This week Social Services Minister Christian Porter announced the government’s intention to tackle long-term welfare dependence. It’s overdue.
An OECD report this month found Australia has nearly 600,000 NEETs (“not in education, employment or training”) under 30. Forty per cent are “inactive and unwilling to work’’. Department of Social Security figures show 73 per cent of Newstart recipients — more than half a million people — have been on it for more than a year. This week government releases a PricewaterhouseCoopers report showing high proportions of young welfare recipients will be welfare dependent for large parts of their lives.
Public debate on these issues typically involves anger over system abuses and costs to taxpayers. Actually, welfare recipients are the main sufferers. Welfare is another word for poverty. Entrenched welfare dependence is entrenched poverty, whether recipients abuse the system or not.
Some say the solution to poverty is to raise welfare payments. But poverty isn’t just a factor of income. It’s also about deprivation of basic needs such as education and employment; lack of basic capabilities to function; lack of purpose and aspiration; lack of autonomy and self-sufficiency.
Welfare can never deliver these. Even if welfare payments were doubled, recipients would still live in poverty.
Young people who refuse work are opting for a life of poverty. A long life at that. On current longevity projections, they could live to be 100. And they’ll inflict this life of poverty on their children.
When I was 18 I worked as a labourer for Sydney Water and travelled to work on a motorbike. One afternoon I collided with a truck, breaking my forearm so badly the bone protruded from my arm. Attempts to mend it failed and doctors grafted a new bone from my hip, held by an external fixator.
I couldn’t work for 11 months and went on workers’ compensation. I moved in with some unemployed mates, sleeping most days and going to parties most nights. When doctors cleared me to work, I was physically OK. Mentally, anything but. I didn’t want to work anymore. But payments stopped so I had to. It was a daily struggle. I was lethargic. Took lots of sickies. It was months before I was happy working again.
The fact is, most people who’ve been on the dole for more than a year are unemployable if left to their own devices.
Some have significant barriers to employment such as health problems, addictions, legal problems (from driving disqualification to criminal records), low literacy or numeracy, or low skills.
Some have attitude problems — they don’t want to work, whether due to defiance, laziness, bravado masking other barriers or a collapse in motivation like I had.
Some won’t get work unless they broaden what they’re willing to do. There are hundreds of thousands of jobs in Australia — including low-skill and manual jobs — that Australians either can’t or won’t do. Australia has shortages in many trades. And one in four agricultural workers are foreigners on working holiday visas.
The “backpacker tax” is controversial because farmers don’t believe they’ll find Australians to replace backpackers if they lose incentives to work. I’ve visited remote indigenous communities where farms want to hire locals but no one will take the jobs. I’ve heard exasperated elders tell me government should cut off people’s benefits if they won’t work.
Structural disincentives can also make it impractical for welfare recipients to work through no fault of their own. For example, losing housing entitlements or other benefits can leave people worse off if they take a job.
There’s no point just telling these people to keep applying for work. They’ll be unsuccessful, whether due to rejection by employers or their own sabotage. And work-for-the-dole has never been shown to deliver a path to real employment.
The only solution is to find a job and a willing employer and intensively case-manage someone to be able to start the job and retain it for at least six months, addressing barriers to work in the process. This approach has been demonstrated to work for long-term indigenous unemployment. And finding the jobs is actually the easy part.
If people simply refuse to work, government must stop their dole. When governments prop up people who won’t work, they’re enabling poverty; sponsoring disadvantage.
In 2014 the Australian Council of Social Services called for a national plan to tackle the “scourge of poverty”. Good idea. Let’s start with a plan tackling the scourge of long-term welfare dependency and a plan to move people from welfare to work. Welfare dependence is poverty. And the only escape from poverty is a job.
This article was first published in the Daily Telegraph on 22 September 2016.
Long term welfare destroys us all
23 September 2016
By Nyunggai Warren Mundine AO