Disability Pensions in Australia: Where entering into a Relationship can be a Poverty Sentence

 

Dr Tristan Ewins

It is generally quite difficult to obtain a Disability Support Pension in Australia.  There are job capacity and impairment tests ; and many who are significantly impaired miss out.  But there is another problem that has been neglected in most debate.  Pensioners generally are assessed differently if they have a partner.  The consequence of this is that there is a perverse incentive for pensioners not to enter into a relationship or marry.  With the Disability support pension there can be a loss of income of around $200 a fortnight as a consequence of entering a relationship or getting married.  If the partner has a high income that is one thing, but many such couples could both be on low incomes or welfare.  Also: even if a person’s partner has a higher income, there is a problem with reinforcing dependence: with inhibiting the independence of Disability and other Pensioners.  When combined with other government measures: such as running a trial of the Indue Cashless Debit Card, or attempting to claw back money from the National Disability Insurance Scheme, it is clear we have a government which is trying to implement austerity aimed at the most vulnerable. 

The bottom line is that these arrangements condemn hundreds of thousands of disabled Australians to probable isolation and loneliness ; where they must fear the financial consequences of having relationships.

At the same time, Medicare is under attack.  Labor MP in Bendigo, Victoria, Lisa Chesters has observed how recent cuts to Medicare will “radically alter the cost of hundreds of orthopaedic, cardiac and general surgery items. “  As Chesters explained: “Patients now face the prospect of life-changing surgeries being cancelled at the last minute or being  landed with huge bills they didn’t expect.   And yet these matters have received very little attention in the mainstream media.

We need a Labor Opposition which defends Medicare and the National Disability Insurance Scheme. (NDIS)   But we also need a Labor opposition which goes beyond the strictly defensive ; and comes up with innovative and ground-breaking measures to extend the social wage and welfare state ; along with legislated wage increases for those on low incomes. 

This would inevitably involve tax reform. Ideally Labor should be aiming to reform progressive tax to the tune of 5% of GDP over 10 years, or at least three terms of Federal Government.  This would bring us closer to OECD average levels of tax and social expenditure.  Rolling back unfair means testing of pensions – including Disability Pensions - would empower hundreds of thousands of women and men with greater independence ; and if we are concerned about equity we need to reform tax in other areas for people with higher incomes.  It would also empower those people to enter into relationships without fear of destitution. Eligibility tests should also be relaxed so those incapable of full time work are not threatened with exclusion. 

The ‘LIFE’ (Living Incomes for Everyone) campaign is demanding a minimum $550 a week for all.  This would mean a great deal for job-seekers living in poverty, especially if combined with other measures like investment in public housing.  Effectively it would mean a guaranteed minimum income. (GMI)  Disability pensions specifically should increase further - by at least $150/fortnight in any case – rising to about $1100/fortnight.

No-one should be in the position of having to say they ‘cannot afford to enter into a relationship’.  The NDIS, despite its faults, was a big step forward for disabled Australians.  Instead of panicking over the cost we need to accept that providing services for these people meets what is perhaps the most defensible socialist principle: that each should contribute what they can, and receive what they need.  This principle needs to become a society-wide ‘common sense’ so that they are accepted even by many Conservatives ; as for instance occurred with the issue of Marriage Equality for those in the Queer communities.  But ironically there is no real ‘marriage equality’ for all if some need fear being thrown into poverty should they enter a relationship.

Progressives need to agitate to make this a real issue in the upcoming Federal Election.  The advocacy of Julia Gillard and Bill Shorten was crucial for the initial implementation of the NDIS.  The NDIS is not perfect, but is a vast improvement on the vacuum that existed beforehand.  Now we need additional policy champions within the ALP agitating to take the reform process further.  The Labor Aged-Care and Welfare Movement (LAWM) has adopted this as one of its objectives.  But we need more avowed Labor members to join our Facebook Group ; and to advocate for change.  Much as has happened with Rainbow Labor, Emily’s List, Labor for Refugees, and LEAN.  (Labor Environmental Action Network)  Currently LAWM exists at the level of Facebook ; but over the long term we want to achieve much more.  If you’re a Labor member and haven’t joined LAWM yet, pls do so.  And for Bill Shorten, Julia Gillard and others: Please take up this cause and make it an issue for the upcoming Federal Election.

Observations in the wake of the Rudd Restoration

Above: Gillard Leaves an Important Legacy and Lessons for Labor... 

Tristan Ewins

i) A Retrospective on the  Gillard Leadership

Much is to be treasured from the Gillard Leadership: and Rudd’s motives more complex than recognised by some Feminist critics

Recently I read an article claiming that the core issue behind Julia Gillard’s loss of the Labor leadership was a ‘boy’s club mentality’; that is put simply: patriarchy re-asserting itself…  (See:http://www.telegraph.co.uk/news/worldnews/australiaandthepacific/australia/10148541/The-boys-club-always-wins-in-politics-Julia-Gillard-is-the-latest-victim.html )

I think, though, that things are more complex than the author of that article acknowledges. I agree that Rudd took advantage of the ‘blue tie factor’ in response to the Gillard speech. Responding to male resentment following Gillard’s recent speech on the threat to women’s participation in public life, it was a clever ploy – underscoring impressions Gillard was being divisive, and appealing to a mass male demographic which felt threatened by Gillard’s stand.  I agree this was a form of destabilization – and even if effective, it was the [ethically] wrong ‘symbolic tactic’. And I agree there have been men – powerful right-wing men – who have subjected Gillard to constant mockery in order to weaken her authority and credibility – and sometimes in the most debased and sexist form.   And that sexism still comprises a problem in parts of the broader electorate as well.

But this was also personal vindication for Rudd in a way that goes way beyond gender… If Rudd had been ‘done in’ by another man his bitterness was have been just as palpable. Arguably, there was also bitterness in the 'Rudd camp' because it appears Rudd as PM was removed at the behest of Australia’s powerful mining industry – after he had attempted to introduce a Mining Super Profits Tax to spread the benefits of our mining boom… As I’ve said before – both ‘camps’ in Labor tried to set a precedent.  Each side attempted a ‘political scorched earth’ strategy against the other – and that only escalated the division and crisis. That an accommodation and reconciliation was not achieved earlier led us to this point – with the caucus elevating Rudd as their ‘only hope’ due to his consistent ascendancy in the polls.

Importantly – the monopoly mass media in this country (largely controlled by Rinehart, Murdoch etc) exploited the internal conflict to destabilise the ALP.  But now that Rudd has returned he is enjoying a ‘honeymoon’ courtesy of previous ‘oxygen’ he was provided by that very media establishment… But will the media continue to ‘give Labor a fair go’ now?  Some are talking of Rudd reforming the compromise mining tax we ended up with – But what chance of this with Rinehart dominating the traditionally (and still relatively) liberal Fairfax media assets?

IN the final analysis, though, Gillard deserves credit for pursuing education reform, implementing disability insurance, promoting a better deal for low paid workers (mainly women) in the community services sector and elsewhere, and improving diplomatic relations with China. Though there were bad policies too: Sole Parent Pensions reduced; Disability Pension eligibility narrowed etc… Recognition of all this is part of the answer for future healing in the ALP – for the same reason that the former Labor leaderships’ past attempts to ‘airbrush’ the Rudd governmentt’s prior achievements only escalated and deepened the internal conflict… And in any case Gillard DESERVES recognition for her policy achievements under the most difficult circumstances of minority government…

Here’s hoping Labor now has a chance of fending off the prospect of an Abbott Liberal Government – which could be the most right-wing government we have had in decades should it come to pass…

ii)  Conclusions: Last Chance for Rudd Policy Fixes as the Election Draws Near

above: Policy leadership necessary for Rudd now as the Election grows near

Superannuation Concessions Reform to pay for ETS reversions: and Tax Breaks to pay for wage cuts flowing from Superannuation Increases

To go early? Or go later and maybe reconvene parliament?

I believe it would just be good for Rudd to "get some reforms under his belt" before the election if possible; including restructuring the tax and spending mix in such a way as to pre-empt Abbott... (For example: if we remove superannuation concessions from the wealthy and the upper middle class to pay for winding back the carbon tax to an ETS...)  If we don't do this and Abbott wins - he can use fiscal pressures as a rationale to wind back social expenditure and welfare. So if possible we should get the reforms in place while taking away the Abbott excuse/rationale for austerity. Getting 'reforms under his belt' could also give Rudd more credibility - a concrete indicator of the direction he intends to take Labor should he win the election.

Not to mention we should have an interest in distributive justice for low and middle income Australia regardless of pragmatics. In 2012 Dr Richard Denniss of the Australia Institute argued that removing superannuation concessions from the top 5% would save over $10 billion.   (See: http://www.abc.net.au/worldtoday/content/2012/s3568235.htm )

Meanwhile, today that figure would be significantly higher: and targeting the top 10% demographic would presumably bring in much more.  

So not only could this money pay for an early reversion to an ETS. (which is a very regrettable political imperative)  The removal of subsidies/concessions for the wealthy and upper middle class could pay for an expansion of the Clean Energy Fund. And it could also pay for improved welfare - and make room for tax cuts for low income groups to overcome the effect of the increase to 12% superannuation contributions for these already-struggling families.   

To clarify on superannuation: veteran Fairfax journalist Ken Davidson made the point in 2010 that those on low incomes cannot afford to lose disposable income.  And he has pointed out that the extra employer contributions will largely be ‘swallowed up’ as bosses hold back on wage increases.  (see: http://www.theage.com.au/federal-politics/political-opinion/super-rise-no-blessing-for-workers-20100516-v6az.html )

Davidson is right that today the superannuation industry comprises a private pension system – where risk is privatised – and within a highly inegalitarian framework.  While the Aged Pension was once a great leveler – in the future retirement income will be greatly stratified and effectively discriminate against women, and low income, part-time and casual workers.  The Aged Pension itself faces potential future marginalisation as a second-class, residual system. 

And as Davidson notes there is growing pressure for governments to privatise their remaining assets by selling them to the superannuation funds.   This is presented as saving governments from the need to invest in future infrastructure. But what would the ultimate consequence be?

There remain potential problems, here, even where those funds are union-controlled.  There is the potential that they may increasingly comprise ‘corporate interests’ – which pursue their own particular interest rather than the general interest. 

As the important socialist thinker Eduard Bernstein pointed out as far back as the 1890s - as the “mistress of a whole branch of production” even unions theoretically have the potential to  become “a monopolist productive association…antagonistic to socialism and democracy…”  Here,  “Associations against the community are as little socialism as the oligarchic government of the state.” (Bernstein; pp 114-119, pp 138-141)    Of course there is a difference between Bernstein’s example here, and that of Australian unions – but the theme of general versus particular interest is the same. (the answer, of course, is natural public monopolies where appropriate)

Referring to the Superannuation Industry,  Ken Davidson wrote for the Sydney Morning Herald in 2012:

“Specifically, the superannuation industry has its eye on existing water, road, rail and port assets, which are largely monopolies with assured income streams. To reveal what is at stake, assume that, as state monopolies, these assets earn 5 per cent on capital for the government and would be expected to earn 10 per cent on capital for private investors… This means that the assets worth $100 billion on the government's books, would only be worth $50 billion to the private operators if the prices for the services remained the same. The government might get $100 billion for the assets if it allowed the new owners to double prices for the services.”  (Read more: http://www.smh.com.au/federal-politics/political-opinion/its-about-time-super-funds-stepped-up-20120729-235y4.html#ixzz2YFLdAnnr )

It is too late to substantially alter Labor’s 12% superannuation promise, and too difficult to sell Davidson’s complex message to the electorate on the eve of the election.   Especially when Labor has been selling this policy unequivocally for so long, and many of our supporters are convinced it is ‘free money’.

But the government has options in creating a more egalitarian system. 

Again this should involve cutting superannuation concessions for the wealthy and the upper middle class – which could bring in well over $10 billion. (I have no modeling beyond Richard Denniss’s figures ** – but extrapolating from that a minimum of $15 billion seems credible for 2014)  And using some of those proceeds, in addition to paying for an early reversion to an Emissions Trading Scheme, and an increased Clean Energy fund - it must also mean further restructuring of the tax mix.  Further, it should also involve easing of means tests for some partial self-funded retirees.  And what is more, this could involve another real increase in the Aged Pension, and improvements in social wage benefits for pensioners of all kinds. This should include improved cost-of-living subsidies (energy, water), and free or discounted access to the NBN and public transport.  Finally, here, the funds released by superannuation concession reform could be ploughed into infrastructure and completely bypass pressures for privatisation.

Concluding, though, the most industrially strong unions could attempt to hold onto their share (ie: the labour share) of the economic pie – even in the context of increasing superannuation contributions from employers - but also in the hope that this could occur in the context of a squeeze on profits, rather than a squeeze on consumers.  Whether or not this happens also depends on how profitable and how competitive the economic sectors in question are. Competitve sectors with lower profit margins would have little room to move.

The election is far from over; and neither are Labor’s policy options exhausted even at this late point in the electoral cycle.   Let us hope Rudd Labor governs and reforms in the interest of justice and equity for most of what remains of 2013 – and that the consequence is another reforming Labor government.

References:

Allison Pearson from ‘The Telegraph”

http://www.telegraph.co.uk/news/worldnews/australiaandthepacific/australia/10148541/The-boys-club-always-wins-in-politics-Julia-Gillard-is-the-latest-victim.html

Bernstein, Eduard  “Evolutionary Socialism”, Shocken Books, NewYork, 1961

Ken Davidson at ‘The Age’ and the SMH::

http://www.theage.com.au/federal-politics/political-opinion/super-rise-no-blessing-for-workers-20100516-v6az.html )

http://www.smh.com.au/federal-politics/political-opinion/its-about-time-super-funds-stepped-up-20120729-235y4.html#ixzz2YFLdAnnr )

** Denniss argues removing superannuation concessions from the top 5% income demographic alone could bring in $10 billion in 2012; For my purposes I am assuming the top 10% should be targeted in the reforms I am suggesting.

Responding to Simon Crean on ALP unity and Government Policy

above: Victorian Labor MP, Simon Crean

Today veteran Labor MP Simon Crean helped facilitate a spill of the Labor leadership once yet again.  Without the numbers, and with Rudd refusing to contest the spill, Gillard was re-elected unopposed.   But Crean has raised issues that are crucial for the Party as the May Budget approaches.  Unfortunately, the author, Tristan Ewins, finds he cannot agree with Crean when it comes to reform of superannuation concessions and other fiscal reforms which might well be necessary to pay for NDIS and Gonski. 

(initiatives that will ultimately cost over $20 billion a year in the context of a $1.4 Trillion economy)

(nb: Also I have corrected a rather large typo as well!!!; So apologies to anyone who may have been shocked by the apparent argument I supported infrastructure privatisation!  Rest assured that is NOT the case!  I did not catch the typo until after I rushed to publish with the events unfolding rapidly around us...)

By Tristan Ewins

Today in a media interview Simon Crean put a strong argument against the constant destabilisation process going on within the Federal Parliamentary Labor Party.  As he argued, the prospect of an Abbott government is frankly “scary”.   The tens of billions in cuts Abbott would follow through with would result in unprecedented damage to Australia’s welfare state and social wage.   The stratification of our education system would continue apace to the point where constructing a constituency for revivifying the state sector would pose a very difficult challenge.  Punitive labour conscription policies for the unemployed.  would acquire previously unthinkable dimensions.  Finally, Paid Parental Leave under Abbott would be skewed towards the truly wealthy at a time when the entitlements of poorer Australians are under attack.   One way or another the ‘leadership question’ needs to be permanently resolved ahead of the May Budget.  Labor needs a progressive Budget the whole Party can unite around in May.

A few hours, however, it seems are a long time in politics!  Just moments ago there was a spill for the Labor leadership positions. Crean had been instrumental in bringing the spill about – but without Rudd contesting it, Gillard was re-elected party leader unopposed.

From this Labor activist’s position there are two crucial issues.

One – is that the leadership speculation and destabilisation must be ended finally and categorically.

Secondly, Labor must remain on the policy front foot – and not step away from its commitments to Gonski and NDIS. 

IN that context two questions raised by Simon Crean still remain problematic for this Labor Party activist.  Those questions concern infrastructure privatisation and treatment of superannuation concessions.  I am hoping that the options of removing superannuation concessions on the one hand; and of maintaining public infrastructure on the other - have not been sacrificed.  The consequence of forsaking reform of superannuation concessions in particular could potentially mean there would be insufficient funding for NDIS and Gonski….

Infrastructure privatisation?

Beginning with the matter of infrastructure privatisation: Simon Crean raised the issue of employing Superannuation funds to pay for basic infrastructure.  While this is far preferable to the kind of privatisation preferred by the Conservatives, superannuation funds would also seek maximum return for their investors.   Certain union-dominated superannuation funds might benefit, it is true: but potentially at the expense of the public more broadly in their capacity as consumers.

Also even the most robust superannuation funds will not achieve the credit rating of the Federal Government. 

In short, superannuation investment in infrastructure would be great for the superannuation funds, but an inferior deal for consumers and taxpayers. When it comes to infrastructure: roads, public transport, water and energy infrastructure etc – public sector investment still delivers a ‘better deal’.   It can raise funds more efficiently, and it can run on a ‘not for profit’ footing. 

Preferably infrastructure user tolls of any kind should be avoided – as usually tolls take a form approximating regressive flat taxation.   Servicing public debt sustainably over the long term would deliver the fairest outcomes;  but progressively-structured  taxes may have to rise as consequence.

Reforming the tax mix is a better option – and as we will soon argue there are a number of progressive options available.   But if tolls are introduced in any way, they should take the form of tolls on public owned infrastructure – as occurred for a period with the Westgate Bridge in Melbourne and the Sydney Harbour Bridge.   That is: they should comprise temporary measures, without the drawbacks of privatisation.   And if they are applied at all, they can potentially resemble progressive taxation with a ‘tiered system’ for public and commercial use, and for individuals and families in particular income brackets. Indeed, such a system could form part of a ‘quid pro quo’ between the Federal Government and the States. It would assist the Federal Government in freeing funds for Gonski and NDIS while at the same time maintaining a progressively structured model of infrastructure finance.

Superannuation Taxation?

The other potential ‘bogey’ Simon Crean raised was that of "taxes" on superannuation.  (a misnomer because the concessions comprise tax relief rather than taxes in of themselves) 

Admittedly it is true that a fear campaign has already begun on the theme of superannuation concessions.  The upper middle class is concerned their retirement lifestyle may be threatened; and while many struggle to make do on the Aged Pension alone, the upper middle class see an annual retirement income of over $50,000/year as a ‘right.’   A recent segment in the 7:30 Report presented the matter in a most unbalanced fashion. 

But is the theme of social class helpful for Labor?  Or is it a source of division, and hence electoral marginalisation?  And what does class conciliation really mean in a context where employers are opposing minimum wage increases, attempting to wind back penalty rates, and trying to prevent labour organisation?  Does it mean anything in the real world, or is it just an Ideology behind which social democracy has self-liquidated?

Already in another recent article we have noted that superannuation concessions have risen to prominence as a massive instrument for tax avoidance by the very wealthy – at the same time as user-pays mechanisms for the most basic infrastructure are being considered.  Specifically, superannuation concessions are currently around $30 billion, and will cost $45 billion perhaps as early as 2015.  And the top 5% income demographic alone is already receiving over $10 billion of those existing concessions. 

In that same article we also observed that – by comparison – then entire Aged Pension Budget was only $25 billion in 2012. 

This is more than ‘middle class welfare’. It is ‘upper middle class welfare’, and a subsidy for the wealthiest of all – the top 5 per cent – effectively paid for by everyone else. Despite Ideologies of class conciliation, distributive injustice is a glaring reality – which we must choose whether or not to facilitate and excuse – or whether to work for a more socially just alternative.  Tax avoidance and tax minimisation from the wealthy impacts upon the welfare and social services we all depend upon in Health, Aged Care, Transport, Welfare and so on.

In that same article this author demonstrated that by halving Dividend Imputation the government could bring in over $10 billion, and by removing superannuation concessions for the top 10 per cent income demographic Labor might recoup as much as $25 billion altogether. 

And elsewhere the Greens had argued that raising the Minerals Resource Rent Tax (MRRT) rate to 40 per cent, eliminating loopholes and removing “generous accelerate depreciation provisions” could raise $26 billion our four years. 

Finally,  based on statistics used by “Crikey’ last year, increasing Company Tax by one per cent could potentially bring in an additional $1.5 billion a year.  That kind of money could prove very useful come September if ploughed into Aged Care or mental health, for instance. It is about time to draw a line under decades of corporate tax cuts.  For decades now a regime of ‘corporate welfare’ has taken root, with lower taxation for Companies and wealthy private investors – at the same time as government struggles to pay for basic infrastructure and education expenses – which the corporate sector shares the benefits of.

The Bottom Line

The bottom line is as follows. 

Federal and State Governments are facing a ‘legitimation crisis’ stemming from their inability to pay for basic infrastructure, and their plans to revert to user-pays mechanisms on the understanding that real progressive tax reform is ‘unspeakable’.

And Labor is in a bind in so far as it is not yet proposing a concrete, fair and sustainable way of financing Gonski and NDIS -  policies which it is committed to and on which Labor’s credibility rests.

But if Labor implements reforms rapidly following the May Budget; and can establish that tax measures are aimed squarely at the upper middle class and the wealthiest of all – It can demonstrate that state-financed infrastructure, as well as Gonski, NDIS and Aged Care insurance are in the interests of the vast majority.  (Though arguably NDIS should involve a more broadly-based levy in addition – to establish the principle of ‘social insurance’.  A ‘mixed’ funding mechanism could also bring in additional revenue for Aged  Care – where user pays mechanisms and the often poor quality of care are a national disgrace.)

On the other hand, if the media is still speculating on the form of tax reform and superannuation reform by September, the uncertainty and fear mongering could be damaging. It was protracted speculation which left a lasting negative impression with regards the Carbon Tax even after implementation should have put paid to the fear campaign.

But even if superannuation concessions were revoked and that revocation locked in’ for only the top 5% income demographic – It would still yield a pool of over $10 billion.  And the modest measure of implementing 75% dividend imputation would yield over $5 billion.  Taken together, those measures would comprise a very good starting-point from which to fund NDIS and Gonski, even though further initiatives are also desperately necessary to fund far-reaching reform of Aged Care. 

The Greens’ proposals for reform of the Minerals Resource Rent Tax (MRRT) – bringing in about $6.5 billion a year - could be enough to provide for a strong suite of policies for Aged Care reform – including  removal of user-pays mechanisms for poor and working class families, and improvement in areas such as staffing, diversity and quality of environment, privacy, facilitated social interaction and so on.  Another option would be to establish National Aged Care Insurance with a Medicare-style levy – but with progressive tiers.

‘Middle Class welfare’?

Finally, there is the prospect of freeing funds through the further curtailment of ‘middle class welfare’.   Adam Creighton over at ‘The Punch’   has argued that “More than 11 per cent of households in the top 20 per cent of the income distribution – with incomes above $115,000 – receive some form of welfare payment from Canberra…”   He argues further that: “Family Tax Benefit B, which is paid to households with incomes up to around $175,000 a year, is the main culprit.” 

To elaborate: According to “The Australian’ “NATSEM's* modeling shows that removing [Family Tax Benefit B] from families with combined taxable incomes of $100,000 onwards would save about $500 million a year. “  That money could be employed to reverse the callous government policies for Sole Parents, with hundreds of millions to spare.

Further means testing could also apply to the Private Health Insurance Rebate, removing it entirely from singles in the $97,001-$130,000/year bracket and for families in the $194,001$-260,000/year bracket.  At an estimate, this could bring in additional hundreds of millions every year.

But it is VERY notable that these measures pale in comparison with what could be saved from more ambitious reforms of superannuation concessions for the wealthy,  and a partial curtailment of Dividend Imputation.” 

And over-targeting of welfare has the potential to narrow the demographic support base of the welfare state over time.  More broadly, there needs to be a balance between means testing of welfare, and the principle of universalism - for instance as embodied in Medicare.

Conclusion

When Labor’s credibility depends on the sustainable funding of Gonski and NDIS it simply doesn’t make sense to rule out two of the most effective and progressive means of paying for those programs. And Labor cannot afford more of the callous austerity that cost the government deeply in terms of a popular backlash against cuts to Sole Parents. Reform of superannuation concessions MUST stand; and reform of Dividend Imputation must also remain an option in providing the necessary funds for those programs. 

·         NATSEM = “the National Centre for Social and Economic Modelling

Rhetoric and Reality - Labor must stand up for Sole Parents

above: A photo of the author, Denise Allen

In this latest 'ALP Socialist Left Forum' article former Labor MP Denise Allen takes the Federal Government to task for its Sole Parents decision - but applauds Julia Gillard's stand against Abbott. Cuts in the Sole Parents Pension will mean much hardship for our most vulnerable families.

Left-leaning people interested in progressive debate are also welcome to take part in our'ALP Socialist Left Forum' Facebook group - where among other things we promote new posts at the blog, and debate important social themes and issues of the day.   

See: http://www.facebook.com/groups/102658893193637/?fref=ts

by Denise Allen, October 2012

Some days the Prime Minister and the Labor Party make you so damn proud you want to shout it from the rooftops.

Last week for example, when our strong and inspiring Prime Minister ripped Tony Abbott a new one and called him out for the sexist bully he is.

It was a day all Australians, regardless of whether you like or support the PM or not – a moment in political history – no one will forget in a hurry.

It makes so many of us Labor supporters proud when the Prime Minister announces new wide sweeping progressive reforms like the NDIS, Carbon Pricing, Aged Care reform and the Gonski Report. Progressive Labor Party reforms akin to the Whitlam Governments Medicare and University reforms.

But on that very same day last week, without very much fanfare, the Labor Party passed – with the help of the Coalition – a continuation of a Howard Governments policy to reduce the income of single parents. 

This Single Parent Pensions Bill is one of the most regressive policy platforms ever introduced by a Labor Government.

This bill, by reverting the Single Parent Payment to Newstart allowance once the youngest child turns 8, reduces the income support of a single parent by up to $100 per week, in some cases more.

That said – it is a slight improvement on the similar policy the Howard Government introduced in 2005 and effective July 1 2006 whereby Supporting Parent payments reduced to Newstart allowance when the youngest child turned 6!

It is designed to coerce single parents back into the workforce.

Now I fully understand that there are many single parents in our society who do not attempt in any way to seek work regardless of the age of their children. But these people – both women and men – are in the minority.

Some are relatively uneducated, have very poor social and employment skills and even if they did have reasonable skills, many live in rural areas where employment vacancies are almost non-existent.

On the other hand, there are many single parents living in the city where rents are exorbitant; transport costs; after-school care costs are an added financial burden.

Taking away up to $100 per week, reduces a single parent’s ability to seek work or re-training and to function as a healthy, happy parent.

The stress that is going to be added to their daily struggle is going to be enormous.

I believe there should be “carrot” not “sticks” to encourage single parents into the work force.

Encouragement should be given to single parents to gain skills by returning to school, through our TAFE system (although now the Bailleau/O’Farrell/Newman Governments have slashed funding to TAFE’s that is going to be so much harder as well) or to enroll in a University.

How a single parent will be able to afford to do that now their income will be reduced by up to $100 per week is questionable – (especially given the funding slashes to TAFE’s).

How will someone without a car manage?

How will someone without extended family support manage?

How will someone who already pays exorbitant rent manage?

What if they can’t get a job for months/years on end no matter how hard they try?

Were these questions even considered when this legislation was being considered?

Whose idea was this to crucify struggling single parents even further?

If the Government is so desperate to find an extra $700m per four years why then didn’t they have the courage to finally attack the rort that is negative gearing, a wealth creation system for wealthy people?

It is true that some people only understand money as a motivation to do anything.

But instead of taking money away from single parents that they use for their everyday living costs, why not offer incentives akin to the baby bonus?  If Governments can offer a baby bonus handout and provide extremely wealthy private schools with huge publicly funded handouts, why can’t they come up with a policy that is more “carrot” and less “stick”; where single parents are encouraged to succeed, not threatened and deprived of vital dollars with which to raise their children on a daily basis.

Those who will scream the loudest about “lazy single parents” are the very same people who will still put their hand out for every subsidy at every opportunity. I have never seen or heard of anyone saying “No thanks, I don’t need the baby bonus” or a wealthy private school say “No thanks, we don’t need taxpayers money to build new a rowing course or swimming pool”…. “let the Government keep it for other more worthy causes.”

I expect this sort of policy from Conservative Governments as it is par for the course for them but not from a Labor Government.

A very wise person once told me that “Governments, in the race to be the ‘best economic manager’ make decisions from a economic rationalist point of view, and in doing so loose all humanity and compassion.  Saying they are “good economic managers” is rhetoric Governments of both persuasions bang on about all the time. The real challenge in being a good economic manager is implementing socially responsible policy that is passionate and well managed.”

This is not socially responsible policy.

It is cruel, heartless, regressive policy that will put many single parents further under the poverty line.

I want to see policy that will assist and inspire single parents to aspire to better opportunities.

This does not do that.

I would expect it of Conservatives but not the ALP.

(As an aside – I am yet to hear Tony Abbott give a commitment in blood to wind back this policy. Seems as far as Mr. Abbott is concerned, it is an outrage to tax multi-billion dollar mining oligarchs and put a price on big polluters spewing filthy toxic waste into our atmosphere, but its ok to reduce the income of some of the poorest, most struggling people in our society.)

Denise Allen
Political/Social Commentator
Political Strategist
Disability Advocate
Former Vic State MP for Benalla
http://denniallen.wordpress.com