People-power brings cruel Newstart policies to a halt for the time being

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Colleen O’Sullivan

i'll take the job_opt
I’ll take the job? (Just let me steal to afford it first.) Kristian Niemi flickr cc

Until recently, unemployed people in the under-30 age group were facing the frightening prospect of living on zero income support for six months in every year. The Federal Budget 2014-2015 measure, worth $1.2 billion, would have affected 113,000 unemployed people under 30 years of age, according to the Australian Council of Social Service (ACOSS).

As if the high youth unemployment rate (Victoria’s rate hit a 15-year high in August) and fee hikes outlined for the higher education system were not enough for people in this age group to worry about, the Federal Government sought to take the safety net out from underneath them.

Thankfully, five months and two Senate enquiries later, the government is yet to receive support from any other political party on this policy. The fact that the debate has continued for many months is a strong indication of the community backlash to measures which place an unfair burden on the most disadvantaged people in our community.

ACOSS and community sector representatives did not hold back in their predictions for the dire consequences of such punitive policy aimed at the under-30s; many cited crime, homelessness, and abject poverty as the only possible outcome for a large contingent of young adults.

The government has either heeded community outcry, or a more cynical person might say they have realised the proposal wouldn’t succeed in its current form. On 21 September 2014, the Sunday Telegraph reported Labor, the Greens, and the Palmer United Party would block the proposals, which also included the indexation of the aged pension and family payments, and raising the working age to 70.

Does that mean the threat is over and people-power has won the day? Not exactly, the same article reported Social Services Minister Kevin Andrews was ‘expected to leave the door open to revisiting some of the reforms in future welfare reform legislation due next year’.

The New Zealand instance?

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Loose Change AUD $5.80 Joriel Jimenez flickr cc

In the days that followed, much attention was given to the minister’s comments that in New Zealand a policy exists whereby unemployed people wait one month for income support payments. An investigation by the Parliamentary Library noted that ‘there doesn’t appear to be formal one-month waiting period that applies to the main unemployment benefit payment in NZ’.

The National Welfare Rights Network (NWRN) confirmed, ‘the New Zealand model does require jobseekers to undertake some tasks before a benefit is paid, but the benefit can also be backdated once those tasks are complete’. In a strongly-worded media release, NWRN president Maree O’Halloran called on the Federal Government to ‘immediately abandon plans to cut unemployment benefits for young people under 30 for any period – whether for six months or one month’.

In some ways, the focus on the NZ policy, and debate about the waiting period in that country took the focus off the main issue. The ideology behind the concept that people can live for an extended period of time without access to vital supports is overtly cruel, and, as ACOSS Chief Executive Dr Cassandra Goldie explains, it ‘… represents a fundamental departure from the principle of basic support for all, in return for reasonable efforts to look for work.’

The focus on NZ and punitive policies have also taken our eyes off the big question: what is the government’s plan for addressing the structural causes of youth unemployment? St Vincent de Paul Society Chief Executive Dr John Falzon said, ‘The simple truth is that behavioural approaches will not solve structural problems’.  And as the ground-breaking 1996 Australian Catholic Bishops’ Social Justice Statement argued, ‘In the main, people are poor not because they are lazy or lacking in ability or because they are unlucky. They are poor because of the way society, including its economic system, is organised.’

Evidence shows that the vast majority of people on Newstart do comply with the strict systems and non-compliance penalties already in place to ensure they engage in job-seeking. Of the many cases that Centrelink investigates via data-matching tools, non-compliance is found in 15 per cent, according to the Australian Institute of Criminology report Welfare Fraud in Australia : Dimensions and Issues, in its June 2011 Trends and Issues.


So what would work to address the structural issues of youth unemployment? One answer is increased investment in training programs targeted at easing the transition from school to paid work. Unfortunately, one such program, Youth Connections, which provided alternative schooling, trade start pathway training, and employment programs, lost its funding in the Budget.

Another answer is an expansion of the wage subsidies program announced by the Federal Government, which is a payment to employees who provide employment to people who have been long-term unemployed. Dr Goldie said, ‘wage subsidies in regular paid jobs are extremely effective and should be expanded’.

Increased and appropriately indexed payment rates would also address the fact that Newstart has not been raised in real terms since 1994. As it stands, at $37 a day, the current level of Newstart is so far below the poverty-line that many in the not-for-profit and business communities believe it has become an obstacle to employment participation.

Continued public support is needed for programs that address the structural causes of youth unemployment in the event Minister Andrews once again decides it’s not the government’s responsibility to assist a sub-section of the population and they must fend for themselves and turn to charity to survive.

Charity should not be the default option for people abandoned by the government; however, it is worth noting that this cruel treatment is already meted out to refugees living in the community, some of whom receive absolutely no government assistance, and others of whom receive a payment equivalent to 89 per cent of the Newstart allowance.

If there is no other argument to convince that social security policy impacts us all, remember – just like homelessness – if it can happen to one sub-section of the community, it can happen to anyone.

Colleen O’Sullivan works in the not-for-profit sector, and is interested in social issues and politics.

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