of four major trials in the United States, which found negative income taxes tended to reduce hours worked. But perhaps this isn’t a bad thing — many advocates of negative income taxes in recent years have cited such tax schemes as a way to deal with the mechanisation and automation of menial work. In a few years time, it’s possible we’ll have our first whole-of-country experiment to go on. In Switzerland, voters in 2016 will vote on a referendum to give everyone in the country a basic income of 2500 Swiss francs a month.

In Australia, negative income taxes have not been a major feature of recent welfare and tax reviews, which have advocated simplifying the tax and welfare system through far less radical means. But one body that has looked closely at the impact of a negative income tax in Australia is the Centre for Independent Studies, which 10 years ago released a paper by economist John Humphreys looking at a range of radical welfare and taxation measures in Australia. It suggested a negative income tax calculated by paying the recipient 30% of the difference between their income and a tax-free threshold of $30,000. Someone with no income would receive $9000 a year. Someone earning $5000 a year would then receive a negative income credit of $7500, taking their total income to $12,500, and so on. This scheme, which sets benefits very low (nearly a third lower than the maximum singles Newstart allowance), preserves a flat 30% marginal tax rate on every extra dollar earned (by withdrawing 30 cents for every $1 earned), minimising the disincentives to take on more work and avoiding poverty traps, where welfare recipients see their total income decline when they take on work and lose more in benefits than they earn.

Writing a decade ago, Humphreys expected the scheme could actually result in a budget saving of $15 billion a year — but he was assuming it would lead to higher workforce participation and thus fewer people on welfare (perhaps a fair assumption if the benefit is set so low). Major critics of negative income tax point to the cost as the major impediment — to be self-sustaining, it’s argued such a welfare system would need far higher taxes to ensure no current welfare recipients are worse off. But other, less pure versions of negative income tax schemes have been found to pose fewer threats to the bottom line.

Of course, the scheme could be tinkered with in all sorts of ways — to give those with disabilities a higher base income, or to adjust for family size — but the basic premise would remain the same. Jumping through hoops to get on Newstart is a full-time job in itself at the moment. This is a huge waste of everyone’s time and effort. A negative income tax could help fix that.

crikey15

May 7, 2015

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There is always someone claiming to speak on behalf of disenfranchised and minority groups. In SBS’ controversial new TV program, Struggle Street, which aired 8.30pm last night, that role was assumed by the somewhat condescending voice-over explaining, “That’s how some folks do it, in the Druitt.” The episode itself did not come anywhere near the much-hyped speculation of “poverty porn”. The episode afforded compassion and sympathy to the lives depicted, beyond what anyone was expecting after the critical lead-up, to the point where the pendulum has swung the other way as commentators discuss just how much humanity the show captured.

Yet, while claiming to extricate western Sydney from the stereotypes of the nightly news crime reports, these programs are still hungry to seek out the gore and package it up for middle-class Australia. This, perhaps unintentionally, maintains a power dynamic of the west as the “other” and the heavy script stood in the way of an opportunity to hear more from the real voices and their unique perspectives.

The episode afforded us a look at social inequality and some of the issues facing regions like Mount Druitt such as unemployment, substance abuse, isolation, teen pregnancy and suicide. We are introduced to Ashley, a disability pensioner who was a truck driver before head injuries have rendered him dependent on his partner-come-carer Peta. The narrator tells us “behind the banter” lie painful truths.

Ashley is the patriarch and sole provider for seven out of his 10 children, including Corey who has an ice addiction. He is asked about his biggest fear, and as the camera zooms in, he tells us with fierce love, “finding a pin in Corey’s arm”. As we watch his entrepreneurial spirit, collecting trash to sell to the scrappers, or honing his barber skills on mate “Tony the Wog”, the voice over intones it is “two steps forward, three steps back.”

There’s Bailee, 16 and was kicked out of home at 13 after a violent fight with her stepfather. Her life on the streets has devastated her, fighting sexual abuse and depression. The house she lives in is filled with excrement and trash and she is scared for her safety. Another one of the characters Erin, a single teen mum, who wants to be a youth worker, has kindly taken Bailee into her care. From here, Bailee “wants to turn her life around”.

William, an indigenous man, lives on the fringes hiding from authorities, hunting birds and stuffing them with Italian herbs, which is “better than buying a fucking chook”.  He hasn’t seen his son in years and struggles keeping up to date with Centrelink demands. Living hidden in the bush, he feels he would have been a better person before, when his people could live off the land as warriors.

The episode highlighted the real need for support structures that exists in our welfare state. It showed the importance of family and community when “the going gets tough” and gave a portrayal of warmth and hope. It’s a dizzying and confronting image for much of Australia that doesn’t identify or know about Sydney’s western suburbs. Interest in the western suburbs has been growing ever since it became a crucial contested electoral region in the 2013 election, framed as “the political heartland”. This has provided an opportunity to hear from other, marginalised perspectives.

Although we Sydneysiders pride ourselves on multiculturalism and equality, the reality is that we live in a segregated city, where those marginalised along race and class lines live in pockets, hovering on the verge of ghettos. There is growing recognition that we only engage with places like Mount Druitt — with welfare dependence, public housing and high unemployment — in abstract national debates during election time or nightly news crime reports.

But what is also emerging, as a wider trend, is an almost “fetishisation” of the western suburbs of Sydney. The west is treated almost like a war zone to fly in and out of, as reporters and politicians dive in to get their stories and leave. While the program was not nearly as detrimental as the trailer suggested, it still raised interesting ethical debates around community voices and what happens when media claims to speak on behalf of the “disenfranchised”.

It is not the first time SBS has been in the line of fire for lack of community consultation. In 2013, the series Once Upon A Time in Punchbowl had to be pulled after it was found a main character, Michael LaHoud, had exaggerated his own notoriety and was believed at face value. With an expectation of drugs, crimes and violence, the producers, at times, seemed so titillated by these stereotypes they were distracted from the business of actually gathering facts, and a chance to explore the in-between complex spaces.

Whether the episode of Struggle Street absolved our own prejudices or not, the fact remains some of the people from the community filmed were deeply upset by the portrayal of personhood and place. Jon Owen, one of the characters told The Guardian:

“This was the media group that was supposed to do it differently. This is not A Current Affair, this is not populist Murdoch media. This is supposed to be our friend, SBS, but they have betrayed us. Whose agenda does this suit? It’s not the local community’s agenda.”

The media, of course, does not owe it to any group to represent their agenda. But as media moves further into reality/documentary spaces and interest in the western suburbs, the repercussions that a “fly in fly out” mentality can have within fraught communities is an issue that requires further consideration and consultation.

*Kavita Bedford is the producer of Mapping Frictions: Stories from Bankstown, a digital storytelling site that seeks to showcase local stories.

United States

Dec 13, 2013

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It hasn’t been a great year for McDonald’s in its home market. The fast food goliath has recorded a worrying decline in its American numbers — same-store sales were down almost a full per cent in November. But there’s more angst at the world’s biggest hamburger chain.

Buffeted by trendier, more upscale competitors such as the booming Mexican food outpost Chipotle and the sandwich group Panera Bread, Maccas this year introduced a broad range of new products onto US menu boards. After customer wait times increased and dissatisfaction rose, it quietly scaled back the menu. In October, a Goldman Sachs survey ranked McDonald’s last in a list of 23 fast-food chains in terms of “food quality, healthfulness and customers’ willingness to pay more for the food than is currently charged”.

The group’s biggest misstep, though, was unwittingly becoming poster child for an ascendant movement. In an ill-advised McResource employee portal, it counselled employees to, among other things, break food into smaller pieces to eat less and “still feel full”. It also advised employees to apply for government assistance, get a second job, sing happy songs in trying times and sell unwanted possessions on eBay.

The site was seized on by the advocacy group Low Pay Is Not OK and swiftly went viral. McDonald’s was forced into an embarrassing retreat.

Similarly, Walmart, the largest private employer in the US, raised eyebrows when managers placed bins in employee-only areas last month with irony-free signs reading: “Please Donate Food Items Here, so Associates in Need Can Enjoy Thanksgiving Dinner.” Something is askew when employees at the nation’s biggest retailer cannot afford to feed themselves.

The US minimum wage sits at US$7.25 an hour. Over a 40-hour week, that is just $15,080 annually. New York fast-food workers earn an average yearly salary of $11,000. About 3.6 million people, most with children, attempt to make ends meet on this wage. Most of this vast army of workers relies on public benefits to supplement their low income. (Side note: McDonald’s CEO Don Thompson takes home about $25,000 per day.)

The US is the most fiercely capitalist country in the world. It’s a nation in which union membership sits at just 11%. Unions themselves are traditionally despised by the majority reared on the notion the movement stands for bullying and laziness in the workplace.Yet as the middle class shrinks and wages for most Americans go backwards, there is an unmistakable shift in sentiment occurring. For outsiders here, it has been remarkable to watch.

A job at McDonald’s, once the domain of high school dropouts or ambitious teenagers seeking additional pocket money, can now be a lifeline. Alarmingly, 35 is the average age of Americans earning the minimum wage.

Although the economy is no longer in recession, the benefits of economic recovery are being felt by an increasingly elite few. Some 58% of jobs created in the current recovery are low-wage roles in areas such as fast food and retail.

In response, something remarkable happened back in September on US Labor Day. In 60 cities around the country, staff at more than 1000 fast-food restaurants walked off the job. Their demand: a rise of pay to $15 an hour.

“In the past 16 years, the US federal minimum wage has risen by just $2.10 an hour. It has not moved at all in four years …”

A movement has coalesced around a large, previously voiceless group with the attention of the media and the sympathies of the majority of Americans. Activist and employee advocacy groups are mounting a highly strategic campaign to increase wages of low-paid Americans. One group credited with starting the movement is Fast Food Forward, which began its crusade last year in New York.

In the past 16 years, the US federal minimum wage has risen by just $2.10 an hour. It has not moved at all in four years, although various cities and states have acted independently to raise their population’s hourly rate. Washington state has the highest, at $9.19 per hour. It was in Washington, at Seattle airport, that the campaign scored its biggest victory so far this year, landing a $15 per hour minimum for 6500 airport staff.

Here in Miami, Walmart has been a particular target of protests. On Black Friday, various outlets described one as the largest civil disobedience rallies ever held against the retail giant in Los Angeles. In a particularly poor look, protesters dressed as Santa Claus were handcuffed and arrested. Meanwhile, thousands of fast-food workers again walked off the job around the country last week.

Although employer associations have for years claimed that a rise in minimum wage will reduce staffing levels and increase prices, that view is beginning to wear thin. Many Americans are now grappling with the concept that perhaps paying a little more for a burger and knowing the person serving it to you is being compensated fairly is a fair tariff. One economist study estimates McDonald’s would recover half the cost of a pay increase by upping the price of a Big Mac from $4 to $4.05.

Conservative pundits are even wondering if the $385 billion spent on public benefits would significantly shrink if wages rise. In Florida alone, 115,000 fast food employees rely on benefit programs to feed their families.

The Service Employees International Union is co-ordinating the strikes at outlets and says it will continue until fast-food chains come to the negotiating table.

For his part, President Barack Obama has signalled wage increases as a priority. “Trends since the 1970s have led to a dangerous and growing inequality and lack of upward mobility that has jeopardised middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead,” he said.

The President’s plan is less ambitious than the unions’: up the minimum wage to $10.10 an hour in three stages over two years. Activists say the most likely route to change is the public strong-arming of companies such as McDonald’s. One example gives the unions hope.

Back in June, The New York Times exposed several McDonald’s franchisees as paying staff not into regular bank accounts, but via so-called pre-paid cards in which banks charge employees fees to simply access their money. Employers were offered financial incentives by the banks to steer staff into the scheme. The story was picked up nationally. The next day, the franchisees announced they would end the practice.

When it comes to wages, there is growing recognition, unions say, and a similar nerve has been struck.

Asia-Pacific

Sep 24, 2013

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The face of the Australian aid program is sure to change dramatically over the coming years.

The Coalition has long been clear on its intention to reform the $5 billion international aid program, taking AusAID further down the path of operating primarily in the national interest. Days before the election the Coalition announced it would slash the aid budget by $4.5 billion dollars. On the day the new government was sworn in, it announced that AusAID would be subsumed into the Department of Foreign Affairs and Trade (DFAT) — yielding a chorus of dismay from aid agencies.

What will happen to the budget and the department?

Six hundred million dollars is set to be removed from this year’s aid budget. After that, the budget will only increase by the Consumer Price Index across the next four years of forward estimates, which means forgoing the international commitment to spend 0.7% of Gross National Income on aid. (There had previously been a bipartisan consensus on increasing the aid program to at least 0.5%; currently, aid sits at 0.37% of GNI.)

The Canadian department of aid, CIDA, recently subsumed its aid program into foreign affairs. The Abbott government appears to be following suit, as CIDA has also emphasised private sector development and economic growth, and heavily involves private enterprise in delivering aid.

Despite the sizable cut to Australia’s aid budget, greater ramifications will come from the planned amalgamation with DFAT, “to ensure the alignment of our aid, foreign policy and trade objectives,” which is set to further blur commercial and development interests. This can already be seen in programs which have clearly served Australia’s commercial and strategic interests, such as the Mining for Development Initiative, which promotes mining as a vehicle for “sustainable” development overseas. The diversion of $375 million of aid to cover the cost of funding the asylum seeker policy, as well as money to Sri Lanka and PNG to assist domestic policy objectives, show aid has always operated this way.

What will these changes mean?

There will be a marked ideological shift for the aid program. “DFAT will have a clear focus on promoting the economic interest of the Australian people and Australian businesses,” said Foreign Affairs Minister Julie Bishop. It’s a far cry from poverty eradication for the world’s poor.

AusAID’s objectives have traditionally been to further Australia’s national interest, poverty reduction and economic development. Though these have regularly been in tension, the separation between AusAID and DFAT was generally agreed as necessary for aid to maintain a degree of independence and to de-politicise aid projects.

“NGOs in Australia are set to receive a larger chunk of the pie, though … it will be a scramble for NGOs to quickly fit their programs into new frameworks.”

Critics of the merger are concerned blatant alignment of foreign policy objectives with aid would de-prioritise the goal of poverty alleviation, and reduce the integrity of the work. With a probable refocusing of the objectives of aid to primarily assist foreign policy,  programs and projects likely to be cut will be those which have had a strong development mandate, with programs directly benefiting Australian interests remaining (and potentially increasing).

Prime Minister Tony Abbott said it made little sense for diplomacy to be steering foreign policy in one direction with aid working in another, indicating an understanding that Australia’s foreign policy can be damaging to the world’s poor and contrary to AusAID’s development mandate.

NGOs in Australia are set to receive a larger chunk of the pie, though with a change in performance indicators and ideology for AusAID, it will be a scramble for NGOs to quickly fit their programs into new frameworks.

Bishop has signalled aid to multilateral organisations like the UN, Asian Development Bank (ADB) will be significantly reduced. Multilateral organisations and institutions have long been criticised for being ineffective, costly and lacking in accountability, as evidenced by the AusAID and ADB Cambodian Railways Project. There seems to be a broader policy of preferring a bilateral approach.

Bishop says aid for trade will be a trademark of the aid program. Aggressively pursuing free trade agreements (FTA) appears to be crucial. The Coalition said the Pacific FTA agreement, PACER-Plus wasn’t moving forward quickly enough so a bilateral approach would be taken, with other Pacific nationals able to opt in later. “Foreign policy will be trade policy, and trade policy will be foreign policy,” Bishop said.

Infrastructure projects will gain a larger chunk of aid spending with Bishop determined to ensure that Australia gains greater recognition for assistance — larger billboards, Australian flags. AusAID staff at embassies will be fully integrated into the diplomatic network, as AusAID staff in Canberra will be subsumed into the existing DFAT staff.

This will impact program effectiveness on the ground. This has been demonstrated through militarising aid, such as in Afghanistan, with aid work being rendered ineffective and even dangerous for those involved when the aid is seen as linked with foreign political and military objectives.

What will remain the same?

The Coalition has committed to honouring previous deals made with the PNG government in return for continuing with a regional processing centre for asylum seekers and resettling refugees. Maintaining this hefty payout will require cuts in other areas of the aid budget. Using the aid budget to cover costs of the refugee policy at home isn’t new, though may point to an ongoing commitment to divert aid back to Australia for in-country costs of the policy.

Another initiative that will be maintained or expanded is the seasonal worker program. This allows Australian horticulture businesses to employ people from the Pacific during harvest — construed by the government as a commitment to the economic development of the Pacific through remittances. While remittances are important sources of income for communities, the program is supporting Australian business and industry interests by filling a labour gap, and the sustainability of the work is not guaranteed.

*AID/WATCH is an independent, membership-based monitor of Australia’s aid, trade and investment

Australia

Sep 6, 2013

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Aboriginal flag

The Oceanic chapter of the group Academics Stand Against Poverty approached me to provide input to an audit of the policy platforms of the major parties in the lead-up to the 2013 federal election. In all the cacophony about Closing the Gap, why is there no mention of the poverty gap between indigenous and other Australians or of the social and economic costs of its existence and persistence?

According to the 2011 census, there are an estimated 670,000 indigenous Australians, about 3% of the total population. But they are far over-represented in poverty statistics. The indigenous affairs policies of governments of all persuasions since the 1980s have explicitly aimed to reduce “wicked” problems seen as almost intractable — as evidenced by research that has tracked their persistence from 1971 to the present. Strong policy rhetoric, including Bob Hawke’s “Aboriginal Employment Equity by the Year 2000”, John Howard’s “Practical Reconciliation”, and most recently Kevin Rudd’s “Closing the Gap” have all aimed to reduce indigenous disadvantage as defined statistically. None has succeeded.

Despite evidence of deep poverty experienced by indigenous families and individuals available since the Henderson Commission of Inquiry into Poverty in the 1970s, governments have never pursued policies to explicitly eliminate or ameliorate indigenous poverty.

The current Closing the Gap policy was announced as part of the national apology in February 2008 and was subsequently incorporated in the National Indigenous Reform Agreement by the Council of Australian Governments. It focuses in a technical way on six key objectives (life expectancy, infant mortality, three on education and employment), with only one, halving the gap in employment outcomes between indigenous and other Australians within 10 years, potentially impacting directly on poverty. There is no policy to close the poverty gap between indigenous and other Australians in relation to the poverty line, usually set at 50% of median household income adjusted for family composition.

The best source of information on indigenous poverty is found in the National Aboriginal and Torres Strait Islander Social Survey (NATSISS), which can be compared with information for the total population in the General Social Survey (GSS). Economist Boyd Hunter has undertaken thorough analysis of these data sources and has asked in recent 2012 research “Is Indigenous poverty different from other poverty?” His answer is a resounding yes.

There are many complexities underlying indigenous poverty that are not adequately considered in standard poverty analysis, including non-Western forms of household composition, non-monetary income in many situations, and the absence of adequate measures of costs outside capital cities. Nevertheless, Hunter’s analysis of income alone shows the depth of indigenous poverty. In “Revisiting the poverty wars” he estimates that 41.8% of one-family indigenous households live in poverty, compared with 17.3% of non-indigenous households, a massive difference. And for indigenous households, poverty is far higher irrespective of location.

His most recent analysis indicates that for sole-parent households there is no statistically significant difference between indigenous and non-indigenous households (40% to 50% live in poverty), but for couples and other household forms there are  statistically significant differences.

The policy responses of the two major political parties, the ALP and the Coalition, to this situation is surprisingly similar, adhering to an approach highlighting individualism, market solutions, entrepreneurship and asset accumulation. Indigenous people, it is proposed, need to engage more thoroughly with the mainstream education system so as to be in a position to take on “real” jobs, whether such jobs exist locally or not. Increasingly there are proposals that if people live in regional or remote circumstances where mainstream labour markets are absent they should migrate for employment away from ancestral lands or engage in fly in/fly out or drive in/drive out employment.

The heroic assumption is that if the employment gap closes then poverty will be reduced — although as the aim of policy is to half close the employment gap by 2018, presumably poverty would similarly only be half eliminated. In any case, as outlined by me in Crikey in February 2013, evidence from the 2011 census indicates employment gaps have widened not closed since 2006.

Continue reading “Why neither major party is addressing indigenous poverty”

Federal

Sep 4, 2013

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In Kevin Rudd’s first stint as prime minister he made much of his plans to help the homeless, vowing to halve homelessness by 2020 and offer supported accommodation to all rough sleepers who needed it.

In this election the issue has barely rated a mention, let alone extra funding. Amid this silence, the number of homeless people on our streets is rising.

Just 12 months after Rudd was elected in 2007, he and then housing minister Tanya Plibersek launched the white paper The Road Home, mapping out how to achieve Labor’s targets. Did it work? Almost 90,000 people considered themselves homeless in 2006. This rose by 17% in 2011, when 105, 237 people considered themselves homeless, according to the Australian Bureau of Statistics. More recently, the Australian Institute of Health and Welfare reported that 157,000 accessed homeless services in the six months between and July and December 2012 — an increase on the 2011 census figures.

James Farrell, a lecturer in law at Deakin University and former manager of the PILCH Homeless Persons’ Legal Clinic, told Crikey that while it was notoriously hard to measure rates of homelessness, there was evidence that the problem was worsening.

“Despite significant investments, particularly on housing through the economic stimulus package, over 100,000 Australians are homeless on any night,” said Farrell. “There’s more and more families becoming homeless, with almost one in five users of Australia’s specialist homeless services aged under 10.”

This disturbing trend was also noted in a 2013 study by the Salvation Army, which found that 33% of the nearly 3000 people who relied on the organisation’s homelessness services identified themselves as single parents, with 61% of the entire sample being women. The study also found that 13% of respondents identified themselves as couples living with one or more children.

Fast forward to the election campaign 2013. Neither Labor’s ambitious plans, nor the increasing rates of homelessness, have raised more than a passing mention.

On August 5, federal Minister for Housing and Homelessness Julie Collins reaffirmed Labor’s commitment to halving homelessness by 2020. A Labor campaign spokesperson told Crikey that $320 million of joint funding was provided through the transitional National Partnership Agreement on Homelessness in 2013-14. “This includes $150 million from the Commonwealth, which is accounted for in the 2013-14 budget,” the spokesperson said.

As for the Coalition, which is likely to win the election, it has not yet committed to signing another four-year agreement with the states and territories (the transitional National Partnership Agreement on Homeless will expire in 2014). This is despite the Coalition promising to combat the causes of homelessness.

“At the moment, if I’m frank, the potential for a new agreement doesn’t look good,” Toby Hall, the CEO of Mission Australia, told Crikey. “The various players almost outdid themselves not to sign the one-year extension of the original agreement with political point-scoring, delays and back-biting. It will be a small miracle if we can get all sides at the table to sign on to a new four-year deal.”

In June, the Greens announced their Homelessness Action Plan, which aims to provide accommodation for every rough sleeper by 2020 at a cost of $233.2 million per year, and to double funding for specialist homelessness services provided under the National Affordable Housing Agreement. That would cost $507 million per annum.

So there are some policies out there, but the general silence on the issue this election has been noted by homelessness services. “There has been practically no mention of homelessness in this election campaign,” said Farrell. “While the campaign has focused on make-up artists, missed baby-kisses and twerking, serious social policy issues like homelessness are being ignored.”

Hall agrees: demand for his organisation’s services had increased in recent years. “While I don’t doubt the Prime Minister’s earnest desire to tackle homelessness, nor the Opposition Leader’s passion for the same subject, it’s true that during this campaign, homelessness and housing have been conspicuously absent from discussion and that’s a disappointment,” he said.

The issue of homelessness is a complicated issue that cannot be resolved through government funding alone. But Zach Wheeler, executive officer at the Father Bob Maguire Foundation, told Crikey that the lack of a national discussion during the campaign is restricting public awareness of rising rates of homelessness.

“As the major parties avoid the issues that seem controversial, we avoid recognising a growing homeless population or rising poverty in Australia because it does not fit the vision of 21st century Australia,” said Wheeler.

Federal

Aug 14, 2013

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Four years ago I moved with no great enthusiasm and a troubled child to Logan City, one of Australia’s 10 poorest urban areas. It’s in the seat of Forde, where ex-premier Peter Beattie is mounting a political comeback. There’s plenty for him to do.

Divorce had cost me my farm in northern New South Wales, and housing in Woodridge was, and remains, some of the very cheapest within striking range of the Brisbane CBD — according to the Australian Bureau of Statistics, 96% of Australian postcodes have higher socio-economic status than we Woodridgeans. The shift over the Queensland border was unwelcome, but it wasn’t frightening. I had been poor before — I had the skill set, or at least the memory of it — and more or less agreed with George Orwell:

“It is a feeling of relief, almost of pleasure, at knowing yourself at last genuinely down and out. You have talked so often of going to the dogs — and well, here are the dogs, and you have reached them, and you can stand it. It takes off a lot of anxiety.”

For me, Brisbane-born and partly Logan-raised, it was a case of returning to the dogs rather than meeting them for the first time. For my unwell teenager, though, it was a revelation to discover that that there are entire supermarkets that stock no bread other than sugary white pap; that smiling at strangers is often viewed here as a highly suspicious precursor to extortion; and that screams followed by sirens can become the unremarkable aural wallpaper of your urban existence.

The poor are always with us, the Good Book says, and statistics agree: 9.5% of people in the greater Brisbane area officially live below the poverty line (Australian Council of Social Services, 2011). In 1984, as a 17-year-old caring for three small kids in Eagleby, I believed that nearly all Australians lived like we did, with far too many animals, dying cars and bugger all disposable income. In most such families, being rich is the stuff of pure fantasy, and the rare relative (usually distant) who is a business owner or a professional is seen as a beacon of jaw-dropping achievement. Ali G made everyone laugh in the 2000s by suggesting that Bill Gates was so amazingly wealthy, he could supersize his McDonald’s meal any time he wanted. Yet for Black Belt kids, that is exactly what being rich means: not having to worry about your next feed, and not needing the preface Please Sir for the ever-present question: Is there any more?

How do my Black Belt peers manage? How do single mums, in particular, get by on current levels of welfare? And what dreams are possible for the Brisbane underclass in 2013? To answer these questions I interviewed three women who are doing it tough in the greater Brisbane area. This is the story of one of them. Names and some identifying details have been altered.

Selma is 27 years old, dark-haired, doe-eyed and slender. Her pale left arm bears a saga of old razor scarring, but when I speak to her in March Selma is bursting with toughness and intelligence — “I hate pity, and I don’t want handouts.” A full-time student, Selma works intermittently as her TAFE course and four children under 10 allow. Their father, whom she still refers to as her partner, has spent the past decade in and out of jail and is in long-term residential rehab for his amphetamine addiction. After many years in the Black Belt, Selma has recently moved with her four small boys to a Housing Commission house near Cleveland.

Selma’s family fled the war in Yugoslavia when she was 11. They escaped to a primitive Croatian shack without running water and ate “UNHCR food, like they have in Africa or whatever. It tasted worse than f-cking dog food. We had nothing, bombed house, jack shit, but still Mum was trying to do little tiny jobs and send money back home, would you believe?”

“I was in that situation for nine years. They say you make a choice, but I don’t ever remember choosing to be beaten up!”

Selma’s Croatian father’s family wouldn’t accept her Serbian mother, and her Serb mother would rather die than deny her identity. Selma gives a small dry laugh. “She’s like, ‘kill me as I am, this is me’.” Severe domestic violence between her parents was a problem. “He’d be off doing his crazy things, you know, trying to join the army, falling asleep in the snow, drinking, whatever. He’s a heavy drinker and he has a mental illness. I 100% believe it’s PTSD.”

When Selma’s family came to temporary refugee flats in Brisbane they were shown how to shop, how to catch trains, what Centrelink was for. “We didn’t know anything. I went to school in year 5 speaking no English. It was pretty embarrassing, and I had no friends. They accept you to a certain extent, but not fully. Like you’re white but you aren’t white ‘enough’ I was an outcast all over again.” As a young teenager, Selma ran wild. Working two pink-collar jobs — factory by day and cleaning by night — her mother somehow found the money for Catholic school. It was there that Selma made her deepest friendship, with a Murri woman who would become her sister-in-law.

“Our families sent us both there to ‘fix’ us. We were best friends from the day we met. She left in year 9, and a year later she had her son. I left school in year 11, and had my son in 2004. She wasn’t my best friend, I call her my sister.”

Selma’s troubled friend had drug issues. This, along with poorly managed gestational diabetes, led to her losing her second pregnancy at seven months. The father is in jail, as is the father of her older, living son. A third man (“really violent, on everything, heroin, downers, speed”) was her boyfriend at the time the baby died. Selma has deep reservations about what her friend experienced. “She’d been r-ped before, you know, and also r-ped as a young teenager. And at the hospital there was bruising on the inside of her thighs, here and here. I told the hospital, ‘what are you going to do about this?’ and they said, ‘oh, we don’t know how that got there …'”

Selma’s friend survived the diabetic coma that led to her baby’s death, but she lost the use of her legs. The addict boyfriend quickly vanished, and in 2012 she became isolated and lonely in her West End flat. She had “friends” once a fortnight, when her dole arrived. “They just found her there, dead, one day. They said it was the diabetes. But when she died, she had a big sore on her head; she’d had it for months. I heard someone chucked battery acid on her. Who knows what really happened? The cops went down to Musgrave Park after she was found and they told people there about it before her family even knew. Just like you’d go, ‘oh, we found a dead dog, anyone missing a dog?’ That’s what it felt like.” Continue reading “Doing it tough in Forde, Beattie’s would-be electorate”

Australia

Mar 26, 2013

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Prime Minister Julia Gillard makes it clear her government stands for Labor values, but are her positions really that different than the Coalition’s? When it comes to government handouts, the answer increasingly seems to be no — both the John Howard and Gillard governments clearly divide income-support recipients into “deserving” (aged, very disabled, full-time carers) and undeserving working-age recipients with no or inadequately paid jobs.

Over the past six years the government has tightened restrictions on who is eligible for higher-level pension payments, curtailed payments to single parents with children over eight and implemented stricter criteria for receiving disability payments. Since January this year more than 60,000 single parents were moved from parenting payments to Newstart.

Single parents have lost between $62 and more than $120 per week, with the highest losses for those who were already in paid work. As 60% of those who were moved to the lower payment were already earning part-time pay, in accordance with the policy, it is unclear why they were moved and their incentives to stay in paid work were reduced.

“I am trying to finish my last year of teaching at uni, and my 12-year-old has just started at high school,” one single parent emailed me. “I am drowning with the changes. Do I leave my studies, or lose my home? My daughter and I have been counting down until I have a job in teaching.”

On  March 22, the Australian Council of Social Service released new figures showing 100,000 people with disabilities now on Newstart were well below the internationally accepted poverty line used to measure financial hardship in wealthy countries. In the same week, the Joint Parliamentary Committee on Human Rights said:

“The committee considers that the government has not provided the necessary evidence to demonstrate that the total support package available to individuals who are subject to these measures is sufficient to satisfy … the minimum requirements of the right to an adequate standard of living in Australia.”

“Why are they being kept on a payment that is widely acknowledged as inadequate and is designed as a short-term option?”

One can only assume the government is convinced its regressive income support policies are seen as appropriate by the “working” voters it seeks to reclaim or attract.  By tapping into long-term prejudices against those seen as “dole bludgers”, the government has taken over the “welfare to work” push of the Coalition.

So far indications are it is unlikely the ALP government will make any serious changes to the significant deficiencies of their current income support policies. Despite evidence these policies are not improving the living standards of our most disadvantaged groups, the Labor Party is determined to expand them. The PM’s social inclusion model is very limited, as it is peopled by workers, working families, and more recently, modern families.

This approach is very different from older Labor understanding of the difficulties many have in finding appropriate jobs such as the structural barriers, prejudices and limited job vacancies most face. Gillard seems to confuse the interests of unions with the wider Labor movement, which accepted the structural barriers that create poverty and disadvantage. She and her colleagues accept the neo-liberal view that failures are mainly bad individual choices and lack of personal effort.

This set of assumptions fails to recognise the evidence in the government’s own data on current recipients of the inadequate Newstart allowance. The number of people on the payment in January 2013 was 682 873 in toto, but only 355,178 were also registered as job seekers. This means nearly 330,000 Newstart recipients were officially recognised as having good reasons that exempted them from looking for a job. The incentive to find enough paid work to move on was obviously not effective, as more than half of the job seekers (234,624) had been on the benefit for more than 12 months and that proportion is increasing.

This is not surprising as the competition for jobs for those without recent experience and often appropriate qualifications is very limited. There are, on average, at least four job seekers per vacancy. Many have visible characteristics that raise employer prejudices, with 100,000 people with disabilities now on Newstart Allowance, and this number will increase as the criteria tighten for disability support pensions.

Why are they being kept on a payment that is widely acknowledged as inadequate and is designed as a short-term option? If an ALP government can’t recognise the serious social and institutional barriers, including parenting needs and prejudices against disabilities, then we will see increasing inequalities and poverty. These policy flaws seriously damage claims that fairness is part of Labor values, as well as letting down the most vulnerable people who expect better from this party.

Economy

Feb 28, 2013

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Bono

If you want a living demonstration of American inequality, the details of this week’s TED conference in Long Beach, California, might do the trick.

TED is a non-profit which aims to spread good ideas, through conferences, projects and a video site. In the conference’s fifth and final year here, attendees have paid US$7500 apiece to attend and soak up a week of “ideas worth spreading”. Tuesday morning, Bono (estimated personal wealth: US$600 million) spoke to 1400 other rich or otherwise privileged people about solving global poverty.

It would take someone on California’s minimum wage 937.5 hours to make enough money for the ticket price (many undocumented migrants work for far less than this). It is a shade less than the five-year decline in California’s real median family incomes to 2011, according to the latest census data (US$7726) — a figure that indicates the further disappearance of the American middle class. Long Beach’s unemployment rate is 11.5%, and benefits in the US are far more miserly than in Australia.

One block west of the Long Beach Performing Arts Centre, where Bono was speaking, charity workers were scooping out meals of lentils and rice from a big orange casserole dish. Many of the 30 or so homeless people they fed were clearly also suffering from untreated mental illnesses and other health problems that charity simply cannot address. A few blocks in the other direction, a disabled man who said he was a veteran was panhandling as young men milled around the LA metro stop near a discount shopping area.

It’s true that you didn’t have to show up to participate. TED was offering individuals and institutions like primary schools “TED live” online memberships for only US$995. It’s unlikely that Long Beach’s public schools will be taking that option, though — the United School District has suffered cuts that in 2012 alone meant $20 million in budget shortfalls. The City College and CSU Long Beach have had similar problems, as the state slashes public services following revenue crashes during the recession. Until the recent passage of Proposition 30, California’s constitution meant that no new taxes could be raised to address this shortfall.

Sure, it’s easy to point out the public squalor nearby to any glitzy cosmopolitan event. But that doesn’t mean it shouldn’t be done. And with TED, it’s actually quite important because of the organisation’s history of proffering apparently simple solutions to (or summaries of) complex social problems that tend to dodge or obfuscate the central issue of distribution of wealth.

Bono — who called himself as a “factivist” — described “soul-crushing” poverty in the developing world, where people live on less than $1.50 a day. It may be a problem on the way to being solved, and Bono said governments needed to act to further reduce this poverty. He didn’t discuss his native Ireland, where, as in most of the Western world, poverty has increased on every measure — as austerity bites, the poor, and especially the welfare-dependent, suffer the consequences. Public services have been slashed, including the educational services that remedy poverty. Above the “soul-crushing” threshold (the determination of which helps make poverty distant and African, not proximate) are millions of people worldwide who live in constant deprivation in unequal societies.

“To fix this would require either the reduction of the large fortunes of people like Bono, or a longer-term change in the way wealth flows through the economy.”

To fix this would require either the reduction of the large fortunes of people like Bono, or a longer-term change in the way wealth flows through the economy.

The common atmosphere in TED talks — and the reason Bono condescended to describing himself as being “s-xually excited” by data — is a kind of hegemonic wonkism. They share a common narrative: a problem that has existed in its present form since time immemorial is solved when someone does something counter-intuitive, or a clever geek takes a new look at the data. As a generic structure, this enables the promulgation of a political fantasy: that individuals can master and alter complex events without engaging in any serious conflicts over values or resources. But the world, as most adults know, is rarely so responsive to individual will — historically, the biggest changes come from concerted communal activism and social movements.

It’s not that TED doesn’t attract smart people — eminent sociologist Saskia Sassen spoke. And it’s not that some of the ideas presented aren’t worth hearing. But the problem is that TED’s basic format, and its generic traits, are depoliticising, precisely because they exclude debate. An illustrative example from TED’s front page yesterday is a recent talk to TEDx Thessaloniki by Edi Rama, the mayor of Tirana, Albania, from 2000-2011. Rama talked about how painting the buildings in the city bright colours reduced crime and bolstered civic pride, only briefly mentioning his “demolition of illegal buildings”.

He engaged in large-scale removal of informal and illegal businesses that had for a long time operated out of kiosks in public parks. He seized other private property in order to expand public space. Can we believe that this did not involve intense political conflict and principled resistance? Can we believe that there aren’t lasting resentments in the city, which doesn’t even have reliable drinking water? It may be that all of this was justifiable and necessary, but Rama is allowed to present his only real opposition as “corruption”. The paucity of alternative information available to English speakers allows his unchallenged talk to stand as a definitive record of events. There’s no debate here, and therefore no politics, only a deceptively simple solution — which might be just be deceptive.

In many ways, though, TED is consistent with the long history of liberal politics. It’s not just that it’s colossally smug and patronising — what, after all, makes an exclusive conclave of rich people think they have the collective knowledge to solve, say, the problems of poverty? But it’s also that what’s on offer is less ideas than reassurance — primarily the reassurance that our problems are reducible to a series of technical problems or lateral-thinking puzzles, and people like us — members of a cosmopolitan liberal elite — have the answers. Like all versions of liberalism, it tries to gentrify politics.

Needless to say, the TED program offers very little insight or discussion about what’s at stake in the US, California or LA County. The only idea I could find that is remotely concerned with this neighbourhood is a man who began a community gardening project in South Los Angeles. But unlike earlier kinds of paedagogical institutions, TED is not much concerned with the community that hosts it. TED is in the cloud. It’s an essentially rootless and mobile entertainment product: when it rolls up and moves to Vancouver next year, few traces of it will remain.

Australia

Jan 3, 2013

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It was an easy headline, especially given the report was released on a Sunday. “One in eight Australians live in poverty,” said the ABC. “More than two million Australians in poverty,” ran the AAP copy. Fairfax ran some profiles of people struggling to make ends meet off the back of the Australian Council of Social Services’ new report on the extent of poverty in Australia.

Few bothered to look into the basis for ACOSS’s numbers, beyond that it was an internationally-accepted poverty benchmark. ACOSS used the OECD’s poverty definition, which is 50% of median disposable income. It also provided data for another, less austere benchmark, 60% of median disposable income. On the basis of the lower OECD definition, which ACOSS prefers, 2.265 million Australians are living in poverty. Using the 60% definition, 3.7 million Australians are.

Fifty per cent of median disposable income is $358 a week for a single adult and $752 for a couple with two children.

Neither sum is easy to live on. But they’re the product of an arbitrary benchmark: there will always be a substantial proportion of the population identified as “living in poverty” if you define poverty in relation to median income.

But deprivation-based measures of poverty allow us to move away from arbitrary benchmarks and consider how many people are actually in financial circumstances where they’re unable to afford basics most of us consider essential. And some high-quality work on this has already been done, including by ACOSS.

Earlier this year ACOSS published a report, “Who is missing out? Material deprivation and income support payments“, based on a study by Professor Peter Saunders and Melissa Wong of UNSW. The study, which used data from the 2010 “Poverty and exclusion in modern Australia” (PEMA) survey, looked at how many households displayed “deprivation indicators” based on a range of indicators widely agreed to be “essential” for households.

For example, 99% — or more — of people agreed warm clothes and bedding, medical treatment, ability to afford prescription medicines, and a substantial meal at least once a day were essential. Over 90% agreed up-to-date schoolbooks, the ability for kids to participate in school activities and outings, a decent and secure home, and regular social contact were essential. The only survey indicator that appears to have been widely disputed as “essential” was “a week’s holiday away from home”, which was identified as essential by 54%.

“The most at-risk group for lacking ‘essential’ items is, unsurprisingly, Newstart-recipient households … this returns us to the debate over whether to increase the level of Newstart assistance.”

Using median income as a measure of poverty allows us to capture the sense of “relative poverty”, which is important in a prosperous Western country. But the PEMA approach also enables a comparative element. For example, 72% of PEMA respondents agree computer skills are “essential”, even if they would not fit into any meaningful definition of absolute poverty.

Using the PEMA data, Saunders and Wong provided us with an alternative take on poverty in Australia. But the result isn’t one to fill us with complacency: 15.3% of households reported lacking at least 3 of the “essential” indicators.

This included 18.5% who couldn’t afford a week’s holiday; indicators at the other end of the scale are much lower: inability to buy prescribed medicines was 2.9%; inability to afford children’s participation in school activities 2.6%. But 20.7% reported not having $500 in emergency savings; nearly 12% reported being unable to pay a utility bill at least once a year.

The most at-risk group for lacking “essential” items is, unsurprisingly, Newstart-recipient households; 61% reported lacking at least three indicators, although the sample size is too small to provide reliable figures. Households reliant on the disability support pension or parenting payments also featured strongly in households reporting deprivation indicators; age pension recipient households featured much less prominently; indeed, had a lower rate of lacking at least three essential indicators than the community as a whole; it was age pension recipients who didn’t own their own homes who were overrepresented.

This returns us to the debate over whether to increase the level of Newstart assistance. In August, even the Centre for Independent Studies, a serial participant in the “poverty wars”, argued there may be a case for an increase in Newstart for the long-term unemployed, provided it came with stronger requirements for recipients to search for work. This would be cheaper than an across-the-board rise that would simply represent a windfall for the majority of Newstart recipients who only receive it temporarily while between jobs.

And however arbitrary, the weekend report from ACOSS does put a human face on poverty. It’s worth examining to see who else is overrepresented: people in poverty are more likely to be female, more likely to be kids or older people, more likely to be single or lone parents, more likely to be from a non-English speaking country. But the difference between metropolitan and regional/rural poverty is quite low: 12.6% of people in cities and 13.1% of people in regional areas.