Welfare
When our overly-entitled politicians lift their snouts from the trough to tell us that Australia’s budgetary woes require us to cut spending on the most disadvantaged in society, it is unsurprising that they are met with cynicism. And this cynicism is hardly unwarranted.
The rhetoric of our “Problem with welfare,” has been used by a number of treasurers recently (think of phrases like “Lifters and leaners,” or “Taxed and taxed-nots,”) to justify unpopular budget cuts that seem to have greatest impact on the unemployed, the disabled and the elderly.
As a result of these ongoing cuts, the lives of those who depend on government welfare are not easy. Yet, in answer to a call from the Australian Council of Social Services for an increase in welfare payments, the Social Services Minister asked welfare advocacy groups to start being more imaginative in their solutions. At face value, coming from a man on a six-figure salary this type of response to calls to increase welfare payments to the country’s poorest, is a bit hard to swallow.
Which is why many people may be surprised that I think there is a grain of truth in what Christian Porter says. Whilst I think there is a strong case to make about our politicians’ entitlements, I have to actually admit that I don’t entirely disagree with the minister this time.
Whaaat?
Now bear with me, if you have read many of my opinion pieces you shouldn’t confuse me with the type of Coalition supporter that believes in the free market (obviously with subsidised fossil fuel industries) instead of compassion. I certainly believe in the importance of a welfare safety net for those who can’t find work. As Ross Leigh points out in this rather entertaining article the fuss about the welfare burden on the taxpayer seems disproportionate to size relative to the whole budget.
So I am more than happy to see money spent (and more of it) on improving the lives and opportunities for the disadvantaged. Should I fall on hard times I will be thankful that this safety net will be there to support me. I am just not so sure that just increasing payments is the best way to help those who rely on government welfare payments.
Why do I say that?
According to the government website, the full benefit for an unemployed single person is $528 a fortnight, with other subsidies such as rent assistance also available to supplement this. Okay that is not a huge amount of money and an unemployed couple’s combined benefits (before rent assistance and other subsidies are included) is well below the minimum wage, but is that enough money to live happily? I say it could be. Not necessarily without some manner of bill stress, difficulty and tough financial decisions, but possible nonetheless. I don’t say this without having thought about it. It doesn’t leave a lot for expensive addictive behaviours such as alcohol, cigarettes or shopping, I’ll grant you that, but life can be pretty great without having a lot of money, as long as you don't get carried away by the crass consumer culture that is pushed on you by advertisers. I don’t want to sound like Joe “Poor people don’t need cars,” Hockey, who I find a repugnant hypocrite, but I do think with proper support and encouragement, we can make choices to live happily but carefully on limited incomes.
Certainly, aside from my mortgage and the occasional unnecessary purchase or upgrade I could do without, my weekly expenses average out to something that would be manageable on that. That isn’t the case for a lot of people, but I was lucky enough to grow up very happily in households that didn’t have a lot of money so a lot of the things I enjoy don’t cost much (there is a whole section of this website dedicated to these activities) and I take little pleasure in buying new stuff.
And while I understand that restricting my expenditure voluntarily is a far cry from the experience of those who simply have no choice but to survive on this amount, I would respectfully argue that the reason many people on benefits struggle to pay bills is not actually that they don’t have enough money to live, but a range of other factors including addictive behaviours, lack of budgeting skills, and a lack of services and facilities where they live. I would go a step further and say that if welfare payments were increased, even quite substantially, many people would continue to struggle to make ends meet for these same reasons.
What does a middle class guy know about poverty and welfare?
Okay that is a reasonable point. I freely make the admission that for the vast majority of my adult life I have had a guaranteed income, so am writing about the difficult experience of being reliant on government welfare for survival without a lot of firsthand experience (of course if I only wrote about things I had directly experienced I would have to delete half of this website). On the other hand I am a keen observer of people and their circumstances and have worked for years in a low socioeconomic area. I have also taken close note of the experiences of friends and family members who have lived on welfare for extended periods, as well as those who have worked hard in low paying jobs, sometimes earning little more than those receiving government payments. It is worth noting too that financial stress is not an experience restricted to those on welfare and low incomes. Many people with seemingly comfortable wages can also face ongoing struggles to make ends meet due to a diverse range of reasons.
So let’s get imaginative
So yeah, I feel like I do have a bit of an understanding of what it feels like to live on limited funds and I am not necessarily in favour of increasing welfare payments, but that doesn’t mean I am against spending in this sector. Christian Porter asks us to be imaginative and that is exactly what I think needs to happen. Systemic poverty and unemployment are complex problems that require spending in education and infrastructure to address.
Rising property prices push the poorest in the community further and further from population centres, taking with it access to reliable public transport, recreational, educational and employment opportunities, whilst causing ghettoisation and intergenerational poverty and unemployment. If you want to do something about unemployment levels, Mr Porter, perhaps you could start by looking at the factors that are driving this process, instead of blaming its victims. I would love to see a huge injection of funds into outreach programs, diversion programs and community engagement programs in these disadvantaged enclaves.
What about those people who live in cities where the cost of living is much higher?
Again, this is a fair point. I have written elsewhere that with property and rental prices as they are in Tasmania, you won’t hear me complain about petrol prices. If I wanted to live in a nice apartment in Sydney and I was on a benefit, this would be a whole lot harder. One might suggest from my earlier logic that my conclusion is that people in that situation just don’t live in Sydney and other expensive parts of the country. In reality housing affordability in places like Sydney or Melbourne mean even many people in full time employment cannot live there. The answer to this will not be through increasing welfare payments, but through policy that addresses housing prices, including more low income housing availability and perhaps measures such as a reduction in negative gearing.
I write all this with full awareness that I have the luxury of private health insurance when things go wrong and the ability to go on overseas holidays, which I definitely couldn’t afford if I was reliant on government largesse. And I do have sympathy for those on low incomes that can’t afford everything they want, but I still believe there does need to be some form of financial reward for doing a job, otherwise less people would take their jobs and unrewarding but necessary positions would be very hard to fill (apologies if that makes me sound like a neo-liberal prick, that isn’t how it is meant to come across. I’m not about to start chanting “Jobs and growth,” over and over, but after rewriting the last paragraph about five times I still can’t leave out this aspect of my belief).
The argument for incentivising employment
Beyond this though, I am actually very cautious of any politicians making statements about incentivising employment (usually code for punishing those who can’t find work). The financial advantage and the sense of purpose and accomplishment that comes from having a job is all the incentive required for most people.
There is also a side to this conversation that I haven’t really mentioned, which gets plenty of attention on talkback radio; and that is the perceived ‘unfairness’ that those with jobs have to work for their money while those on welfare don’t. I am okay with that. Just grateful to have a job I enjoy and to not need government benefits. But for some this perception extends to resentment towards those they deem, ‘Dole bludgers.’ This view may even be justified in some cases, but it is overly exploited by News Corps (there is Today Tonight exclusive about someone cheating welfare almost weekly), shock jocks and politicians (as I mentioned earlier) so I don’t want to give too much oxygen to it. However I do accept that sometimes it has a modicum of truth (just as there is no shortage of wealthy people who exploit the system to their advantage).
I’ll also make the comment that punitive measures such as limiting payments to a fixed period and Work for the Dole schemes are not only poor incentives for the long-term unemployed to re-enter the job market (assuming they are not already trying), they are poor policy in general. I understand the rationale of utilising the labour possibilities of welfare recipients for the development of infrastructure, but while these policies tend to have a fairly broad populist appeal, they fail the implementation test. The concept of Work for the Dole may appease those who resent the use of government money being given to people ‘for nothing,’ but it provides much less in return than people realise. It has been reported that the cost of administering mutual obligation schemes largely (and in some cases fully) offsets any productivity benefit gleaned from the additional labour.
Taking this idea of the government getting something from its welfare dollar even further, conscription is an equally flawed suggestion. Our military needs committed personnel who have a desire to serve their country, not people who don’t want to be there.
Conclusion
Poverty sucks. Financial stress and not being able to buy the things you or your family want sucks. But with the right mindset and skillset it is a lot easier to manage. I have tried to argue as respectfully as possible that the reason many people feel financial stress is as much due to not having enough money to live happily as not having the skills and support to live happily within their financial constraints. If the Social Services Minister is not just being glib when he argues that increasing Newstart across the board may not be the best approach, I agree, but I want him to put his money where his mouth is and promote policies that will improve the lives of our least well off.
Sadly it is one thing for a minister to make a point academically and another to act on it.
The rhetoric of our “Problem with welfare,” has been used by a number of treasurers recently (think of phrases like “Lifters and leaners,” or “Taxed and taxed-nots,”) to justify unpopular budget cuts that seem to have greatest impact on the unemployed, the disabled and the elderly.
As a result of these ongoing cuts, the lives of those who depend on government welfare are not easy. Yet, in answer to a call from the Australian Council of Social Services for an increase in welfare payments, the Social Services Minister asked welfare advocacy groups to start being more imaginative in their solutions. At face value, coming from a man on a six-figure salary this type of response to calls to increase welfare payments to the country’s poorest, is a bit hard to swallow.
Which is why many people may be surprised that I think there is a grain of truth in what Christian Porter says. Whilst I think there is a strong case to make about our politicians’ entitlements, I have to actually admit that I don’t entirely disagree with the minister this time.
Whaaat?
Now bear with me, if you have read many of my opinion pieces you shouldn’t confuse me with the type of Coalition supporter that believes in the free market (obviously with subsidised fossil fuel industries) instead of compassion. I certainly believe in the importance of a welfare safety net for those who can’t find work. As Ross Leigh points out in this rather entertaining article the fuss about the welfare burden on the taxpayer seems disproportionate to size relative to the whole budget.
So I am more than happy to see money spent (and more of it) on improving the lives and opportunities for the disadvantaged. Should I fall on hard times I will be thankful that this safety net will be there to support me. I am just not so sure that just increasing payments is the best way to help those who rely on government welfare payments.
Why do I say that?
According to the government website, the full benefit for an unemployed single person is $528 a fortnight, with other subsidies such as rent assistance also available to supplement this. Okay that is not a huge amount of money and an unemployed couple’s combined benefits (before rent assistance and other subsidies are included) is well below the minimum wage, but is that enough money to live happily? I say it could be. Not necessarily without some manner of bill stress, difficulty and tough financial decisions, but possible nonetheless. I don’t say this without having thought about it. It doesn’t leave a lot for expensive addictive behaviours such as alcohol, cigarettes or shopping, I’ll grant you that, but life can be pretty great without having a lot of money, as long as you don't get carried away by the crass consumer culture that is pushed on you by advertisers. I don’t want to sound like Joe “Poor people don’t need cars,” Hockey, who I find a repugnant hypocrite, but I do think with proper support and encouragement, we can make choices to live happily but carefully on limited incomes.
Certainly, aside from my mortgage and the occasional unnecessary purchase or upgrade I could do without, my weekly expenses average out to something that would be manageable on that. That isn’t the case for a lot of people, but I was lucky enough to grow up very happily in households that didn’t have a lot of money so a lot of the things I enjoy don’t cost much (there is a whole section of this website dedicated to these activities) and I take little pleasure in buying new stuff.
And while I understand that restricting my expenditure voluntarily is a far cry from the experience of those who simply have no choice but to survive on this amount, I would respectfully argue that the reason many people on benefits struggle to pay bills is not actually that they don’t have enough money to live, but a range of other factors including addictive behaviours, lack of budgeting skills, and a lack of services and facilities where they live. I would go a step further and say that if welfare payments were increased, even quite substantially, many people would continue to struggle to make ends meet for these same reasons.
What does a middle class guy know about poverty and welfare?
Okay that is a reasonable point. I freely make the admission that for the vast majority of my adult life I have had a guaranteed income, so am writing about the difficult experience of being reliant on government welfare for survival without a lot of firsthand experience (of course if I only wrote about things I had directly experienced I would have to delete half of this website). On the other hand I am a keen observer of people and their circumstances and have worked for years in a low socioeconomic area. I have also taken close note of the experiences of friends and family members who have lived on welfare for extended periods, as well as those who have worked hard in low paying jobs, sometimes earning little more than those receiving government payments. It is worth noting too that financial stress is not an experience restricted to those on welfare and low incomes. Many people with seemingly comfortable wages can also face ongoing struggles to make ends meet due to a diverse range of reasons.
So let’s get imaginative
So yeah, I feel like I do have a bit of an understanding of what it feels like to live on limited funds and I am not necessarily in favour of increasing welfare payments, but that doesn’t mean I am against spending in this sector. Christian Porter asks us to be imaginative and that is exactly what I think needs to happen. Systemic poverty and unemployment are complex problems that require spending in education and infrastructure to address.
Rising property prices push the poorest in the community further and further from population centres, taking with it access to reliable public transport, recreational, educational and employment opportunities, whilst causing ghettoisation and intergenerational poverty and unemployment. If you want to do something about unemployment levels, Mr Porter, perhaps you could start by looking at the factors that are driving this process, instead of blaming its victims. I would love to see a huge injection of funds into outreach programs, diversion programs and community engagement programs in these disadvantaged enclaves.
What about those people who live in cities where the cost of living is much higher?
Again, this is a fair point. I have written elsewhere that with property and rental prices as they are in Tasmania, you won’t hear me complain about petrol prices. If I wanted to live in a nice apartment in Sydney and I was on a benefit, this would be a whole lot harder. One might suggest from my earlier logic that my conclusion is that people in that situation just don’t live in Sydney and other expensive parts of the country. In reality housing affordability in places like Sydney or Melbourne mean even many people in full time employment cannot live there. The answer to this will not be through increasing welfare payments, but through policy that addresses housing prices, including more low income housing availability and perhaps measures such as a reduction in negative gearing.
I write all this with full awareness that I have the luxury of private health insurance when things go wrong and the ability to go on overseas holidays, which I definitely couldn’t afford if I was reliant on government largesse. And I do have sympathy for those on low incomes that can’t afford everything they want, but I still believe there does need to be some form of financial reward for doing a job, otherwise less people would take their jobs and unrewarding but necessary positions would be very hard to fill (apologies if that makes me sound like a neo-liberal prick, that isn’t how it is meant to come across. I’m not about to start chanting “Jobs and growth,” over and over, but after rewriting the last paragraph about five times I still can’t leave out this aspect of my belief).
The argument for incentivising employment
Beyond this though, I am actually very cautious of any politicians making statements about incentivising employment (usually code for punishing those who can’t find work). The financial advantage and the sense of purpose and accomplishment that comes from having a job is all the incentive required for most people.
There is also a side to this conversation that I haven’t really mentioned, which gets plenty of attention on talkback radio; and that is the perceived ‘unfairness’ that those with jobs have to work for their money while those on welfare don’t. I am okay with that. Just grateful to have a job I enjoy and to not need government benefits. But for some this perception extends to resentment towards those they deem, ‘Dole bludgers.’ This view may even be justified in some cases, but it is overly exploited by News Corps (there is Today Tonight exclusive about someone cheating welfare almost weekly), shock jocks and politicians (as I mentioned earlier) so I don’t want to give too much oxygen to it. However I do accept that sometimes it has a modicum of truth (just as there is no shortage of wealthy people who exploit the system to their advantage).
I’ll also make the comment that punitive measures such as limiting payments to a fixed period and Work for the Dole schemes are not only poor incentives for the long-term unemployed to re-enter the job market (assuming they are not already trying), they are poor policy in general. I understand the rationale of utilising the labour possibilities of welfare recipients for the development of infrastructure, but while these policies tend to have a fairly broad populist appeal, they fail the implementation test. The concept of Work for the Dole may appease those who resent the use of government money being given to people ‘for nothing,’ but it provides much less in return than people realise. It has been reported that the cost of administering mutual obligation schemes largely (and in some cases fully) offsets any productivity benefit gleaned from the additional labour.
Taking this idea of the government getting something from its welfare dollar even further, conscription is an equally flawed suggestion. Our military needs committed personnel who have a desire to serve their country, not people who don’t want to be there.
Conclusion
Poverty sucks. Financial stress and not being able to buy the things you or your family want sucks. But with the right mindset and skillset it is a lot easier to manage. I have tried to argue as respectfully as possible that the reason many people feel financial stress is as much due to not having enough money to live happily as not having the skills and support to live happily within their financial constraints. If the Social Services Minister is not just being glib when he argues that increasing Newstart across the board may not be the best approach, I agree, but I want him to put his money where his mouth is and promote policies that will improve the lives of our least well off.
Sadly it is one thing for a minister to make a point academically and another to act on it.