Budget leaks are common enough a week out from the big night in Canberra. But they are generally damp squibs, either controlled drops or minor revelations that don’t tell us anything that interesting.
But the big story this year is different. The scoop (if that’s what it is) from the Seven Network’s Mark Riley that Labor plans to increase the rate of JobSeeker for older recipients has had a significant impact on the political debate. Welfare activists are aghast. Backbench MPs are rushing to background Guardian Australia journalists. Treasurer Jim Chalmers is being forced to hose it down.
One reason Riley’s leak appears to have gained traction is that it appears so plausible. A carve-out for older jobseekers reeks of focus group politics. It also appears to confirm some of the government’s previous backgrounding. Over-55s on JobSeeker already have slightly relaxed mutual obligation requirements, and over-60s in long-term unemployment receive a higher fortnightly payment.
There’s no doubt Chalmers plans some sort of package to address the pressing cost-of-living crisis for poorer Australians. Broad hints have been dropped for months. He said yesterday: “There will be a cost of living package in the budget and it will prioritise the most vulnerable Australians.” Guardian Australia’s Canberra bureau reckons the over-55 increase is “part of a suite of poverty-reduction measures, including raising the children’s eligibility age for the single-parent payment to 14, and possible changes to rent assistance”.
But that’s unlikely to silence the debate on the adequacy of welfare benefits for the simple reason that Australia’s benefit payments are absurdly stingy.
Australia has one of the lowest unemployment payments in the OECD. Everyone who takes even a cursory look at the problem agrees the rate has to be raised — including the government’s Economic Inclusion Committee, chaired by former deputy PM Jenny Macklin.
The committee’s report bluntly recommended a “substantial increase in the base rates of the JobSeeker payment”, as well as a boost to rent assistance. The release of the report added to the rising crescendo of public campaigning around welfare payments that has only been exacerbated by the cost-of-living crisis that is crippling low-income earners.
The government didn’t want a public report into the adequacy of welfare payments — it was forced to accept one as the price of independent Senator David Pocock’s support for Labor’s cherished industrial relations reforms late last year. Perhaps predictably, the government has struggled to position itself on welfare policy ever since the committee’s report dropped.
The Albanese government is politically vulnerable on welfare policy because it strikes directly at Labor’s sensitive left flank. The Coalition didn’t have to pretend overly earnestly that it stood for the disadvantaged, but Albanese has made much of his upbringing by a single mother on benefits in public housing. And throughout 2020 and 2021, Labor MPs lined up to position themselves in favour of raising unemployment benefits and other government transfers.
Raising the rate debate clearly makes Labor uncomfortable. The Rudd and Gillard governments had a less-than-stellar track record in welfare policy, refusing to raise the unemployment benefit across six years in office. Most notoriously, under Julia Gillard, Labor tightened eligibility for the sole parent payment, plunging tens of thousands of single parents (mainly single mothers, of course) into poverty.
While Wayne Swan can rightly claim credit for lifting the rate of the aged pension as treasurer, he also raised the age of pension eligibility to 67, highlighting the problem of long-term unemployment for older Australians.
Now that it is once again occupying the government benches, Labor has discovered that squaring the circle of fiscal responsibility and social need is rather more difficult than it might have hoped. Paradoxically, the billions of dollars of bonus revenue flowing into Treasury coffers from high commodity prices is making Labor’s protestations less rather than more convincing.
At a deeper level, the politics of welfare are so difficult for the modern Labor Party because it is so ambivalent about universal welfare provision.
Labor’s policy platform across nearly all portfolios is shot through with means tests and other forms of penny-pinching eligibility requirements. Mutual obligation is a policy first implemented under Paul Keating, before being ramped up by John Howard, and Labor has remained wedded to long-held beliefs around the need to “target” assistance to the most needy and deserving.
In this worldview, Laborist traditions of support for the working-class wage earner slide easily into incantations that “the best form of welfare is a job”.
Both the economics and politics of welfare have shifted left since Labor was last in office, however. An unemployment rate below 4% undermines arguments about the supposedly unbearable cost to the taxpayer, while galloping consumer inflation makes the need for tight eligibility seem cruel. With job vacancies still plentiful and business crying out for more workers, it’s clear that many people who remain on long-term unemployment rolls face very significant barriers to work.
And the electorate has moved on too. One fascinating aspect of the robodebt royal commission was how effectively it demolished the old mantras about dole bludgers and welfare rorters. The real cheaters, it turned out, were the highly paid bureaucrats in Services Australia.
The droves of under-40s voters who delivered Labor government last year — in general by giving the ALP their second preference — are much more progressive than the Howard-voting generation of baby boomers they are replacing.
A policy calculated to reward (however slightly) older welfare recipients at the expense of younger ones simply adds to the generational rage that younger voters are feeling. Labor will ignore such sentiments at its own peril.
Do you think it’s a bad thing to give older Australians — probably mostly women — a higher JobSeeker rate? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
Guess what? People over 55 have kids, they worry about their future, and that of their grandkids. Piling the pressure on younger people also piles the pressure on older people, who care about them and want to support them. Scrap the stupid, damaging, economically unjustifiable tax cuts. Review the preposterous spend on Submarines that we won’t see for at least 10 years, have at best a chance of giving us two or three operational subs, and cede our control of our own military forces to the U.S. We could spend 1/5 of that money and get a better defense result. But do not, Labor, think you will get away with saying ‘there’s no money’ after you get back from feathering the AFL’s new stadiums and spend this other money. The anger out there is growing. Raise the dole for everyone. Don’t just be a reddish tinged version of Scot Morrison.
exactly – I’m over 55 and, while not doing it tough, we’re far from being easy street – but to try and bribe me to vote for Labor while I see my kids struggling with low wages and high interest … Labor ministers must think I’m as a big an ars*hole as they are
They seem also to miss the fact that many Boomer parents help, or try to help, their kids financially. And that’s right and proper because that’s what parents do. But not all of us made a killing in investment properties. By denying our kids the chance of decent life this government is spreading hardship.
I was a “True Believer”.
Praise Gough.
And if we still worked in an economic system where ensuring everyone had a job was seen as a core responsibility of Government, rather than an inflationary catastrophe, this vapid platitude might mean something.
But we don’t. We work in an economic system that deliberately and actively seeks to maintain a pool of unemployed workers to control inflation.
The least we could do is offer them enough compensation to live on.
Many people who have been on jobseeker long term should really be on DSP.
The eligibility for DSP has been squeezed so much that it is almost impossible to qualify.
Spot on.
Agree.
Around 750,000 Australians receive DSP payments and around 250,000 more receive Carer’s payments to look after people with disabilities.
It’s just daft hyperbole to claim ‘it is almost impossible to qualify’.
Conservatives follow the punishing logic that the dole should be kept low to make sure the “shiftless” look for work, ie are available to work and don’t charge much when they do. Apart from being ethically bankrupt this logic runs counter to evidence in the modern world. If you become unemployed under current conditions most will not stay financially afloat much longer than their savings combined with the dole. After that, it’s a drift down into survival mode, which undermines job seeking psychologically and financially.
We saw under CoVid that the increase in the dole lifted people out of dire poverty and gave them back resources, energy, motivation and self-respect and there was a rise in the participation rate and fall in unemployment. Being on a living income broke the survival mode despair and brought back home how worthwhile life could be on a living income. Most already know it but people living for months in poverty have this driven out of them by a grinding pressure that creates psychic immobility. It is both ethically and economically rational for the dole to keep people out of poverty.
“Savings combined with the dole”? It doesn’t even work like that – you have to spend all your savings before you qualify to receive the dole. It’s forced penury.
They are actually a bit more lenient with your savings currently. Something I wish I’d known back in 2016 when I waited a year living off savings before signing on because I thought I’d be rejected.
Often Labor appears to be quite conservative on socioeconomic issues, while too many Labor MPs look and sound like LNP MPs, often just a wafer thin margin separating them on issues; shared values on refugees, immigrants, welfare etc., suggesting a whiff of eugenics (of the pecking order).
Likely that many in Labor shares the money obsessions and values of, and keeps an eye on, the fastest growing voter demographic i.e. 70+ years dwarfing younger enrolments/movements on electoral rolls.
The social payment dynamics are complicated and one understands that it’s very difficult transition to retirement for over 50s presently, if no significant super nor the ability to open an income stream in transition to retirement.
For younger generations it maybe easier to access employment with ageing and demographic decline (not everywhere esp. regions), but it simply doesn’t seem to be equitable or fair?
One wonders what the ACTU and/or various unions think of this policy?
That increase in the dole during COVID-19 only happened because for once the “severely deserving” were out of work and more visible (thanks 60 Minutes, 7.30 Report et al.) and if you didn’t see it on your TV, it was happening in your family. As long as the unemployed are “other” – and at 4% they are very “other” nobody has felt the need to address this.
So Jim, how about double the PRRT, work over the housing Ponzi by nibbling away at it year after year, delay the top-end tax cuts for as long as you can then take it to the next election putting it at the LNP’s doorstep. Their solution=their problem. Push the savings into increased UB for all and formulate a public housing policy with the states.
you’re welcome.
A couple of things occur: to me
1. We can be very grateful to Senator Pocock for getting us this committee and the transparency and accountability it gives voters. We can also be grateful to the “teals” who stood up for increasing JobKeeper when Labor said no during the run up to the election. This took JobSeeker concerns to a different level and gives us stronger voices when we contact our MPs and Senators.
2. It’s going to be fascinating to see how the Treasurer squares this with the wellness budget which should also bring greater accountability and transparency. I’m really keen to see how the government values and measures things like the skills, economic stability and health of the younger proportion of our population and the role of these things contribute to our national wellbeing and economic strength over the short to long term. Going by what we are seeing, I predict spin over clear, concise definitions that we can use to measure outcomes.
I have contacted a bunch of Labor people about JobSeeker and interestingly someone actually replied today. The (inadequate) reply was from a Senator. I explained to the Labor Senators in my state that I would be preferencing Green candidates over Labor candidates at the next election if JobSeeker wasn’t addressed properly. This is the first time I have received anything but an automated response to an email when I’ve written to a politician. Even positive emails only ever receive an automated response. Perhaps the heat is beginning to be felt?