The Guardian March 13, 2002

War against the poor

The "War on Terror" is costing the Government a bomb. So much so they 
have foreshadowed major changes to the welfare system in an effort to reign 
in social security spending. But while changes to unemployed benefits and 
Job Network schemes were paraded in front of the media, their secret plot 
to slash disability support pensions in the upcoming budget is being kept 

The Federal Government, led by the infamous Ministers Abbott and Vanstone, 
has announced major changes to the Social Security system. The overhaul 
however, is shuffling the deckchairs on what remains an inherently flawed 
system, one that ignores the reality of 700,000 unemployed workers.

The "public" announcement was in relation to the "breach" system used to 
punish the unemployed, and a restructuring of some of the privatised Job 
Network functions.

From July 1, the current "breach" system that reduces payments over a set 
time, when obligations like attending an interview are not met, will be 
drastically changed to suspend payments completely.

Senator Vanstone says the old system was unreasonably harsh on those who 
were most vulnerable, for example the mentally ill, homeless or illiterate. 
She argues that suspending their payments completely will "encourage" them 
to come into a Centrelink office and "discuss their situation" and "work 
through" their issues.

Payments may then be restored from the date of suspension for those with a 
"reasonable excuse". (It has not yet been clarified how a "reasonable 
excuse" is defined or who judges its validity.)

The changes are in response to a draft report on the Job Network system by 
the Productivity Commission, which has found significant flaws in the 
current system.

Significantly, it reports that "a significant share of disadvantaged job 
seekers receives little assistance" from the privately contracted Intensive 
Assistance scheme.

One of the flaws of this system is that the private contractors "park" the 
disadvantaged in the system; getting paid by the government to have the 
person on their books without matching them with suitable jobs, and without 
having to structure a program to address a person's specific problems, e.g. 

The report says that intensive assistance should be available for a six-
month period only, forcing the contractor to achieve results within a set 

"The Commission stresses the importance of achieving a balance between an 
overly prescriptive approach aimed at protecting taxpayers' funds and job 
seekers and one that detracts from efficiency, with greater scope for 
targeted risk management", says the report.

Indeed, the overly prescriptive protection of taxpayers' funds has only 
been applied when paying benefits to job seekers. When it comes to the 
private Job Network contractors it has been a free-for-all.

Intensive Assistance "parking" is not the only rort contractors have 
engaged in. Agencies have also been caught creating dummy short-term part-
time jobs themselves, placing the unemployed in them, and reaping a 

After just 15 hours of work the job seeker then goes back on the agency's 
books for another commission to be earned later.

However the most alarming of the changes have been kept hidden from the 
public, until secret cabinet budget proposals were leaked to The 
Financial Review last week.

Howard's razor gang are planning to make major savings by placing harsh new 
restrictions on the Disability Support Pension (DSP). Besides redefining 
the eligibility criteria, they will place the disabled under tighter 

They also intend to remove the disparity between the DSP and other 
payments, lowering the amount the disabled receive and placing all benefits 
under one umbrella "working age payment". They hope this will make the DSP 
less attractive to the unemployed.

As a final insult, they will then throw the disabled off benefits 
altogether when they are able to work just 15 hours, without respect to how 
much (or little) they are earning for that work.

(The current assessment to grant a person a DSP is that they be unable to 
work for over 20 for at least two years.)

In response to the DSP changes, Labor spokesperson Wayne Swan said, "That's 
why we say this is a Government that is always strong on controlling the 
weak and very weak in controlling the strong.

"They're not out there saying 'oh we're going to solve the black hole in 
the budget by cutting out tax avoidance at the top end of town', their 
solution is to go out there and target the disabled."

Ultimately the Productivity Commission, the Coalition and the Labor Party 
still refuse to acknowledge the truth of Australia's welfare crisis: the 
huge disparity between the number of unemployed people and the number of 
jobs available.

Throwing the disabled into the "unemployed" pool will only jack the 
percentage up higher.

While the Government trumpets Australia's economic "boom", high 
unemployment remains. Companies are not employing extra workers, just 
skimming off the extra productivity as cash profits.

One of the only budget targets this Government has met during the last 
financial year is to keep the unemployment rate at seven per cent.

Yet Minster Abbott claims that taking six years to bring the unemployment 
rate down from 9 per cent to seven per cent over six years "is one of the 
Howard Government's most significant achievements".

Can we then assume that in 21 years time the unemployment rate will be zero 
per cent? Not unless we have a new type of government that gives priority 
to social security instead of war.

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