Swan slights jobless


Budgeting is about setting priorities and setting national directions. When governments are under pressure to raise extra revenue and make savings, it's important that the burden is carried by those with the broadest shoulders.

Wayne Swan has made a commendable effort to share that burden more fairly than is often the case. He has achieved a modest surplus while assisting many on low incomes. Indeed, low income households have not been asked to carry the budget back into surplus.

However, working age people who rely heavily on income support remain most disadvantaged. For example, the Newstart Allowance is set at such a low level that it's hard for anyone to search for work and live decently. In past years this group even missed out on stimulus payments.

A new income support supplement announced in the budget is a step in the right direction, amounting to $1.1 billion over four years. It goes to people on a number of payments, including Newstart and Youth Allowance. While a more substantial increase is needed so that this group can meet their essential living costs, this decision is a sign of some movement in recognising that action is needed. 

When budgets are tight, governments tend to seek savings by moving people from an expensive payment category like parenting payment and the disability pension to cheaper payment categories like Newstart. 

By moving a larger number of single parents from parenting payment to Newstart in this budget, the Government will effectively remove $686 million out of the hands of low income families. While some parents may be able to find work and improve their incomes, many in this group will simply have a much lower income to provide for their children and themselves.

While it makes sense to encourage income support recipients into work, cutting back on payments is generally not the best way to achieve that result. Also, for many single parents in this situation, there are significant challenges to securing work which allows them to take good care of their family. 

Surely it is better to actively promote work expectations and ensure access to child care while offering improved opportunities for education, training and employment assistance.

Relying on assistance that boosts opportunity rather than payment cuts does cost more, but parents with young children should be a high priority for our community. Research suggests that improving the incomes of disadvantaged parents can make a major difference for their children's future.

Swan has done well to invest in the future of lower income Australians in this budget while achieving major savings. The next step is to include some of the groups who have been left behind. After all, the way we treat the most vulnerable is the measure of who we are as a people.

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

Topic tags: Paul O'Callaghan, Catholic Social Services, Federal Budget



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Existing comments

Thanks for the humanity of this piece, Paul O'Callaghan. Forcing single parents onto Newstart is anything but the embodiment of Labor values that Julia Gillard claims for her approach to the economy. John Falzon wrote very movingly of the cruelty of John Howard's Welfare to Work policy some years ago. I'd love to see ES approach him for a comment on this cruel bit of Labor policy.

Joe Castley | 09 May 2012  

Thanks Paul. I suspect the editors wrote the headline for this article rather than yourself,, but it leads me to wonder whether the phrase "working families" actually means UNEMPLOYED families. (Or was that what it meant all along?) It has been a catchphrase in search of a clear meaning for at least 6 years now: are we there yet?

Tom Clark | 09 May 2012  

Wasted opportunities here in the Swan Song budget. He should have ended negative gearing, increased capital gains tax, stopped the school chaplain waste of money, brought to an end the dodge given to those in the community services sector who can salary sacrifice, taxed gambling winnings, ended the tax rort for religions, sunk the subs project, brought the defence forces home, added capital gains tax to the family home, ended the fuel tax rebate for diesel, taxed trucking more, introduced a progressive income tax system with no deductions, increased the tax free level to a 'living wage', taxed fags and booze more, introduced a takeaway food fat tax (increase GST on that sector) and cut the wages of senior public servants and semi-govt authorities bosses (climate change fellow on $700k pa)and wound back funding to private schools and private health insurance over some years to bring it to zero for both. Ended the bank monopoly, stopped subsidising outmoded car production, and redesigned the electoral system to bring individual voters a greater sense of involvement in selecting political representatives, which might then allow longer term planning by governments and removed the 3 year cycles of bad planning decisions aimed only at winning the next election. There are many avenues for this last change to consider.

Andy Fitzharry | 09 May 2012  

Newstart is not designed to provide for a comfortable living. If it would provide a comfortable living, then there would be no incentive for anybody to work or to look for work. True social justice is a system which provides for people unable to look after themselves and gives just and reasonable reward for peoples work. The Governments over the past couple of decades have done a good job in dismantling poverty traps.

Beat Odermatt | 09 May 2012  

This turned out to be a reasonable article. However, like Tom, I query the Headline. My first reaction was to by-pass the article because the tabloid style headline just presaged another knee-jerk Labor-bashing exercise. Why even the Australian has found merit in the budget for the so-called battlers! Governments have worked toward eliminating many of the poverty traps for those trying to transit from welfare to work. Much still needs to be done. The Newstart Allowance more than any other is unjust. Let a headline reflect that and not type the whole budget, indeed the thrust of the Labor Government as unfair to 'working families". This Government deserves more support for what it has delivered to the less fortunate in our society.

Casablanca | 09 May 2012  

Beatt Odermat, I wonder how you would go looking after two (or more) quite young children on your own, trying to make Newstart money stretch to allow you to travel long distances looking for jobs that you were able to handle and then have the time left over to look after those children. To imply that such people lack incentive to work is cruel nonsense. To imply that the system should make it hard for them to live, simply so that the better off can feel that noone is getting an advantage over them, shows an ignorance of the reality or else a complete failure to put yourself in their shoes.

Joe Castley | 09 May 2012  

The decisions of Gillard and Swan suggest some deep hostility to unemployed people, single parents and their children. They seem to believe it's important and necessary to subject these people to severe poverty. I wonder where this hostility comes from. What are Gillard and Swan's real beliefs about poor people? What are the supposed "Labor Values" behind these decisions? There doesn't seem to be much generosity or compassion for poor people in these Labor Values.

Ray Polglaze | 09 May 2012  

Tom Clark is right. A late night editorial error on Budget night had us titling it 'Swan slights working families' instead of 'Swan slights unemployed families', or 'jobless', as we wrote in the amended title, which you can see above. Apologies to Paul O'Callaghan for embarrassment the headline caused.

Michael Mullins | 10 May 2012  

Ray asks "They seem to believe it's important and necessary to subject these people to severe poverty. I wonder where this hostility comes from". Easy Ray, it's a real Tory view that allows noblesses oblige to work and for the well off to talk about 'the deserving poor', and that is taken from Christian thinking. So, it is a rightwing Christian meme that supports the wealthy being and remaining wealthy and allows them to distance themselves from any social responsibilities beyond recognising 'the deserving poor' and doing all within their power to maintain their own wealth, power and prestige. No doubt not what Jesus would have said.

janice wallace | 10 May 2012  

To JOE CASTLEY: It just shows that there are too many poverty traps. We may have as many just cases receiving welfare as we have abusers of our welfare system. The extremely high cost of child care in Australia is one of the issues which help to keep many women out of the workforce. Social justice and fairness may have as many definitions as the length of a string. If you look back 30 years, conditions for genuine welfare recipients have greatly improved. I stated that “True social justice is a system which provides for people unable to look after themselves and gives just and reasonable reward for peoples work”.

Beat Odermatt | 10 May 2012  

I agree with this summary of the budget. I also agree with comments that the headline is misleading and mischievous. I believe that this budget is fair and reasonable and also responsible. I also believe that most people who are either unemployed or underemployed should take personal responsibility to obtain a trade or professional qualification so that they can get a full time job in some part of the country. A significant number of people who live in the outer suburbs of our cities are lazy and lack the discipline to better themselves. An Access Economics study of a few years back found that the real unemployment rate in some areas, and especially the outer suburbs of Sydney and Melbourne, varied between 17% and 24%. This study also found that youth unemployment was 30% in some areas and middle aged male unemployment was 40% in some areas. These enemployment levels have resulted because of a historical cultural expectation that people can get a job without a trade or professional qualification. However, we know that most of these historical jobs, such as labouring, factory work and low paid clerical work have become redundant because of technology and transfer to Asian countries.

Mark Doyle | 11 May 2012  

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