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Precarious, unsafe and socially inadequate

By John Tomlinson - posted Thursday, 23 February 2017


The existing labour market and welfare systems of Australia are precarious, unsafe and socially inadequate .

Over a century ago, in the early years of the 20th century the Australian labour market and welfare system were described by Albert Metin, a visiting French scholar, as "socialism without doctrine". The introduction of age and invalid pensions in 1910 coupled with the industrial arbitration system formed the basis for such a description. In the mid-1980s, at the height of the welfare state, our system was described by Professor Francis Castles as a "workers' welfare state". But in 2001, in a sad reflective article entitled "A farewell to the Australian welfare state" he described the erosion of the welfare system.

Precariousness

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Insecure, casual, part-time, low paid, unsafe employment is increasingly becoming the new reality for many in the Australian labour market. Guy Standing has written a number of books detailing the rise of the precariat throughout the Western world the first in 2011was entitled The Precariat: The New Dangerous Class. Last year Tim Dunlop in Why the future is Worklessdescribed the gig economy here.

With full-time award-waged secure employment becoming scarcer, it might be assumed that Australian governments would boost the generosity and scope of the social security system to sustain workers confronted by unemployment or underemployment. However, governments of both Labor and conservative persuasion have tightened eligibility requirements and forced thousands of social security recipients from more generous social security provisions such as Disability Support Pensions or Sole Parent Payments on to New Start (a confusing name for a benefit once called Unemployment Benefit) which is paid at a far lower rate and has a range of government imposed obligations attached to it. As I write the Turnbull Government is attempting to legislate to move students and young unemployed people from New Start to the even less generous Youth Allowance.

Since 1987 governments have been obsessed with stamping out what they call the "welfare dependence" of social security recipients. It was once considered that those reliant upon continuing social security payments were simply exercising their rights as permanent residents of this country. The implied moral hazard which recent governments attach to receipt of social security has been imbibed by many employed Australians who resent their taxes going to unemployed people, single parents and those with severe disabilities. This process is aptly named downward envy and it has been consciously encouraged by all governments since John Howard became prime minister in 1996. The intention is to divide the working class into employed and unemployed, to divide those who receive social security into a number of separate categories so that they won't be able to build solidarity, let alone solidarity with the entire working class.

Possible alternative directions

One of many alternatives to the status quo is the implementation of a universal basic income paid at a level above the Henderson Poverty Line to each and every individual permanent resident irrespective of their marital, employment or other social status and one which ignores whether they live alone or with others.

Such a payment would not be able to be garnisheed by the government or by anyone else. This arrangement is necessary to avoid a fiasco like the Turnbull Government's computer generated letters of demand. Some of the most financially vulnerable people who are not bureaucratically sophisticated have been sent a letter saying that up to six years previously they were overpaid social security. Demanding that people immediately repay a debt to the Commonwealth causes emotional and mental health harm when the overwhelming majority were not overpaid social security in the first place.

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A basic income would be paid to Gina Rinehart and every lesser mortal who permanently inhabits this wide brown land. In order to ensure that no-one presently in receipt of welfare assistance or social security is disadvantaged by the change to a basic income, the annual payment would need to be in the order of $500 above the single age pension which is pegged at 27.7 percent of the total average male earnings. In order to ensure that less affluent residents are not adversely affected by the introduction of a basic income many of the educational, health, housing, legal, veterans' and particularly disability services would need to remain in place.

How would we pay for a basic income?

The Australian Budget has not been in surplus since the early years of the first Rudd Government, the current Turnbull Government has been unsuccessfully attempting to slash social security in order to balance the budget. Both Governments have run into heavy headwinds in the Senate. A basic income combined with leaving intact most of the educational, health, housing, legal, disability and veteran's services would require much more funding than the existing social welfare/income support programs.

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About the Author

Dr John Tomlison is a visiting scholar at QUT.

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