The Newstart Allowance stalemate reflects a lack of consensus about its purpose

Over the past five years, the Australian Council of Social Service (ACOSS) and other welfare groups have launched a number of campaigns to persuade Commonwealth Governments (respectively Labor and Liberal-National Coalition) to increase the Newstart Allowance for the unemployed. But to date, despite gaining support from a range of progressive and even conservative sources, this advocacy has not been successful.

Although we currently spend $178 billion per year (reported to rise to 191 billion by 2020-21) on social security and welfare payments and services, there is no consensus regarding the aims and values of our welfare state in general. This lack of common ground about objectives and rationale particularly extends to payments for the unemployed and the sick even though they constitute just over six per cent of total expenditure ($11,126 billion in 2018-19). The largest and growing proportion of our payments is devoted to aged care payments and services, and assistance to people with disabilities (over 115 billion combined in 2018-19). Yet, it is the relatively inexpensive Newstart Allowance which is the source of most political contention.

ACOSS has consistently presented three arguments in favour of lifting the rate by up to $75 per week: that an increase is necessary to raise Newstart recipients above the poverty line and prevent financial stress; that Newstart is no longer a short-term payment aimed at facilitating job search, rather an increasing number of Australians rely on the payment long term; and the low rate actively hinders the unemployed from seeking work.

But ACOSS was not able to convince the then Labor Government to include an increase in the 2013 Federal Budget. The government acknowledged that the payment rate was low and difficult to survive on, but argued that the main priority was to assist the unemployed to find employment, and that a lift in the Newstart rate could discourage the unemployed from accepting low paid jobs.

For example, the then Minister for Workplace Relations Bill Shorten argued: 'I don't accept there is a permanent underclass of people who can never work. The trick is to give people control over their own lives. Once you surrender and write people off, I think you are failing them' In other words, the Minister believed that any increase in Newstart would just encourage the unemployed to become permanently reliant on government support:

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The low Newstart rate again provoked public attention in the lead up to the 2018 federal budget following calls from Chris Richardson of Deloitte Access Economics and even former Liberal Party Prime Minister John Howard for an increase. However, the then Liberal Party MP Julia Banks publicly declared in May that she could live on the Newstart rate of $40 a day.

Another Liberal Party MP Tim Wilson admitted on the Q&A program that it would very difficult to live on such a low income, but added that Newstart was meant to be a temporary trampoline that nudged claimants back into the workforce, not a comfortable hammock that accommodated people long-term. He added that every dollar given to Newstart recipients was a dollar taken from other tax-paying Australians. Linda Burney, the Labor Party's Shadow Minister for Human Services, denied that it was possible to live with dignity on $40 a day. But she would only commit to a review of the entire income support system, rather than promising an increase in the rate of Newstart. She also agreed with Wilson that Newstart was a temporary payment for those seeking employment, and not intended to be a long-term option.

The lack of consensus around Newstart payment levels is reinforced by the recent proposal by Independent MP Cathy McGowan to establish an independent Social Security Commission Bill to determine payment levels. A parliamentary inquiry is currently examining the likely efficacy of such an approach to identifying a payment rate consistent with current community expectations and living standards.

Traditionally, income support payments were viewed as a means of promoting social cohesion, relieving poverty, and enhancing opportunities for low income and disadvantaged people. This implied a belief that poverty was related to unfair social and economic structures.

Of course, there was always a diverse range of views within the major parties around finding the right balance between advancing social rights and including incentives to promote individual self-reliance. But even leading conservatives within the Fraser and Howard Coalition Governments accepted that there was a community or government responsibility to actively assist the less fortunate. However, the current government seems to construct income support in narrow neoliberal ideological terms as little more than a means of promoting workforce engagement with the aim of reducing the numbers of able-bodied workforce-age people claiming payments.

There is a lot of rhetoric about controlling and disciplining the poor via conditionality measures such as the Cashless Debit Card and the new drug testing trial and few if any statements about helping or empowering disadvantaged individuals and groups.

As reflected in the current government inquiry into Intergenerational Welfare Dependence the government seems to narrowly construct disadvantage as the result of individual behaviour such as poor choices and a limited work ethic or what they label welfare dependence.

Welfare dependence is a popular term often used in the News Corp media to depict the increasing (and prolonged) financial reliance of individuals or families on income support payments for their primary source of income. Neoliberals construct welfare recipients as holding fundamentally different values and attitudes to the rest of the community. Dependence on welfare is interpreted as an addiction not dissimilar to that of helpless dependence on drugs, alcohol or gambling.

Neoliberals believe the state should act to motivate and discipline welfare recipients, and reintegrate them with mainstream social values and morality, such as self-reliance and the work ethic. Income support should shift from being a right or entitlement to a privilege. Welfare dependent individuals should be given incentives to choose employment over welfare.

Yet in the real world there is no serious evidence that such an indeterminate psychological concept of illness or addiction exists. Rather, it assumes an ideal world in which anyone who wants work can find work at a living wage, and all citizens enjoy equal opportunities from the time of birth. In contrast, the real world is based on social and economic inclusion and exclusion, and fundamental inequities. The American political scientist, Professor Sanford Schram, Professor of Political Science at Hunter College in New York, has recently published a detailed book chapter titled "Neoliberalizing the welfare state" which exposes the absurdity of this term being used in an attempt to medicalize a debate that to the contrary reflects deep seated political and ideological contention around the causes of social disadvantage.

In fact, what we are arguably talking about here is chronic material disadvantage. That is why some individuals or families have an increased and prolonged reliance on income support payments for their primary source of income. The recent ACOSS report on Poverty confirmed that in 2015-16, 3.05 million people or 13.2 % of the population, were estimated to live below the poverty line.

On the basis of years of research with disadvantaged populations – particularly young people who grow up in out of home care who are a particularly vulnerable group due to the failure of all Australian States and Territories to currently provide ongoing support once they turn 18 years of age – I would argue that outcomes for such groups reflect the connection between two key factors: one is their Individual Agency or resilience (within a social context), and the second being the availability or otherwise of positive relationships via what we call Social Capital through professional and informal support networks.

Those young people and families who overcome disadvantaged backgrounds mostly do so because individuals and/or groups in their local community provide support that gives them opportunities to access education, training, employment, and other social and economic resources that otherwise would not have occurred, and enhances rather than limits their individual choice and agency including particularly their capacity to participate in the social and economic mainstream.

If the debate is about the adequacy of payments to relieve poverty and promote agency, then there is no doubt that ACOSS, and allies such as the Australian Greens, are correct in arguing that Newstart is too low at $545 per fortnight to meet basic needs such as housing, food, utility payments, transport, clothes etc. It also inhibits job search because people may be unable to afford suitable clothes for interviews, or pay for transport either to travel to interviews or to attend skills training, or access the Internet to identify job opportunities.

This is not to say that all Newstart claimants are the same. Those who are long-term unemployed (which is more than 60 per cent of the total number) are more likely to be living in acute poverty. Some will come from severely disadvantaged backgrounds such as those who grew up in state out of home care, and may have few, if any, family or community supports to fall back on. In contrast, those who are unemployed for shorter periods – and particularly if they are able to rely on family support – may be able to manage.

But we currently know very little about the varied needs and experiences of the unemployed or other income support recipients because governments rarely if ever survey or consult service users, or conduct serious research on what works to help people move from long-term welfare reliance to sustainable employment. So oddly we spend large amounts of money without much evidence as to whether or not welfare payments or services are actually benefiting those who use them – assuming that is what governments want them to do.