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Issue #1501      18 May 2011

Federal Budget 2011-12

When giving is taking away

The ritual is well established. Leaks, media rumours and doorstop interviews with senior politicians prepare the public for a “tough” federal budget. The tabloids forecast “horror” cutbacks for good measure. The second Tuesday in May comes and goes and the consensus in the system-serving media is almost inevitably that it wasn’t so bad after all. Some right-wing columnists chime in that it wasn’t tough enough – that too much is still spent on welfare and too little on meeting the insatiable needs of business. The 2011-12 budget was one of those but low-income earners and recipients of welfare payments will not be feeling the heavily promoted sense of relief.

The writing was on the wall. Gillard’s speech to the Sydney Institute last month concerning “The Dignity of Work” made it clear her government will continue to peddle the myth that the major reason there are half a million Australians on unemployment benefits is that they simply refuse to take up opportunities. The same goes for the even greater number on the Disability Support Pension. Single parents, youth and those living in severely disadvantaged communities will also be prime objects for the government’s “tough love” this year.

Single parents whose youngest child turns eight will be forced off the parenting benefit and onto Newstart – a drop in weekly income of $56. “With the OECD estimating that two thirds of children of single parents on income support are living in poverty, ... this is retrogressive, and should be reversed. Parents need support to address barriers to paid work, but not cuts to basic income to meet their families’ needs,” Dr Cassandra Goldie of the Australian Council of Social Service said.

The minimum age for eligibility for Newstart is to be pushed up to 21years. Young people without jobs will be forced onto Youth Allowance – a cut in income of $43 a week. The long-term unemployed (those out of work for more than two years) will be forced to participate in the humiliatingly labelled “Work for the Dole” scheme for 11 months out of 12 or get booted off benefits.

Most unemployed will be obliged to attend compulsory interviews to plan the “transition” to the jobs supposedly just waiting to be filled. Employers will receive $6,000 from the government over six months for taking on a long-term unemployed person. The biggest “carrots” by far in the budget are going to employers.

The budget papers noted that only nine percent of Disability Support Pension (DSP) recipients are currently deriving any income from paid work even though only four per cent are “manifestly disabled”. The government concludes, therefore, that people with disabilities are workshy. As punishment, new claimants for the pension will have to spend 18 months on Newstart trying to get a job before qualifying for the DSP. That’s a reduction of income of $128 per week compared to the current arrangements. DSP recipients under 35 years and deemed to able to work eight hours a week will be forced to seek employment or be struck off benefits.

Ten communities across the country, like Logan in Queensland and Kwinana in WA, are to be targeted for trials of Tony Abbott’s style of “tough love”. Parents on benefits could have benefits suspended for 13 weeks if their children persistently miss school. As if that will fix the problem! Those reported to child protection authorities will have 70 percent of their benefits “income managed”. A stigma-bearing Basics Card will be issued.

Of course, the government is keen to point to the “sweeteners” contained in the budget. People on benefits will be able to work longer in paid employment before having their government payments docked. The Commonwealth is spending $558 million for training with a package designed to make vocational education and training more “flexible”. This is code for expanding the role of private providers at the expense of the public TAFE system. States are to be blackmailed into accepting the “reforms” or miss out on the funding.

This is a win/win budget for private enterprise. Single parents, the unemployed and people with disabilities are to be forced into jobs in the lowly paid slow lane of the economy forcing wages in that sector even lower. Training supposedly designed to ease this transition will open up new business opportunities at the expense of the public sector.

“It’s rather feeble when the people who can afford it the least have to help fix the budget deficit,” Sole Parents’ Union president Kathleen Swinbourne said. Anger is growing. The Gillard government’s approval rating has slumped in the wake of the budget and protests are scheduled against the combined effects of state and federal government policies on communities. Australia hasn’t been spared the effects of the global capitalist economic crisis. Workers and the disadvantaged did not cause this downturn and the battle is on to make sure the people are not going to be made to pay for it.  

Next article – Justice arrives belatedly in prison van death case

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