Wednesday, June 3, 2015

A fair go for the poor should be above partisanship

There was one thing I liked about last year's unfair budget. Mesmerised as they were by the Business Council, Tony Abbott and Joe Hockey took leave of their political senses and were unfair to just about everyone, bar the well-off.

What's so good about that? Well, it meant the budget's unfair measures were overwhelmingly rejected by the public. No non-government-controlled Senate would ever have passed such measures.

It has taken most of the past year but, as we saw confirmed in this year's budget, Abbott has now abandoned or modified most of those nasties.

Trouble is – and this is my point – I fear Abbott and Hockey have now reverted to the standard cynicism demonstrated by their Coalition and Labor predecessors over the decades.

The fact is, most budgets contain unfair measures or continue unfair policies that should have been corrected, without arousing anything like the outcry last year's did.

Why not? Because most governments take care to reserve their unfairness exclusively for the poor and, in particular, for the people many Australians regard as the undeserving poor – the unemployed (who could all get jobs if they weren't so lazy) and sole parents (who are no better than they ought to be).

To most Australians, the only deserving poor are the elderly and maybe the physically disabled (provided their disability is clearly visible; anyone with a bad back is obviously a malingerer). The mentally disabled should pull themselves together.

Last year, when Abbott proposed to change the age pension from being indexed to wages (meaning it keeps up with incomes generally) to being indexed only to prices (meaning it doesn't) the public was outraged and the government has finally dropped the idea.

But the dole has been indexed to prices rather than wages for decades, causing it to fall further and further below the pension, without there ever being sufficient public disquiet to prompt any government – Labor or Coalition – to relent.

Governments of both colours have pushed people, mainly women, off the less inadequate "parenting payment" – what in less obfuscating days we called the sole parent pension – onto the more inadequate dole without any great protest from the public.

Of course, there are limits to our lack of charity towards the jobless. When, in one of his more notorious captain's calls, Abbott proposed denying every unemployed person under 30 access to the dole for six months of every year, we decided that was over the top.

But when the government relented and abandoned the idea in this year's budget, it replaced it with a plan for those under 25 to have to wait four weeks before their dole payments began, rather than the one week for everyone else.

Few people noticed, let alone cared. Yet no measure could be better calculated to make survival harder for people dependent on the dole. By the time the four weeks are up, any savings you may have had are gone, meaning that if some large unexpected expense arises you're done for.

Last week my co-religionists, the Salvation Army, reported the results of a survey of 2400 people from the 160,000 a year requesting emergency relief. Of those who responded to the survey, 88 per cent were on the dole, the disability support pension or the parenting payment. Only 5 per cent were employed and 4 per cent retired.

More than three-quarters were renters and 13 per cent were homeless. Respondents paid a median amount of $180 a week for accommodation, representing almost 60 per cent of their income. That left them with $125 a week – or less than $18 a day – to live on.

So their most pressing economic problems were the inadequacy of the benefit payments they received and the lack of affordable housing.

But this year's budget contained an initiative that deserves praise. The government has accepted the recommendation of the McClure review that it follow the New Zealanders by adopting an "investment approach" to welfare.

The idea is to use methods similar to those actuaries use to estimate risks and set insurance premiums to estimate the total amount of benefits likely to be paid to particular classes of welfare recipient over their lifetime.

Knowing how much it's likely to end up having to pay to support someone over the long term provides the governments with an incentive to "invest" in measures that will get them into lasting employment and thus save the taxpayer money.

If it encourages governments – and the Department of Finance – to be more far-sighted in their attitudes towards people on benefits, to spend extra money now to save paying more later, and to be more active in fixing people's problems rather than just passively handing out money, it will be a big improvement.

If, by quantifying the government's future liability if it fails to help people onto their feet, it encourages the politicians to do more evaluation of how well its programs work, and more experimentation to find what works and what doesn't, it will be a good thing.

You never know, it may even encourage politicians to be less cynical in their treatment of the poor and disadvantaged. To see concern about the poor the way someone who grew up in the Salvos would see it. To me, it's way beyond left and right.