We can clear the dole queues
22 January 2019
By Nyunggai Warren Mundine AO
Labor has given its strongest signals yet that it will reinvigorate the welfare state with plans to weaken mutual obligation under Jobactive and abolish the CDP work for the dole program in remote Australia.
This month Patrick McClure, who advised Coalition governments on welfare reform and mutual obligation, got behind Labor’s proposal on Jobactive, saying that mutual obligation had become “punitive”. Business groups say mutual obligation needs more “flexibility”.
Mutual obligation isn’t cruel. What’s cruel is long-term welfare dependence. And far too many Australian have been languishing on welfare for far too long.
In June 2018, over 820,000 people were receiving Newstart or Youth Allowance (other), the dole for under-22s, with over 600,000 on some kind of income support for more than a year, and 276,000 for more than five years. On average, Newstart recipients are on income support for more than 65 months; Youth Allowance (other) recipients more than 20 months.
Bundaberg in central Queensland has over 5000 people on Newstart or Youth Allowance (other), the most of any postcode in Australia. It also has the second-highest number of disability pensioners, the fourth-highest number of single parent pensioners and the eighth-highest number on carer payments.
This isn’t unusual.
Postcodes with the most recipients of one type of benefit, either nationally or by state and territory, are typically in the top five or ten for other benefits — centres of disadvantage where people move from payment to payment, sometimes their whole lives.
The social services sector peddles the lie there aren’t enough jobs. I’ve been close to welfare-to-work initiatives much of my life and I know finding jobs isn’t the hard part. The hard part is getting someone entrenched on welfare to start and retain a job. I agree 20 job applications a month is a box-ticking exercise for long-term welfare recipients. Most are unemployable, left to their own devices.
But there is a solution — and it’s not to abandon mutual obligation.
Andrew Forrest was determined to create jobs for Aboriginal people in his companies but those he most wanted to help simply weren’t able to step into a job. Most had multiple barriers to employment: addictions, no driver’s licence, criminal records, no secure accommodation, illiteracy. Some had never worked. Skills training wasn’t enough.
He developed the VTEC (Vocational Training and Employment Centres) model where applicants are guaranteed a job if they complete training. VTECs case-manage people to overcome all these hurdles.
Forrest learned if a person stayed in the job for 26 continuous weeks, he had them for life. That’s the critical threshold between staying in the workforce and resuming welfare.
VTECs have now been adopted as the Commonwealth indigenous Employment Strategy. They should be adopted for everyone.
In my book, Warren Mundine - In Black and White, I propose a pilot in the big centres of disadvantage. If you can transition people from welfare to work there, you can do it anywhere.
Here’s my proposal:
Identify the postcode in each state and territory with the most unemployed. As June 2018 that’s 4670 (Bundaberg, Qld), 2170 (Liverpool, NSW), 0822 (northern NT), 3064 (Hume, Vic), 6210 (Mandurah, WA), 5108 (Salisbury, SA), 7250 (Launceston, Tas) and 2615 (Belconnen, ACT). Around 28,000 people.
Establish VTECs servicing each postcode. Divert all training and job assistance funding for that postcode to the VTEC.
The VTEC finds each participant a job. It asks businesses to provide a job to those who complete the program. Government leans on big business too — for example by making hiring from the VTEC a condition of also being allowed to hire foreign workers. Finding jobs will be the easy part.
The VTEC case-manages each participant to start their job and retain it for at least 26 weeks. If they don’t make it the first time, it keeps helping them until they do.
Participation is a mandatory condition of participants’ benefits. That’s not cruel. That’s believing they’re worthy and capable of independent lives. Governments and the social services sector struggle with this. This will be the hard part.
How much will this cost? Nothing. Government can repurpose funds from existing programs servicing these postcodes.
With VTECs, only one form of mutual obligation is required — accepting the assistance provided and working in the guaranteed job. It isn’t punitive to find someone a job and make them take it. A job isn’t a punishment. It’s a blessing.
Welfare dependency among working-age Australians is now the lowest in 30 years. The government can go further by adopting VTECs as its unemployment program. Take the policy to the next election. It offers hope to people stuck on welfare and a clear choice for voters between growing the welfare state under Labor and clearing the dole queues under the Coalition.
The solution to welfare poverty isn’t more money or more training or fewer job applications. The solution is a job.
This article was first published in the Daily Telegraph on 19 January 2019.