|
|
|
 |
|
| Number of people |
% of working age population |
% of working age income support recipients |
|
| Working age population | 13,699,900 | 100.0 | n/a |
| Employed | 9,878,200 | 72.1 | n/a |
| Unemployed | 545,200 | 4.0 | n/a |
|
Income support recipients - Disability Support Pension - Parenting Payment - Newstart/Youth Allowance (other than students) - Student payments* - Other payments** |
2,592,285 708,410 612,866 523,707 387,169 360,133 |
18.9 5.2 4.5 3.8 2.8 2.6 |
100 27.3 23.6 20.2 14.9 13.9 |
Notes:
* Austudy, ABSTUDY and Youth Allowance for full-time students or new apprentices.
** Includes Carer Payment, Special Benefit, Partner Allowance, Sickness Allowance, Widow Allowance and Mature Age Allowance and female Age Pensioners below the age of 65.
Source: Submission 47, p.4 (DEWR).
1.7 DEWR also noted that there has been significant growth in dependency on DSP since 1980: from 2.3 per cent of working age adults claiming DSP to over 5 per cent (708,000 people) in 2005. Parenting Payment Single (PPS) has also increased by over 33 per cent in the last seven years. Those receiving income support tend to remain on benefits for very long periods. For DSP recipients the average duration is around eight years, while for PPS recipients the average is around 12 years.
1.8 DSP and Parenting Payment are received without the need to look for work or participate in the labour force. While some working age income support recipients do work, at least from time-to-time, most receive income support payments with few if any obligations. Only 17 per cent of working age income support recipients actually have a job search requirement, although 15 per cent are undertaking full-time study.[4]
1.9 The Department stated that the high reliance of working age people on income support, with the majority of these people not participating in the labour force (either through undertaking part-time work or through looking for work), has two profound effects that need addressing:
1.10 DEWR stated that:
...an effective safety net will always be essential for those unable to work, but for those with a work capacity the focus should be on what they are able to do in conjunction with appropriate assistance to overcome barriers to employment.[5]
It was noted that Australia has the third highest rate of jobless families (two-thirds are sole parent families) in the OECD and the lowest employment rate of people receiving disability benefits of 16 OECD countries. This had occurred at time when 'jobs growth has been strong, real incomes have risen, and productivity has increased'. As a consequence DEWR commented that 'fewer people should be reliant on welfare for their principal source of income; but this has not happened'. The number of job seekers on unemployment benefits has fallen significantly in line with strong economic and employment growth, but the number of people receiving the DSP and PPS – both passive or largely passive payments – have increased significantly.[6]
1.11 DEWR commented that passive income support is out of step with community norms and expectations and to a large extent reflects the historical purpose of different elements of the system. Australia's welfare policy was designed when full-time work was the norm and female labour force participation was low. This is no longer the case.
1.12 DEWR went on to note that analysis of the Australians Working Together reforms show that participation requirements are necessary to increase the take-up of employment and boost greater financial independence for parents and people with disabilities. Parents with participation requirements had the largest increase in the reporting of earnings compared with parents with lesser obligations. DEWR also pointed to OECD research which demonstrated 'a clear correlation between the introduction of activation strategies and changes in aggregate market outcomes'.[7]
1.13 DEWR concluded:
Reducing welfare dependency will help drive up employment rates, improve the well-being of income support recipients, reduce intergenerational social and economic problems, and help to raise the living standards of Australians.
The economy and labour market remain strong, labour shortages have emerged, and there are real prospects of people moving from welfare to work if engaged and serviced appropriately.[8]
1.14 The proposed changes are directed at four groups of working aged Australians:
1.15 DEWR noted that the key principles underpinning the changes are that:
The Department concluded that these principles reflect an appropriate balance between assistance, incentives and obligations.[9]
1.16 The Minister for Employment and Workplace Relations has noted that:
These reforms, which in many respects are long overdue, recognize that every Australian of working age has the right, and deserves the opportunity, to participate in Australia's prosperity. The best way for people to do this is by having a job and engaging in the economic and social life of our nation.
...At a time of sustained economic growth and unemployment at 28 year lows, it is unacceptable to have 2.7 million or 20% of working age Australians on income support. More that 1.3 million people in receipt of income support have little if any participation requirements. It is also unacceptable to have 800,000 jobless households, in which many generations of Australians do not know what it is like to have a job, let alone steady employment and regular income.
...No one denies the fact that a government must preserve a well-targeted social safety net, while at the same time encouraging working-age people to find jobs and remain employed. The welfare reforms in the Budget delivered last week demonstrate the Howard Government's strong commitment to this principle.[10]
1.17 Following the introduction of the legislation the Prime Minister stated that the reforms build on the work that started with the McClure Report in 2000[11] and the Australians Working Together package in 2001 to reduce the number of jobless households in Australia. The Prime Minister stated:
Growing up in a jobless household is one of the key predictors of poor later life outcomes, in employment, in health and in a range of other social indicators. We do not want to see the spread of intergenerational joblessness, welfare dependency and the helplessness that it generates.
We do not want to leave people on welfare...We want to help people back into jobs and towards self-reliance, and we are aiming to do that through a combination of obligations, assistance and incentives.
I do not consider that we are doing that in a heavy-handed way, but rather with a reasonable set of obligations and a good deal of support...But I think we need to set up a new set of expectations for people entering the welfare system in the future. That is, that they will receive the benefit that supports job search – that is, Newstart Allowance – and not a pension-level payment when we are asking them to look for work.[12]
1.18 Organisations who made submissions to the inquiry supported the policy of encouraging workforce participation and the lessening of long-term welfare dependence in Australia but did not support the Government's proposed approach. ACOSS stated it had long supported welfare to work initiatives, including compulsory job search and training requirements where relevant and appropriate. ACOSS also commented:
We are deeply concerned that 700,000 people have to rely on DSP for their income, 600,000 rely on Parenting Payment, and almost 600,000 rely on unemployment payments, and that almost one in five children is growing up in a jobless family.[13]
They noted that by international standards reliance on social security among people of working age in Australia is not high. However, the main problem faced after years of strong jobs growth is that most of those who remain jobless are drawn from the most disadvantaged sections of the community and it will be difficult for these people to move off income support. The reasons for this include employer resistance; limited skills; poor health; recent marital separation or domestic violence; and the need for many recipients to live in regional areas with fewer jobs so they can afford the rent.[14]
1.19 ACOSS also commented that an important goal for welfare reform is to assist more people with disabilities into employment. It noted that in Australia, the overall number of disability pensioners is above average when compared to other wealthy countries, but 'only 9% of our disability pensioners have jobs compared with an average of about 30% for other countries'. ACOSS concluded that ' unfortunately the disability pension is still widely regarded as "the end of the line" for people's future career prospects'. However, ACOSS did not believe that 'simply diverting people from DSP to Newstart Allowance, or making them look for work and reducing their pensions' was a solution. ACOSS concluded that the main outcome of these reforms for people with disabilities would be more hardship.[15]
1.20 UnitingCare stated that the proposals failed to recognise changes in the Australian labour market.
While UnitingCare Australia supports reform measures that allow for joint and meaningful participation between Government, individuals, families and communities, and the services that enable reform to occur, it is essential that these reform measures seek to utilise empowerment rather than compliance or they risk endangering their very objectives...In our experience, across Australia, people want to work. A necessary component, therefore, for providing pathways to employment is to ensure that policies seek to identify and address the multiple barriers people face...and encourage and empower unemployed Australians rather than relying on negative incentives that stigmatise individuals and risk reinforcing fear and poor motivation.
Many of the proposed initiatives represent overtly coercive strategies to achieve welfare reform, rather than promoting a sense of mutual and meaningful participation.[16]
1.21 UnitingCare went on to state that despite the economic stability of the country, 'more and more Australians are struggling to live with dignity and hope within an ever-changing environment'. It noted that there have been significant changes in the structure of the family unit, with many more non-traditional family structures; there has been a significant rise in casual employment which disadvantages low-income and low-skilled workers; unemployment is no longer short-term and sporadic but since the late 1980s intergenerational unemployment had emerged; and industrial relations changes are likely to reinforce existing trends towards increased part-time and casual employment.[17]
1.22 UnitingCare concluded:
Our experience...is that the challenges of moving the last tranch of unemployed Australians off welfare and into work are more around ensuring that jobseekers have adequate life-skills prior to seeking work, that they are job ready, and that there are adequate post employment supports to help them stay in a job once they have found one, than they are around matching them for a job. The other major challenge is that there are many areas in Australia in which jobs are simply not available.[18]
1.23 Both The Smith Family and The Brotherhood of St Laurence (BSL) welcomed the emphasis on training and work experience.[19] BSL stated that this was 'encouraging' and that:
BSL has argued that over the last few years social security and employment policies have been too inflexible and not tailored to the particular circumstances of job seekers.
In addition, BSL stated that it supported initiatives to help people with disabilities and sole parents into employment, 'since many would like to work but face a combination of barriers to employment' and concluded that 'the Government has an opportunity to make a significant difference to the lives of people involuntarily excluded from employment'. However, BSL stated that the proposed changes to require new applicants for the Disability Support Pension, and who no longer qualify, to apply for Newstart was an out-of-date approach.[20]
1.24 In relation to the proposed changes for sole parents, BSL stated that 'there is virtue in seeking ways to raise the workforce participation of sole parents and reduce the financial disadvantage of their families' but there was concern about how the reforms might affect this group. The Brotherhood went on to state that policy must 'address the considerable demands of being a sole parent and the unique barriers to combining work and caring they experience'.[21]
1.25 The Smith Family also raised some concerns, including the adequacy of the employment preparation initiatives; the capacity for individuals returning to the workforce without formal education qualifications to compete for employment other than low-skilled, low-waged and insecure jobs; the impact of the intense competition for jobs due to relatively high levels of over-education in Australia; and high unemployment in rural and regional areas.[22]
1.26 Other submissions supported particular aspects of the legislation (details of the Welfare to Work package's provisions are outlined in Chapters 2 and 4). The Physical Disability Council of Australia welcomed the removal of the 90 minute rule for travel in relation to Newstart and Youth Allowance; the increased Mobility Allowance and the right to return to the Disability Support Pension for any reason within two years.[23] The Haemophillia Foundation Australia supported the expansion of specialist employment assistance places; the liberalised rules relating to eligibility for the Pensioner Concession Card and other allowances and the retention of DSP when recipients undertake up to two years of employment, and engagement with employers to encourage a more open approach to employment of people with disability; the streamlining of the assessment and referral system; and increased allocations for workplace modifications and wage subsidies.[24]
1.27 ACROD, while voicing concern at several of the measures contained in the legislation, supported a number of the features of the Welfare to Work package:
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