Brotherhood Comment August 2005

Brotherhood Of St Laurence

Description

ISSN 1320 8632A REGULAR UPDATE FROM SOCIAL ACTION AND RESEARCHAugust 2005Shaking the foundations of the ‘fair go’?IR reform and Australian social policy The major story in Australian of growth. Some workers may accompanied by a major growth social policy in 2005 is not have got less but it still saved of an Australian welfare state. welfare, but industrial relations on the need for a high tax-social Between 1980 and 1998, per capita (IR) reform. This might seem an transfer system of the type which real social expenditure in Australia odd claim. Aren’t wages a matter developed in post-war Europe. increased by 83 per cent, from of economic not social policy? US$9,144 to US$15,538. Clearly, Historically the answer in Australia The dismantling of this Australian targeted income support and social has been No. Wages have been way of doing social policy was services are now functioning less as seen as both an economic and gradual. Separating the social wage a safety net and more as our main social issue. Indeed Australia was from the workers ‘restrained’ take- way of sustaining the ‘fair go’. viewed internationally as a unique home pay was a feature of the kind of ‘wage earners’ welfare 1980s Accords, while the use of the So what of the future? Will we state’, where wage regulation, centralised wage system to achieve abandon not just the means but not taxes and transfers, was the award equity finished with the 1993 the goal of the ‘fair go’ society? main ...

Informations

• Publié par: Zewyor
• Nombre de lectures: 113
• Langue: English

Extrait

A
R E GULAR
UPDATE
FROM
SOCIAL
AC TION
AND
RESEARCH

Shaking
the
foundations
of
the
‘fair
go’? IR
reform
and
Australian
social
policy

The major story in Australian social policy in 2005 is not welfare, but industrial relations (IR) reform. This might seem an odd claim. Aren’t wages a matter of economic not social policy? Historically the answer in Australia has been No. Wages have been seen as both an economic and social issue. Indeed Australia was viewed internationally as a unique kind of ‘wage earners’ welfare state’, where wage regulation, not taxes and transfers, was the main instrument of social policy. If the current IR reforms end this arrangement, they must mean a fundamental change in the way we ensure social needs are met. The Australian way originated in Chief Justice Higgins’ decision enacting a minimum wage in the Harvester case in 1907. This decision was embedded in the social liberalism of Federation Fathers such as Alfred Deakin and other champions of the worker. The idea was—in current jargon—to ‘make work pay’ so that, rather than being dependent on a welfare state, Australians would arrange to meet their own health and welfare needs. It was also the flip side of the Deakinite developmental or social investment state which aimed to develop diverse, high-wage industries with no room for lazy capitalists dependent on low-wage workers. After 1945 the significance of the minimum wage as a fence against poverty faded by comparison with the role of the centralised awards system in encouraging an equitable sharing of the proceeds

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of growth. Some workers may accompanied by a major growth have got less but it still saved of an Australian welfare state. on the need for a high tax-social Between 1980 and 1998, per capita transfer system of the type which real social expenditure in Australia developed in post-war Europe. increased by 83 per cent, from US$9,144 to US$15,538. Clearly, The dismantling of this Australian targeted income support and social way of doing social policy was services are now functioning less as gradual. Separating the social wage a safety net and more as our main from the workers ‘restrained’ take- way of sustaining the ‘fair go’. home pay was a feature of the 1980s Accords, while the use of the So what of the future? Will we centralised wage system to achieve abandon not just the means but award equity finished with the 1993 the goal of the ‘fair go’ society? Keating reforms. In this context Will we end up with a US-style the role of the minimum wage as working poor? a European-style a major defence system against welfare state? Or can we reinvent worker poverty resurfaced. If the the Australian social investment current IR reforms reduce even this state, which will not only set us protection, they will mark a final on the path to a diverse, high- break with Australia’s distinctive, wage economy but also redirect century-old way of doing welfare. the gains of economic efficiency to ensure decent minimum What are the policy implications? standards for all Australians? The notion that we might somehow become a ‘welfare-free’ society is Paul Smyth the stuff of fantasy. The winding [phone] back of welfare via wages has been [e-mail]

ISSN
1320
8632 August
2005

Contents Suspending
judgment
:Will
suspension
be
an
improvement
on
breaching? .
.............................................................. 3 Counting
the
cost
:Changing
payments
for
sole
parents
and
people
with
disabilities
.................................. 4–5 Challenges
of
an
ageing
population:
Prospects
for
financially
disadvantaged
older
Australians .
............. 6–7 Education
and
social
inclusion
:What
principles
should
guide
Victoria’s
education
system? .
......................... 8 Evaluation
of
the
Victorian
Government’s
place-based
initiatives .
................................................................................... 9 What
a
difference
a
place
makes
:Understanding
the
spatial
dimensions
of
inequality .
.......................... 10–11 Vital
but
undervalued
:The
Personal
Support
Programme
and
workforce
participation .
..................... 12–13 International
complaint
against
managers
of
Australia’s
detention
centres .
.......................................................... 14 New
information
resources
in
the
BSL
library .
....................................................................................................................... 15

uAugts
2005

1

From
the
General
Manager,
Social
Action
and
Research The broadening interest in BSL research agenda, covering on ‘Poverty and inequality in the social policy which we have theoretical issues such as the Howard years’. The latter involved been observing for some time in relationship between fairness and former SAR General Manager, Australia continues to develop. efficiency in economic policy and Alison McClelland, Professor Both the Commonwealth and the more applied studies on transport Michael Keating AO and SAR Victorian budgets for 2005–06 and place-based governance, sole economist, Rosanna Scutella. Both saw issues of social welfare very parenthood and labour market these events were co-sponsored much in the spotlight, while transitions, better supports for by the Centre for Public Policy industrial relations reform is raising severely disadvantaged job seekers, at the University of Melbourne. fundamental questions regarding settlement of refugees, and grass the future direction of Australian roots participation in policy Work is already under way on a social policy. BSL perspectives and program development. major BSL conference on child on each of these can be found poverty and social exclusion in this issue of Comment . Our efforts to raise the level of to be held in early December. public debate about social policy The conference will feature the The SAR highlight of the year appear to have struck a chord. Sambell Oration to be delivered to date has been our excellent Our lunchtime seminars have been by Kate Green, Director of the showing at the biennial Australian well supported, while popular UK Child Poverty Action Group. Social Policy Conference. We had demand meant that bigger venues six papers accepted for this major had to be found for our one-Paul Smyth research event on the social policy day symposium on ‘Joined up [phone] calendar. The papers reflected government in partnership with [e-mail] the depth and diversity of the community’ and our round table

News
about
accessible
eye
care
for
more
Victorians Brotherhood of St Laurence (BSL) receive an additional $584,000 appointment of research co-author research into access to affordable this financial year ($2.34 million Emer Diviney to the Community eyecare (reported in Comment  over four years). This will be used Advisory Committee at the Royal August 2004) has contributed to to deliver services to pensioners, Victorian Eye and Ear Hospital. a most encouraging response from people in residential aged care and The BSL’s optical frames business, the Victorian Government. In May supported accommodation, and the Mod-Style, has also worked with the 2005 the Minister for Aged Care, homeless. At the announcement, VCO on a purchasing policy to ensure Gavin Jennings, announced that Minister Jennings commended the that the Victorian Eyecare Scheme an extra 12,000 disadvantaged BSL eyecare research which had offers a contemporary selection of Victorians will benefit from identified service gaps and people frames to low income earners. additional funding to improve who were missing out on eyecare. access to eyecare services and The BSL will support the VCO in Emer Diviney subsidised spectacles over the next delivering the additional services [phone] four years. to the most disadvantaged. [e-mail] The Victorian College of Optometry Other outcomes from the research Note (VCO) w   h l i o ch w   - i c s  o c s o t  ntracted to run include the establishment of an  S V e ic e t in o g r   i c a l n e s a , r   l C y: h   a A n c g c i e n s g s   t P o r   e e s y s e u c r a e r s e B f u o l r l   e l t o in w   - n i o n . c 1 o 3 m , e Victoria’s eyecare program, optometry outreach clinic at the is available at <http://www.bsl.org.au/pdfs/ the Victorian Eyecare Scheme, will BSL Coolibah Centre and the Changing_Pressures_13_1.pdf>

Brotherhood Comment is published three times a year by the Social Action Published in August 2005 by and Research Division of the Brotherhood of St Laurence. Brotherhood of St Laurence 67 Brunswick Street The Brotherhood of St Laurence works for the well-being of Australians Fitzroy, Victoria, 3065 Australia on low incomes to improve their economic, social and personal circumstances. ABN 24 603 467 024 It does this by providing a wide range of services and activities for families, the unemployed and the aged. It also researches the causes of pov t e t r e t r y   , d   eal  F T a e c le s p i h m o il n e: e   : (  ( 0 0 3 3 )  )  9 9 4 4 1 8 7 3     2 1 6 1 9 8 1 3 undertakes community education and lobbies government for a be E-mail: [e-mail] for people on low incomes.

2


August

2005

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Suspending
judgment Will
suspension
be
an
improvement
on
breaching? A major, but little publicised, change Newstart). The most disadvantaged announced in the Budget was job seekers experience homelessness, the replacement of the breaching mental health problems, substance system (for job seekers failing to abuse, financial crises, often in meet various requirements) with combination. These pose major a compliance system based on barriers to employment, and also payment suspension from July 2006. make it more difficult to comply with requirements. The current This represents a radical shift by proposal takes little account of policy makers. Breaching has indeed these barriers and there is a danger long been criticised by welfare that vulnerable people could be groups for the harsh penalties (up subjected to multiple and damaging to $1600) imposed on the poorest suspensions. Many people could section of the community and for be left with little or no money compromising community agencies’ in their accounts on payday, and ability to retain the trust of their Centrelink staff could spend clients. Our research (Ziguras & hours sorting out payments. Flowers 2002) showed that the public was also concerned about the Some proposed details are of great unfairness of these penalties. concern. For example, when a Job Network provider sends a But breaching also fails to Participation Report (a notice that achieve its purported goal to a job seeker has failed to meet improve employment prospects a requirement such as attending by increasing compliance. There is an interview), Centrelink will little incentive to rapidly re-engage automatically suspend a person’s with a Job Network provider, payments unless their computer since the breaching penalty cannot record indicates that they are be reversed. As the Pearce review ‘vulnerable’ in some way. (Pearce, Disney & Ridout 2002) highlighted, the cut in income itself The Brotherhood of St Laurence compromises a person’s ability to and other church-based Job actively search for work. Further, Network agencies have argued punishments such as breaching that before suspending payments, generate resentment towards Centrelink must make at least Centrelink and Job Network, two attempts to contact the contradicting their role in assisting person to investigate whether job seekers (Ziguras 2004). circumstances (e.g. ill health, family crisis, housing problem) How suspension will work prevented their complying with a The new system will suspend a specific requirement. In such cases, person’s payments if they fail to suspension would unreasonable. meet a requirement, restoring It would also be very inefficient payment once they comply. This to suspend, then investigate, then reflects a desire to encourage people undo the suspension, as proposed. to re-engage with the Job Network A person whose payment is about rather than punishing lack of to be suspended should get some engagement. This is a good thing, warning from Centrelink, to give particularly if Newstart recipients them a chance to meet the missed can avoid any loss of payment. requirement (where possible) and thus avoid a loss of payment. However, simplistic reliance on suspensions could become a ‘hair- Another bizarre suggestion is that trigger’ system which affects many with a legitimate reason for missing more people (including people with a requirement, a person’s payments disabilities and parents moving onto will not be restored until they

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attend a Job Network appointment. This in effect imposes an extra obligation on someone who has done nothing wrong. While some Job Network agencies may be happy for people to be encouraged to recontact, this suggestion runs counter to natural justice. Also, someone who is suspended three times (with no reasonable excuse) in twelve months will have their payment stopped completely for eight weeks. Since suspensions will apply much more rapidly and to more people than breaches, many people are likely to get to a third suspension within a year, driving some into abject poverty. If a financial penalty is needed for repeated non-compliance, two weeks’ non-payment should be the maximum, and only after a thorough investigation of circumstances by Centrelink. The Department of Employment and Workplace Relations has been consulting Job Network providers and other groups on the policy details. This provides some encouragement that these problems might be fixed in the design stage, avoiding undue and widespread hardship when the system becomes operational. Stephen Ziguras [phone] [e-mail] References Pearce, D, Disney, J & Ridout, H 2002, Making it work: The report of the Independent Review of Breaches and Penalties in the Social Security System , Independent Review of Breaches and Penalties in the Social Security System, Sydney. Ziguras, S 2004, ‘Australian social security policy and job-seekers’ motivation , Journal ’ of Economic and Social Policy , vol 9. no.1, pp. 1–25. Ziguras, S & Flowers, C 2002, The community expects: public opinion about breach penalties for unemployed people , Brotherhood of St Laurence, Fitzroy, Vic.

uAg

Simplistic
reliance
on
suspensions
could
become
a
‘hair-trigger’
system
which
affects
many
more people
(including
people
with
disabilities
and
parents
moving
onto
Newstart).

ust
0205

3

Counting the cost Changing payments for sole parents and people with disabilities The federal government announced that Newstart is paid at a lower For a sole parent with two children It is difficult to some major changes to Disability rate than both DSP and PP and that between 6 and 15 years of age, the reconcile these Support Pension and Parenting people without work will be worse impact is shown in Figure 2. Such effects with the off than if they were on a pension. workin 15 hour stated aim of P p a a y ck m a e g n e t     r i e n l   e it a s s   e ‘ d w   e a l s f   a p r a e  r t t  o o   f w  t o h r e k   ’  But what happens for those who  a w  s e o e l k e     o p n a   r N en e t wstart wi g ll be $86  s p   e p r e   r  i a n s t s o isting  k peo s  ple  are able to work part time under  wor , a  r 2 Fr 0 o 05 m     f J e u d l e y r   a 2 l 0  b 0 u 6  d o g n et w .  ards,  the new regime? b P w e a e e r e n e k   n   t w w i o n o r g r   k s i P e n   a o g y f   f t m   h e t e h n   t a s . a n  m if e     t h he o y u   r h s  a o d  n  t w h o e rk r i e n w g  a a r r d e s       fo much poorer. applicants for Disability Support Financial cost Pension (DSP) will only be granted One way to assess the impact is to These differences will get worse the pension if they are able to compare the income of people on over time. This is because Newstart work less than 15 hours per Newstart who get part-time work, is indexed to the consumer price week, reduced from the current with those on DSP or PP who get index, whereas pensions are level of 30 hours per week. Those the same amount of work. Firstly, indexed to male total average who are ineligible for DSP will consider someone with a disability weekly earnings, which generally instead mainly go onto Newstart capable of working up to 20 hours increase faster than CPI. Over the Allowance, and be subject to a per week. After July 2006, some of last few years, for example, CPI part-time work test (if they are able these will be on DSP and others on has been around 2.5 per cent while to work between 16 and 30 hours NSA which has a lower base rate, wages have increased by 4 per cent per week). higher withdrawal rates and lower or more each year. tax rebates, which means that Changes to Parenting Payment (PP) people taking up work will get less Employment outcomes mean that new applicants from money in their pockets. The overall It is difficult to reconcile these July 2006 will be transferred to reduction in income by hours of effects with the stated aim of Newstart Allowance (NSA) when work is shown below in Figure 1. assisting people into work, as the their youngest child turns six and Someone working 15 hours per rewards for working are much become subject to a part-time work week on Newstart, for example, poorer. It may be that policy makers test of at least 15 hours per week. will be $93 per week worse off believe that the obligation to seek Current recipients will stay on PP than if they were on DSP working work on Newstart (contrasted with but will be required to seek work. the same hours. no requirements on DSP or PP) Another significant change is that the withdrawal rates for Newstart will also be amended from July 2006 to allow people to keep more of their earned income. Specifically, the 50 per cent taper rate will apply to income between $62 and $250 per fortnight (currently $62 to $142 pf); and the top taper rate will be reduced from 70 to 60 per cent and will apply to income above $250 per fortnight. Impact of changes What do these changes mean for the people involved? The government states that nobody currently on DSP or PP will be moved to NSA, since the changes apply to new applicants only. It also argues that the changes are intended to assist people to gain employment. At the same time, many analysts have pointed out

4  August 2005

$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Hours work per week Figure 1: Reduction in income per week for a single person with a disability undertaking up to 15 hours part-time work, on Newstart Allowance compared with Disability Support Pension

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will counteract the lower returns $100 from work and that the overall $90 impact will be greater emp   l b oyme p n u t t .     $80 However, no evidence has een forward to support this. Indeed, $70 s p i a n r c e e n  a ts b   o ar u e t    t al h r r e e a e- d qu e a it r h te e r r s     w of o   r s k o i l n e  g  $60 y or studying over a 12-month period, $50 it is hard to see a huge increase in $40 employment anyway. $30 Both sole parents and people with $20 ties erience considerable d m i a s t a e b r i i l a i l di   s e a x d p vantage at present,  $10 but these changes seem destined $0 to make this worse. The only 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 certain outcome from these Hours of work per week changes is that the government Figure 2: Reduction in income per week for a sole parent with two children will spend less money on social undertaking up to 15 hours part-time work, on Newstart Allowance compared with security payments, leaving the Parenting Payment government open to the charge that this was the primary intention. Stephen Ziguras [phone] [e-mail]

Recent submissions Submissions or statements made by • Submission to Treasurer John • Submission to the Senate Select the Brotherhood of St Laurence in Brumby on the development Committee on mental health, the last year include: of the Victorian Government’s April 2005 2005–06 Budget, December 2004 • Submission to the Productivity • Education and social inclusion , Commission inquiry into the • Submission to DIMIA on submission to the Victorian economic implications for an Australia’s Refugee and Special Government’s Review of ageing Australia, September 2004 Humanitarian Program Education and Training 2005–06, January 2005 Legislation, May 2005  Joint submission to Menta • l Health Community • Response to the DEWR • Submission to the Australian Consultations of Human discussion paper on Disability National Contact Point for Rights and Equal Opportunity Open Employment services, the OECD Guidelines for Commission and Mental Health February 2005 Multinational Enterprises Council of Australia, with concerning Global Solutions Catholic Social Services Victoria, • Response to Commonwealth of Limited (Australia) Pty Ltd, September 2004 Australia Joint Committee on  June 2005 Public Work re Maribyrnong • Response to Community Care Immigration Detention Centre – • Submission to the Joint Standing Division, Department of Human Additional accommodation and Committee on Migration inquiry Services, on the report, Protecting related works, (by Brotherhood into skills recognition, upgrading children: Ten priorities for of St Laurence as member of and licensing, June 2005. children’s wellbeing and safety in Justice for Asylum Seekers), Victoria , December 2004 February 2005

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