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It's time to stop demonising the social security system

May 11, 2020

IT’S TIME TO STOP DEMONISING THE SOCIAL SECURITY SYSTEM

This piece was first published in The Canberra Times, on Monday 11 May 2020.


The coronavirus pandemic and the Australian government's response has demonstrated the importance of a strong social security system to alleviate poverty and stabilise the economy. This crisis presents an opportunity for us to address inadequacies in the current system by building on its strengths.
 
Historically, our social security system, hand in hand with the decent wages and conditions delivered by our system of wage arbitration, has been crucial to making Australia the relatively egalitarian society we are. As a nation, we take pride in our universal healthcare and public education. A decent social safety net should be seen as a third pillar of equality, but it is something that we don't take that same pride in as a nation. This needs to change.
 
Since March, almost 600,000 Australians have applied for JobSeeker payment, the new name for the unemployment benefit previously known as Newstart allowance. Around 6 million Australians will receive JobKeeper, a $1500 wage subsidy through their employers. This demonstrates the power of social security to keep people out of poverty.
 
Social security is also a powerful tool to eradicate poverty. This was demonstrated by the Hawke government when they chose to reduce child poverty by 80 per cent and by the Gillard government when they chose to lift one million pensioners out of poverty with the largest increase to the pension in its history. Once again, we can make a choice - to ensure that after the pandemic, a decent guaranteed income remains available to people experiencing unemployment.
 
Unfortunately, Prime Minister Scott Morrison has made it clear that he will not be making this choice, designating September 24, 2020 as the day the coronavirus supplement will end and JobSeeker payment will return to the disgracefully inadequate rate of less than $40 a day.
 
Conservatives have long been intent on demonising the social security system and its recipients, but the facts simply don't support their claims the system is out of control or unsustainable. Australia has the most tightly targeted payment system in the OECD - meaning the greatest proportion of money goes to those most in need. The system is complicated, but mostly for good reason. Different types of payments - pensions, allowances, and family payments - serve specific objectives, and together provide a framework that would deliver a strong social safety net. But years of cuts and neglect have meant that payments have become inadequate, with the most glaring example being JobSeeker.
 
The basic rate - $565.70 per fortnight for a single person over 22 - speaks for itself. I don't need to explain why people can't live on $40 a day. But the rate is only part of the problem. Unlike pensions that are indexed to wages, the unemployment benefit and other allowances are indexed to CPI and therefore have fallen well behind community living standards. Further, if a recipient begins to earn income, the payment is reduced by 50 cents for every dollar over $104 per fortnight, then 60 cents in every dollar over $254. They are trapped in poverty.
 
By doubling the JobSeeker rate with the temporary coronavirus supplement the Morrison government has acknowledged that people cannot live on $40 a day. The ugly political reality of this is that the government was only willing to make JobSeeker liveable when a broader group of people would come to rely on it; people who otherwise probably would not have because of economic factors outside of their control.
 
That in itself is a profound acknowledgement from this conservative government that people become unemployed because of structural changes in the economy - not because they weren't "having a go". Unemployment can happen to anyone and by the end of the year it is estimated it will have happened to one million Aussies.
 
In addition to alleviating poverty, by using the social security system to deliver this assistance the Government has also demonstrated how effective the social security system is to stabilise the economy. Labor did this in the Global Financial Crisis, along with using the tax system, when Ken Henry said "Go early. Go hard. Go Households". It worked and hopefully it will again this time. We need to stop demonising the social security system and instead build it up to ensure it can respond to whatever challenges our changing world and struggling economy throws at it.
 
Many are still left outside of the government's assistance - casuals, temporary visa holders, young students, the arts sector - and Labor will continue to advocate for their inclusion.
 
There is a broader opportunity here for Australia too - to put the debates and disinformation of the past to rest, to ensure that our unemployment benefit never returns to inadequacy, and that we as a nation take the pride we should in building a social safety net that protects us all.

This piece was first published in The Canberra Times, on Monday 11 May 2020.

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