Bare bones budget for jobseekers


The bottom line (red) shows the unemployment benefit – flat-lining since 1993 apart from the Covid stimulus and the token Budget increase. Chart from ACOSS in 2023 dollars

Just as well the Commonwealth Government Budget wasn’t tabled last week – that would have been too much of a mixed message.

A nation’s budget is all about redistribution of wealth, a concept worth keeping in mind at a time when £100 million of British taxpayers’ money was spent on an unnecessary coronation pageant.

As has been repeatedly pointed out, Prince Charles became King by default on September 8, 2022, on the death of his mother, Queen Elizabeth II. There was no pressing reason to stage a mediaeval pageant, however splendidly well done.

This week, the media’s attention swung back to the King’s southern hemisphere colony, as Treasurer Jim Chalmer presented his budget.

So much had been flagged already that one does have to question is there a critical reason for the media embargo till 7.30pm on Tuesday.

As I started writing this on Tuesday morning, much of the Budget’s headline measures had already been revealed. This included a $15 billion spend on cost-of-living relief; $1.5 billion of it in electricity bill relief for 5.5 million households and 1 million small businesses. I should point out that this is from an ABC article published on Tuesday morning. The ABC’s business reporters Ian Verrender and Gareth Hutchens were all over it.

One of the other measures flagged earlier aimed to change the dispensing rules at pharmacies. Australians will be able to buy two months’ worth of medicines on a single prescription, with the change affecting more than 300 common medicines. This overrides the current rule that only 30 days’ supply of medicine can be applied to one prescription.

The ABC and other media outlets also seemed confident, ahead of the Budget, that Chalmers would produce a surplus and indeed he did. You can’t please everyone, though. Greens leader Adam Bandt said the government had prioritised delivering a ($4.5 billion) surplus over supporting people in poverty.

“Labor’s second budget is a betrayal of people who were promised that no one would be left behind,” he said in a tweet on social media.

Other leaked or pre-announced budget measures included cheaper child care and a (long overdue) pay rise for aged care workers. Welfare recipients received higher payments, but nowhere near the level asked for by lobbyists.

The Budget is a document which sets out how taxes paid by Australian businesses and individuals will be spent. It is a massive number, equating to 29% of GDP. In 2021-2022, $683 billion was raised in taxes across all levels of government. This was 15.2% higher than the previous year. A table prepared by the Australian Bureau of Statistics shows an upward trajectory for taxation revenue. The slight blip in 2019-2020 was due to disruption to employment by the onset of Covid-19 and its attendant lockdowns. Total tax revenue includes all Commonwealth, State and Territory taxes, GST, those indirect taxes that still exist and excises imposed on alcohol, tobacco and fuel.

The cost-of-living package is one thing, but the government has been under enormous pressure to raise the level of unemployment benefit. The Australian Council of Social Service (ACOSS) last month presented a detailed brief to Treasurer Jim Chalmers. A former Commonwealth Treasury head, Ken Henry, appeared on television as the ACOSS brief’s anointed spokesman. In a call to raise the level of NewStart and Youth Allowance, ACOSS said some 750,000 people in communities across Australia live on unemployment and student payments that do not cover the cost of housing, food, transport and healthcare.

The single rate of Newstart is (or was) less than $40 per day and living on Newstart and Youth Allowance presents the biggest risk to living in poverty. ACOSS wanted the rate raised to within 90% of the aged pension, so were almost certain to be disappointed.

In an open letter to the Prime Minister, ACOSS said 80% of people receiving JobSeeker payments have been receiving the benefit for more than 12 months. The same research found that seven in ten people on income support were eating less or reporting difficulty getting medicine or care. In December 2022, Anglicare found that there were 15 Jobseekers competing for each entry-level role.

“The longer people remain on income support, the harder it is to transition back into paid work,” the letter said.

ACOSS chief executive officer, Dr Cassandra Goldie, said post-Budget that while the $20 per week pay rise was welcome, it did not go far enough.

“The (increase) to JobSeeker and related payments is well below the Economic Inclusion Advisory Committee’s findings. The committee said that it needs to rise by at least $128 a week to ensure people can cover the basics.”

ACOSS and others are right to complain. Australia has the lowest rate of unemployment payment in the OECD. One in four people on Newstart have only a partial capacity to work because of illness or disability.

The ABC’s business reporter Gareth Hutchens wrote an intriguing analysis in May 2021 about the ‘full employment’ policies of governments prior to the 1970s. Then followed a policy aimed at creating a permanent pool of unemployed as a means of promoting economic growth and making Australia more globally competitive. Along with rising unemployment came a political ploy to blame the victim. The term ‘dole bludger’ emerged, first used by Liberal MP Bert Kelly, a pioneer of “New Right” political ideas. But the phrase was also promoted by Clyde Cameron, minister for labour in Gough Whitlam’s Labor government (1972-1975).

As unemployment soared in the mid-1970s, being without a job was recast as the fault of workers for being ‘too lazy’. There was much debate about the need for ‘overly generous’ income support. (Anyone who has ever been on it would dispute its  ‘overgenerosity’. Ed)

Policymakers from the early 1980s started using an unemployment rate of 5% as a deliberate policy tool.

“How could everyone be expected to find a job,” Hutchens wrote. “There haven’t been enough jobs to go around, by design.”

Now, almost 50 years later, the long-term unemployed are still being victimised over a deliberate policy to keep them out of work.

If I may hark back to a FOMM from 2018 when we speculated about what one could do were one made King for a Day:

King Bob decreed: “I’d single out the dysfunctional tax and welfare systems and propose the following reforms:

Introduction of a universal basic income for all adults: $25k a year, indexed, no strings attached. Adults are free to earn money over and above the $25k but will be taxed on a sliding scale to the maximum rate for anyone earning more than, say, $100k.

In my Kingdom, all forms of social welfare would be replaced by a new regime, overseen by the Office of Financial and Social Opportunity and Incentivisation (NOOFASOI). The office would oversee payment of the UBI and iron out the inevitable wrinkles in a new and untested system.”

In the real world, countries as diverse as Finland, France, Ireland, Norway, the US, Canada, New Zealand, Holland, Iceland, India and Brazil are either talking about a UBI or trialling it in one form or another. In 2016, the Parliament of Australia published this comprehensive yet concise policy paper by Don Henry, for those who want to find out more.

While I leave you to make of that what you will, I’ll be delving into the 997-page Budget, seeing what’s in it for me. As we all do.

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