Rachel Siewert’s recent  ‘social experiment’ – pretending to live on Newstart payments – for a week is little more than a cheap political stunt that demonstrates her own naïveté and ignorance as much as it does that of the wider public. One would have thought that Australians did not need the simple truth of Australian welfare leaving workers in a parlous situation rammed down their throats in such a crude manner. Yet, as if to prove me wrong, AMP yesterday released a report saying that we’ve never had it better.

“How can it be that we’ve had 20 years of uninterrupted economic prosperity with very low inflation yet the cost of living remains a hot topic?”

From the report it would seem that the worsening financial situation of part of the population is okay because a) they’re poor, b) it is necessary for the economy to function with inequality and unemployment and c) they probably brought it upon themselves anyway.

Ostensibly, an attempt to point out the deficiencies of Australia’s welfare programme should be welcomed. However, I fail to see what Senator Siewert could have learned from her ‘experiment’ that could not have been learned through basic research and enquiry: frankly, her time and effort would have been more wisely invested in consulting with those in the situation she was trying to imitate.

Even the emotional impact would have been but a shadow of the reality: the Fairfax article covering the Senator’s ‘experiment’ begins by mentioning that the strict budget would not permit her to buy toothpaste if she ran out midweek and later mentions her apprehension about car troubles given that “the $12 in her wallet would not cover a new battery let alone a tow truck.” I find it hard to believe that someone on a base salary of $185,000 a year[PDF] would experience the same dread and cold-sweat panic that comes when you think that you won’t have enough money for the items being bagged and that you don’t have any other money to call on.

Senator Siewert could not have been more accurate when she declared her experience “would only scratch the surface of what jobseekers on Newstart have to go through” given that she continued to live in her “four-bedroom, two-bathroom house” rather than the one room apartment that she had budgeted for. Maybe the Senator didn’t have a sufficient credit rating, appropriate referees or enough money to pay the bond. It is also worth pointing out that, according to the ABC, 60% of Newstart recipients remain on payments for over 12 months, lowering to 20% after five years. One week is not long enough to experience the full mental and physical effects of being forced to live day-to-day.

It would be hard for such an ‘experiment’ to be completely useless and Senator Siewert does raise some valuable points, particularly on budgeting for a proper diet. In the ABC’s The Drum:

“Eating well on Newstart was impossible, even for a vegetarian. I ran out of vegetables on day five, and by the last day was down to eggs on toast for dinner.”

Amongst the several dangers of prepared meals and fast food are their cheapness. For those who are unused to having to budget strictly or who do not have fantastic cooking skills it may seem more economic and easier to just buy a prepared meal from the local butcher or get takeaway; there’s a reason students are renowned for living on Ramen noodles and EasyMac. It is also difficult when trying to cater for people with fussy eating habits: anyone who has cooked for a man over the age of 40 who has ever described salad as “rabbit food” or generally regards it with suspicion knows that, up until their first heart attack, most efforts to change their diets are futile. Considering a leg of lamb might cost $40 and even chicken breast can be up around $10-12 per kilo, sausages and products made from mechanically separated meat may be the only viable choice. With this in mind I find AMP’s inclusion of prepared meals in the ‘luxury item’ category unfair and quite disingenuous.

AMP’s report also includes tobacco and alcohol in the ‘luxury’ category and I was quite surprised to see no mention of either in the media surrounding Senator Siewert’s ‘experiment’. One might judge smokers and drinkers for lacking personal and moral integrity but this glosses over the fact that both tobacco and alcohol are addictive and that both can and are used as coping mechanisms. Obviously both are self-destructive habits and people who find themselves relying on either need to be given assistance but addiction is not something guaranteed to be solved by quitting cold turkey. In any case, having a go at someone for squandering their pittance on an addiction is rather pointless.

I also notice that Senator Siewert did not mention the process of applying for Newstart, the requirements of receiving payments or the impact of means-testing on her final payment level. Though Youth Allowance and Newstart are administered differently I would be surprised if Newstart recipients were not also subjected to the same level of invasive scrutiny as Youth Allowance recipients that results in swingeing cuts in the final payment level, being instructed by Centrelink staff to end relationships, liquidate and disburse any assets and to increase expenditure so that the Commonwealth can see that you are in need. I would also have been interested to learn of the impact of Centrelink on the suicide rate of Newstart recipients and applicants given their appalling treatment of ‘customers’.

Finally, I am curious about the Greens’ call for a $50 per week raise in Newstart. A report conducted by The Australia Institute suggested that Australians consider $454 per week ($65 per day) to be the amount necessary to support a single adult and that unemployed people should get $329 per week ($47 per day). If the Greens were successful in their bid to up Newstart, recipients would still be receiving $60 per week less than the population thinks they should – nearly $200 less than the amount needed to support a single adult. I do not know whether the Greens and ACOSS chose this number because it would be more palatable with the electorate but in any case it is still insufficient.

The harshest criticism must go to Wayne Swan for refusing to grant the rise in order that Australia might post a minor surplus at the end of next financial year and to Jenny Macklin for continuing with plans to quarantine welfare in low socio-economic areas after July this year, thus normalising and spreading the unjust discrimination and moral judgement that drives the Northern Territory Intervention.

9 thoughts on “Newstart and the Inadequacies of Australian Welfare

  1. Maybe by giving people less per week than they can “survive on” would encourage said people claiming the welfare to actually try to support themselves? What is the point in encouraging people that it’s okay to live on free money that other working Australians have earned and paid in tax?

    1. Well, two things.

      The notion that welfare recipients, especially Newstart recipients, are claiming ‘free money’ from the taxpayers rather overlooks their tax contributions paid while employed. The 1000 people who lost their jobs at First Fleet and all those threatened by cuts announced by Mr. Baillieu in the last week would all have paid some level of tax. Also, given that there are roughly 11m workers in Australia and that, thanks to indirect taxation (such as the GST), even children and pensioners pay tax at some level the whole ‘have to pay taxes to earn citizenship rights’ argument falls short.

      Also, if all 11m workers pay tax it would cost them individually a bit over 0.115 cents to fund a person on Newstart, for a year. For all ~344k people who received payments for a year (remembering that not all do) this ups to about $306/year. Of course with graded tax, indirect taxation, etc. it’s unlikely that the average person would be slugged that complete amount.

      But in any case, your response relies on the moral judgement of welfare recipients as the ‘undeserving poor’ – something I disagree with very strongly. Operating with the basic assumption that welfare recipients are somehow cheating their way to money or are too lazy/feckless to both getting a job if they receive welfare is tosh. When the Great Depression hit Australia workers were subjected to the same moral snobbery and suffered for it: the suffering workers experienced then directly inspired the ALP during the 1940s to introduce institutional welfare, to ensure people wouldn’t have to live through it again.

      Apart from anything else, I wonder how it’s possible to get people back into a position of moving off welfare if the payments are so low that it starts them on a downward spiral. I suggest reading this: http://wa.greens.org.au/content/day-4-rachel-visits-glenda

      1. Yes it does overlook tax contributions while employed but how is that fair to those who never take welfare? Also, you cannot start to do calculations on who pays what in order to facilitate the payments without a basis for comparison.

        I was not saying that the payments are for the ‘undeserved poor’, I was merely commenting on the fact that there are plenty of people who abuse the system. Perhaps I didn’t make it clear that I’m talking about “Dole bludgers”. The system should be set so that it can support people for a reasonable period of time for legitimate reasons only.

        On your last comment- the easiest way for people to get back into a position of moving off welfare is to find a job 🙂 I know this may not always be a simple exercise, particularly for those with few skills or qualifications, but that should be a priority of legislation as addressed in hugh’s comment below. I wholeheartedly agree with hugh’s comment, particularly his last statement.

        P.S. Looks like Swanny agrees with me too.

  2. I read the Rachel visits Glenda article. Apart from not being able to afford a nice job interview outfit, the other main barrier to finding employment seems to be her lack of relevant training. Maybe there need to be a greater focus on financing education and re-training or making newstart payments conditional on that kind of thing, at least after having looked for work for a while.

    You call out johnny on the ‘lazy cheats’ branding of welfare recipients, but I think the burden is on the recipients and their sympathisers to prove why they need their living expenses covered and why other apparently feasible solutions (such as Glenda moving into cheaper housing) wouldn’t work.

    For the first fleet workers, I’d be interested to know their current standard of living. They may be facing a difficult few weeks or months with a reduced income, but this may be exacerbated by having lived beyond their means as so many Australians choose to do, by purchasing bigger houses and extra cars, by extending the mortgage to go on a Bali holiday, etc.

    I believe in providing support for people who are at a serious disadvantage for reasons entirely beyond their control, but the scope should not be spread so far that welfare becomes an entitlement rather than a safety net.

  3. ” I would also have been interested to learn of the impact of Centrelink on the suicide rate of Newstart recipients and applicants given their appalling treatment of ‘customers’.”
    As a Centrelink employee for 30 years ,having worked in “public contact” for all that time, I find your comment rather disappointing. Whilst I don’t disagree that some staff are not the sort I’d pick to work with some of the most disadvantaged in our society. I think you need to separate the treatment of customers from Government policy. Most of the frontline staff I work with (in an outer southern metro office in Adelaide) , are like myself, caring & helpful. We live & work in our community & have parents/children/partners on Centrelink payments. Many of us , myself included have had unemployed family members ,who have had to seek work in these difficult times. If you are taking the Government to task, say so. Centrelink does not make the rules up as it goes along!

    1. The staff in areas that have high unemployment are generally better but they are by far in the minority of Centrelink staff as a whole. Quite aside from the endless administrative errors in the time I was a Centrelink customer I was routinely treated like shit, talked down to and advised to either: spend all of my savings, split up with my partner (who is now my wife), find more expensive housing so I could get a boost to rent assistance and, if the payments weren’t sufficient I would just have to go to a Salvation Army shelter.

      When I moved to Geelong and had some experience with the staff at the Corio store I was a lot happier: they are miles better than the staff in Norwood (Adelaide) who seem to think welfare recipients are on the same level of inconvenience as dog-shit on good shoes.

      And, yes, I’ve noticed more and more staff are disillusioned with Govt. policy but the more senior employees (and policy officers) aren’t of a similar mind.

  4. I have a great deal of sympathy for both viewpoints outlined above; 1: That Centrelink patrons are the ‘undeserving poor’ AND 2: That welfare payments are horrendously inadequate for people who ARE deserving.

    Background: I am a solicitor in a country practice who deals almost exclusively with clients supported by the Legal Services Commission; on Legal Aid. Almost ALL of them are on Centrelink, either solely or in part.

    I would estimate that roughly half of my clients who are receiving benefits are not deserving. I have no doubt that they need the funding, however I also have no doubt about their capacity to work. I have had some clients tell me that they have had another child so that they don’t have to work. I have others who are on disability pensions, whose disabilities are significant, but not sufficient to prevent them from engaging in SOME form of work.

    On the other hand, I have clients who worked for years, or who have been honestly trying to secure employment for years, but have been unable to do so due to lack of education, skills, or other genuine problems. They tend to be the ones who are struggling the hardest, supporting children, and doing their best to maintain a genuine standard of living.

    There are other issues which often aren’t covered in discussions about Centrelink. One of them is location; it is MUCH cheaper to afford a house in the Elizabeth (SA) area, or a country town, where rent tends to be much lower. The problem there is that those areas also tend to have intrinsically high unemployment, and fewer services/opportunities for employment.

    People on disability pensions are often assigned a pension and then ignored, but for their fortnightly allowance. There is no visible focus on helping them deal with their disability, and as has been mentioned, this can often lead to mental illnesses (another partly-preventable drain on the economy.)

    Finally, the attitude of Centrelink seems to be deny then listen to arguments. My wife and I share bank accounts, and I earn more than enough to support both of us, IF we were living together. I currently live about 3 hours drive away from her, due to work commitments, and so we are paying 2 lots of rent. She is studying, but was unable to get a centrelink allowance because of my income. As it is my income is not really enough to support us, given my constant need to travel.

    I think a solution is possibly to increase funding to the front-line of centrelink and its associated services. Divert funding from pensions (or just allocate further funding) to enable people to get back into work, and if that is not possible, to training programs enabling people to live more cheaply. (I have no experience of being supported solely by benefits, so I can’t talk personally about the sufficiency of the funding.) I bet that the increased expenses relating to those programs would be saved down the line in reduced cyclic dependence on welfare, and thus an ability to boost payments to those who are truly in need.

    PS: Students should get some form of benefit from the moment they move out of their parents house. If you are studying towards a vocation, anything that helps support you is going to help prevent welfare-dependence down the line.

    1. I agree with the second part of your comment but I do believe that in a modern society each citizen should be guaranteed the ability to survive in conditions comparable to what J Higgins laid down in the Harvester Judgement: frugal comfort. This means an expansion of social housing programs to provide a true alternative to private renting or buying, welfare provision that means people don’t have to sell things or go into debt to survive, etc. During the 1940s, when the Government was purusing the policy of full employment, welfare was seen as a safety net to ensure that no Australian would have to live in poverty during times of need. Just as positive reinforcement is more conducive to better results in teaching/parenting I think it would be much more effective for the Government to pursue full employment again so that there is hope, rather than a brutal clampdown on support. I really wonder how long it takes for Wayne Swan’s brain to transform the unfairly fired workers at Toyota, Qantas, etc. to the drains on the state who “need to go back to work” (as though it was their fault). His recent Budget announcements rather contradict the social justice theme in his Monthly essay.

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