Flawed beauty in back-to-the-wall Budget


With Labor's back to the wall due to fiscal pressure and an election only four months away, last night's Federal Budget represented this Government's last statement of its values and priorities.

We saw in evidence its values and priorities reflected in a ten year funding commitment to DisabilityCare and improved equity in school funding based on need. Similarly the oral health care commitment in previous budgets looks set to improve access to affordable dental care for many low income families. Subject to how well they are implemented, these will improve the quality of life for millions of Australians.

We also saw an effort to improve revenue at a time when tax receipts are down by $20 billion. This includes closing some corporate tax loopholes and other tax arrangements. At the same time, much bolder steps will be needed in coming years in order to address the inexorable growth in health care funding, as well as infrastructure, education, welfare and a range of costs related to an ageing community.

Like a beautiful gem with a crack through the middle, this Budget also showed another side of the much touted Labor values and priorities.

There was only disappointment for the 680,000 unemployed Australians who might have anticipated that, after six years in office, this Government would finally acknowledge their exceptionally tough lives and offer at least some increase to the Newstart Allowance. The Senate Inquiry into allowances, including Newstart, last year was presented with overwhelming evidence of how harsh life is living on $35 a day.

Among many sources of evidence, the National Centre for Economic and Social Modelling found that households dependent on Newstart for their income were required to go into debt to be able to take care of their families. Yet despite there having been no real increase in that allowance level for nearly 20 years, and with the business community, economists and welfare groups urging the Government to get serious, Labor chose other priorities.

The modest offer to allow Newstart recipients to earn up to an extra $19 per week before losing benefits will be of some help to the 20 per cent who currently have access to employment. The 530,000 others will have to wait for a future Federal Budget. Similarly, the poorest Australian families are the ones to bear the brunt of not proceeding with Family Tax Benefit Part A, and of the large reduction in the value of the Baby Bonus.

The Catholic Social Services Australia network of agencies and those of other Church providers have been experiencing an increase in demand for our services. Families under extreme financial pressure often seek assistance through our networks. This is also the case for those asylum seekers on bridging visas who have been effectively shifted into poverty by the Government and banned from gaining paid work.

The Treasurer has emphasised his belief that Labor's values and priorities are reflected in this Budget. He is keen to help the battler. Yet there is a sharp dissonance between the Government's promotion of a 'fair go' through big reforms and its evident disinterest in so many citizens whose daily financial struggles are profound.  

We have regularly heard ministers respond to questions about Newstart by saying that, rather than increase the allowance, the best outcome is for unemployed people to get a job. Getting a job is normally the best outcome, but one third of people on Newstart have been on it for over two years and more than half have languished on this inadequate payment for over one year. Newstart was only ever intended to be a short term measure.

Notwithstanding the benefit of the big reform measures, our community is diminished by continuing to treat some of our most vulnerable households as a secondary consideration. We should judge ourselves by how we treat the most vulnerable amongst us.

A key challenge for Labor and the Coalition is to provide leadership on the revenue generation side of the ledger, including by identifying larger measures than hitherto, such as reforming our skewed superannuation tax concessions system, so that health, education, infrastructure and social programs can be adequately funded.

Paul O'CallaghanPaul O'Callaghan is Executive Director of Catholic Social Services Australia. 

Topic tags: Paul O'Callaghan, Budget 2013, Newstart, NDIS



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The solution is not by punishing working families but by providing more incentives. We have a welfare system which rewards wrong behaviour and punishes hard working people. We can have a look at two examples, we may them Jack and John. Jack is pretty much content with his life. He had a job and he is getting enough to have a car, an occasional holiday, going to the footy, smokes and has a couple of beer in the evening. He knows that better paid jobs may be available elsewhere, but it would mean moving and getting away from his friends. He rents a home and pretty much spend most of the money he earns. He sees no reason to pay anything towards his superannuation, after all old age is a very long time away. John is also content with his life. He knows that everything in his life is up to him. He moves to better paid jobs, even if it means moving. He has given up smoking and he is only drinking socially. He has saved up money and managed to buy a home. He is putting a few extra dollars into his superannuation. After many years, he finally manages to pay off his home and he can pay more money into his superannuation. When Jack and John retire. Jack is being rewarded by the Government for having no home and very little superannuation. John on the other hand is being punished for planning a little bit better for his future.

Beat Odermatt | 15 May 2013  

Thanks, Paul. These two points need to be made over and over. The big reforms of this government, especially the NDIS will be a source of pride to it even if it loses the election. But how come it can't see the awful cruelty it inflicts on single parents, on the unemployed and on asylum seekers! How can Julia Gillard keep trumpeting her Labor Values and yet determinedly pursue policies that hurt the weakest?

Joe Castley | 15 May 2013  

"evidence of how harsh life is living on $35 a day." There are millions of people in developing countries who would think $35 a day was luxury. They cope with far less because they make the effort to grow their own vegetables, keep a few chickens, and make use of whatever resources are available. They take responsibility for their lives, in much the same wsy as our pioneering families did. Too many people are becoming too reliant on "handouts", refusing to take jobs because they can get almost as much from handouts, and then spend their time just laying about. Perhaps we need a war or a natural disaster to spur us to actions, but someone ought to be able to initiate a program about personal responsibility. Charles the Great ruled that every family should keep a dozen chickens, to provide for their needs. Surely some incentive can be found to revive the self-reliance of our pioneering ancestors. In the meantime, help will be required to make the adjustment, but self-reliance can be promoted as an ideal to be striven for, instead of allowing our edition of the "cargo cult" to take over.

Robert Liddy | 15 May 2013  

I suppose, Mr O'callaghan, the view depends very much on what colour glasses one is wearing at the time. If indeed this Labor government has finally gone back to its principles of care for the underprivileged, where was the evidence 0f this over the last few years? They have reverted to the false mantra of the champion of the battler only because these self-interested individuals have lost their traditional base and now are afraid of losing their perks. Three cheers for the extra $19.00 dollars a week - it means absolutely nothing and would buy one cheap take away meal per week. It costs the government and taxpayer nothing. Why not make it a couple of hundred dollars a week paid by the employer? Will be interesting to see what job will pay $19.00 per week! Nothing but smoke and mirrors deceit - typical of this mob. But wait! We are blessed in this country in that we are about to witness the greatest miracle since the resurrection. Through the ministry of St Julia and St Wayne all of those poor disabled souls, who like the abled bodied become more frail and dependent as they grow older, will be cured and require no further care after they reach their 65th birthday. Its a miracle!! But really just smoke and mirrors. There is no saintly litany left in the Australian Labor party (a great disappointment to me) nothing but a repetitive and practiced litany of lies and secular self-indulgence. However, Mr O'Callaghan, your concern for the disadvantaged is very evident in the spirit of what you write. I feel sad for you in that you will not find what we should all seek under the shadow of this government.

john frawley | 15 May 2013  

Indeed, and thank you, Mr O'Callaghan. What have we come to when 'the least of our brethren' are completely ignored. I feel deeply sad. I am also sickened by ignorant and simplistic attempts to reduce monumental suffering to figments of a cruel imagination.

Patricia R | 15 May 2013  

Robert Liddy, those who can keep chickens and grow their own vegetables do not generally live in one of the most highly urbanised countries of the world. Human nature dictates that there will always be someone willing to take without giving. However, that is not most of us. It is clear that you have had no or little contact with the already-existing suffering of the poor in Australia, none of whom need a war, and many of whom have ALREADY suffered from the natural disasters in the past few years. Mr O'Callaghan is right... our mean treatment of the vulnerable reflects badly on we who are more comfortable.

Patricia R | 15 May 2013  

I have always had great sympathy for single mothers whom I believed were struggling. Now I am shown on the Television single mothers, chosen by advocacy groups, who live in more expensive homes than mine, with better furniture than mine and who complain because there is not enough money for their daughter's dancing lessons or that their teenage sons have to be left alone for a hour or so in the late afternoon. Yes, I want financial support to go to the most vulnerable people in our community, but let's make sure that it goes to them and not to people who can live well without it.

clair | 15 May 2013  

But we all know we have to spend $3.2 billion to jail innocent asylum seekers so of course the poor can't get a raise.

Marilyn | 15 May 2013  

I agree with Joe, but in reality this goes one step further. This cruelty is being inflicted on the children of single parents. We seem to have lost the concept that children are the future of this country - or, is it that we believe that wonderful discoveries in medicine mean that this present generation has finally become immortal?

Margaret McDonald | 15 May 2013  

What the Government, Business & Economists know is that within a capitalist market economy a natural rate of unemployment is required; i.e. if unemployment sinks to low then inflation becomes an issue. Also Business require a certain amount of unemployment to keep wages low, therefore to maintain a healthy economy there ALWAYS has to be a certain level of unemployment! Thus things are not a simple as people should be able to obtain employment within 12 months, the issues surrounding long term unemployment are much more than simply whether they can be bothered looking for work. You and other's need to move away the pathological tendency to stereo-type long-term unemployed as dole bludgers. Whether society wants to acknowledge it or not, everyone benefits from unemployment, rather than condemning those that have to slot into the necessary unemployed group required for a healthy economy, they should be supported & given enough to live on rather than be constantly told that the way out of poverty is employment, when everyone knows that there will NEVER be full employment in a capitalist society. Roy Morgan states unemployment & under employment, figures is a total 2.395 million Australians (19.7% of the workforce).

Pamela | 16 May 2013  

And to Clair, those single mums you see on TV in there house's that are "better" than yours are mostly in government housing or paying extremely high rent (housing shortage not a lot of options), they mostly do not own their homes & never will have the opportunity to... gee shame on them for living in government housing that is reasonably new, due to the demand to provide affordable housing for those less fortunate & shame on them for liking to have a clean & tidy home... so quick to judge without facts!!

So we care | 16 May 2013  

(Patricia R 15 May 2013): "Robert Liddy, those who can keep chickens and grow their own vegetables do not generally live in one of the most highly urbanised countries of the world. Human nature dictates that there will always be someone willing to take without giving. However, that is not most of us..."It is clear that you have had no or little contact with the already-existing suffering of the poor in Australia." I have had plenty of contact with young Australians who prefer to accept "handouts" rather than do a job, and there are many of them. If those would take available employment opportunities, the "handouts" they presently absorb would become available for the really needy. The "vegetables and chickens" were intended only as "doing whatever each one can do to improve their situation".

Robert Liddy | 16 May 2013  

I am sorry Paul, but I do not see it as a government responsibility to be a charitable institution. We blame our unfortunate brothers and sisters in remote areas as being "welfare dependant", and find ways of vilifying them. What about our city-dwellers who have become used to "handouts"? Isn't charity something we all need to practise? I think the Catholic Church has more funds than the Australian Government! I think it should become a "giver" and redistribute what it takes from the rich and poor alike. Sorry, if I sound crude but it is a perception that many feel quite passionately about.

Roy | 17 May 2013  

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