Should we treat all unemployed people equally?

Reward

Conservative governments are strong believers in reward for effort. People, regardless of their circumstances and backgrounds should be rewarded for their effort. So how do the groups compare when they invest equal amounts of time and effort?

Escaping poverty by finding a job is difficult for the long-term unemployed. However the relative success rates of programs such as PSP (Personal Skills Program) and Intensive Assistance, and DEWR’s (Department of Employment and Workplace Relations) recent DSP (Disability Support Pension) trial show the success rates for people with a disability are much lower than the general population. This author’s personal experience and the personal accounts I hear from DSP applicants confirm this.

When an unemployed person able to work full-time applies for a job, they are more likely than a sole parent to be successful. They are much more likely that a person with a disability to succeed, regardless of how skilled and experienced the disabled person is.

If they find work, they will face marginal tax rates up to 75 per cent. People living in public housing may face effective marginal tax rates over 100 per cent. Yet the Treasurer assures us that tax rates of 49 per cent are far too high for the wealthy. If 49 per cent is a disincentive for the rich, how can the Government argue that 65 per cent or more is NOT a disincentive for the poor?

Clearly reward for effort is not equal. Sole parents and the disabled do not experience a level playing field.

So what’s the difference?

The difference between unemployed people, eligible for NSA and the group including sole parents and the disabled is immense. Their capacity is less, their return on investment of this capacity is less, and the personal and financial costs of their disadvantages are higher. They are far less able to escape the poverty trap.

No one denies the abilities of this disadvantaged group, or their genuine capacity to participate. That is why ACOSS and others criticise the paltry level of investment in the positive aspects of the Welfare to Work package. That is why this author believes the problem to be addressed is employer attitudes and incentive. Only when employers are demonstrating their willingness to employ the disabled and offer family friendly part-time work can obligation begin to be considered “mutual”, or fair.

However, in spite of the best efforts of sole parents and the disabled, and in spite of the limited extra investment offered in the reforms, they will continue to experience prejudice, barriers and bias that a simply “unemployed” person will not.

If they are not guaranteed adequate income support, which sufficiently allows for the costs of living, housing, transport, parenting and disability, the inevitable result will be long-term, sometimes lifelong poverty and penury. Unless the government invests significantly in improving access to local, flexible, accessible and financially rewarding work, their best efforts will be unrewarded, or the small gains will barely offset the high costs.

This is the very result the government assures us they want to eliminate. So why not leave pension conditions as they are and invest in positive change? If the government’s proposed programs are so effective, then surely all these disadvantaged people will successfully get jobs and be paying taxes, rather than receiving welfare. Insistence that people be transferred from pensions onto the lower Newstart is a tacit admission that the Government doesn’t really believe its plans will work.

The result will be that the sins of wealthy, out of touch leaders, will be visited on the children of the disadvantaged, and intergenerational poverty will remain entrenched in Australian society. For the disabled and single parents, Australia will be neither lucky, nor clever.