Are we building an entrenched underclass of poverty and disadvantage in Australia?

Are we building an entrenched underclass of poverty and disadvantage in Australia?

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The tone of proposed welfare reform has already been set and tends to classify those Australians in need as an unwelcome burden.  We only need to consider how they were framed by Treasurer Hockey’s comment of “lifters and leaners’’ – rather than real citizens facing significant challenges. The slogan ‘lifters, not leaners’ has come under strong criticism (see

Buried on page 162 of the Federal Government’s Interim Report of the Reference Group on Welfare Reform to the Minister for Social Services is a graph, which shows the number of working-age Australians receiving some form of income support over the past 20 years.

It shows the percentage receiving income support peaking in 1997 at 24.9 per cent, before falling to 16.6 per cent in 2008.  The figure climbed back above 17 per cent following the Global Financial Crisis, before falling to the current 16.7 per cent.

So in just under twenty years the percentage of working-age Australians on welfare has dropped by about one third. The improvement largely reflects various quite successful welfare-to-work programs instituted over the years and the tightening of eligibility criteria by successive governments.  This does not reflect a welfare crisis.

There are presently about 20 different forms of income support payments and 55 supplementary payments; there is good reason to argue the system needs to be streamlined.

Careful scrutiny will need to be given to:

  • the risks of further entrenching the disadvantage faced by the most vulnerable in Australia, and
  • adopting a model that homogenises the often complex needs faced by some people

Abbott’s track record does not indicate much hope for equitable outcomes; just look at the the changes proposed for young unemployed people who face up to six months with absolutely zero benefits.

The plan to shift tens of thousands of people from the Disability Support Pension unless they can demonstrate a permanent incapacity; this is a major worry when the Social Services Minister cannot even define what it means.  Currently, around 45% of DSP recipients in Australia live below the poverty line, which is about twice the average for OECD nations.

The report suggests that there needs to be a focus on improving and enhancing transition pathways for disadvantaged job seekers, including young people. This is a positive, especially if you are going to strip them of DSP payments or other allowances.  However, the sentiments are hollow when specialised services aimed at training and job placement for at-risk young people are facing the chop.

“Consideration should be given,’’ the report says, “to incorporating income management as part of a package of support services available to job seekers who need to stabilise their circumstances and develop a pathway to work or study.’’  This is social engineering from a government that shouts the values of independence and derides the influence of the nanny state. It is unlikely to help build self-esteem and confidence for vulnerable young people.

We appear committed to building an entrenched underclass of poverty and disadvantage, in a country that has one of the best performing economies in the world.

Stephen Hall
Stephen Hall
Lives in Perth, Western Australia.

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