No. 36

Standby for more stormwater announcements

STONE the crows – what a crook campaign! The cost of the promises is paltry and the barefaced bribes are few and far between. Last week’s big policy news had both sides announcing more money for storm water drains.[1] And, demonstrating they think they are running for premier of NSW, there was even a law and order auction.[2]

Where, the policy pointy-heads want to know, are the promises to implement the Henry review, expand infrastructure and improve productivity?

Still, it could be worse. The Crows recalls a campaign (their ageing memory dates it to the 1980 election) when the Coalition promised Canberra a grand prix circuit.[3]

Bur there is one big bi-partisan reform on this election’s agenda that neither side is trumpeting. Not because it is going to cost a bucket of money, in fact it will save a small one. The problem is its implications will upset a block of voters, the sort of segment that could decide elections to come.

Both sides of politics are committed to ending the universal, no questions asked, right to welfare. [4] The government’s plan is to quarantine the welfare payments of people in designated areas so that they can only spend them on food and clothes for their kids rather than drink and drugs.

The idea was introduced as part of the Howard Government’s intervention in the Northern Territory to help indigenous children in dysfunctional families where pension payments go on grog, and worse.

That this is happening is surprising enough given the minister now responsible is Jenny Macklin. Macklin’s previous policy achievement was in opposition, running an opportunist campaign in 1997 to stop the Howard Government imposing a bond on high care nursing home residents, designed to deliver capital for the industry to increase capacity. [5]

But now she is undertaking a profound reform, which could lay the foundation for a transformation of welfare. Here’s what she said when the Senate passed her legislation to extend quarantining beyond indigenous people to cover everybody in the Northern Territory, with other areas of the county to come:

The reforms aim to increase parental responsibility, fight passive welfare and protect vulnerable people especially children. … (they) link income management to promoting responsible behaviours like participation in work and training and ensuring children attend school. It ensures that more welfare is spent on the interests of children on life essentials, including, food clothes and housing costs, and less welfare goes to problem behaviours like gambling and alcohol abuse.[6]

The legislation covers people supported under 20-plus programs, from youth allowance to the age pension. And it drives the welfare industry nuts. Initially indigenous Australians were upset and understandably so. Under the intervention quarantining breached the Racial Discrimination Act by only applying to Aborigines in remote communities.  But now it is colour blind the uproar from the industry will intensify.

The general arguments are those every industry uses when it fears losing taxpayer subsidies. First they claim the reforms will not work. The Menzies School of Health Research said a survey found the first income management program intended to ensure “people receiving welfare payments use this money in a government-prescribed ‘socially responsible” way’ ” did not work. “Our findings suggest that income management may not be associated with healthier food and drink purchases, and may be having no effect on tobacco sales.” [7]

And (what a surprise) what people needed was more money: “These findings suggest that, without an actual increase in income (as occurred with the government stimulus payment), income management may not modify people’s spending habits in a positive way.”[8]

More broadly activists argue that income management is unkind to their clients.

According to the Salvation Army: “this approach is likely to reinforce feelings of low self-worth, stigmatising people and demoralising them further. In our experience, mandated and/or coercive programs do not help people to become more resilient. Rather they emphasise perceptions of inadequacy and failure.” [9]

But people who make their living speaking up for the poor have much more to worry about than their clients’ hurt feelings. The Macklin reforms are an overt end to the idea that welfare is an entitlement without reciprocal obligations, that the state has no right to expect anything in return – even to ask parents to protect their children.

Macklin’s plan extends the argument that welfare is not a lifestyle the state should support for all but the aged and disabled. According to law academic Terry Carney, for people in most welfare categories, “the primary role of social security payment is to impose a set of conditions (backed by a strong compliance regime) which serves to oblige people to accept any job, of almost any duration or terms, which the labour market generates.”[10]

And there is not much of a step from the state forcing parents to get off the grog to demanding that they find work of some kind, if only to give their children an understanding that employment, not indolence is the norm.  It is impossible to imagine governments not wanting to address this given that more than one in ten Australians under 15 lives in households where no one works.[11]

Bill Clinton’s social security reforms, which pushed people, mainly single mothers, off welfare and into the workforce presents a precedent. It was immensely unpopular with Democrats but Clinton claims he cut the number of people receiving welfare from 12 million to 4 million in the decade to 2006. [12]

But there is one very good reason why Jenny Macklin, or whoever is minister after the election, will not extend quarantining welfare payments, especially to the enormous numbers of single mothers who cannot convince bureaucrats (and there’s a scary thought) they are trying hard enough to get a job – the fact there is around a quarter of a million of them.[13]

And they are politically powerful. Before the last election George Megalogenis identified 15 battleground coalition seats with more than the national electorate average of 16.3 per cent of single supporting mothers. And they were annoyed by the way the Howard Government tightened the work test for their pension. [14]

They are still there; they still vote and imagine how they would feel if they thought there was even a chance what they could spend their welfare on was quarantined to encourage them to find work.

Which is why the only reform on the agenda in this election will not go any further. It’s all very well to penalise indigent drunks but neither side wants to annoy a big block of voters with a strong sense of entitlement.

The Crows can’t wait for more stormwater announcements.

stephen4@hotkey.net.au


[1] Emma Rodgers, “Gillard promises $100 million for stormwater projects” ABC News Online, July 29 2010 @www.abc.net.au/news/stories/2010/07/28/2966148.htm, AAP, “Tony Abbott promises $16.5 million for stormwater harvesting” Herald Sun, July 30

[2] Phillip Hudson, “Parties face off for knife fight”, Herald Sun, July 29 ,

[3] This pinnacle of policy is largely forgotten but Canberra politician Bill Stefaniak bemoaned it never revved ahead in the ACT House of Assembly on October 12 1994 @www.hansard.act.gov.au/hansard/1994pdfs/19941012.pdf recovered on July 27

[4] John Kehoe, “Tougher rules for long-term jobless”, Australian Financial Review, July 28, Matthew Franklin, “Abbott pushes welfare quarantining” The Australian, July 28

[5] “The Opposition spokeswoman on aged care, Ms Jenny Macklin, said the Government was intent on making people use the value of their homes to make up for the $500 million it cut from aged care in the last Budget.  ‘The health needs of older Australians are being used by this Government to wring from them the few dollars they have – and just replace the money (Prime Minister) John Howard has cut from aged care,’  Ms Macklin said. ’’ Adrian Rollins, “Fog still shrouds aged-care policy”. The Age, November 18 1997

[6] Jenny Macklin, “Major welfare reforms to support vulnerable Australians”, July 22 @www.jennymacklin.facsia.gov.au/mediareleases/2010/pages/welfare_reforms recovered on July 8

[7] Julie K Brimbelcombe et al, Impact of income management on store sales in the Northern Territory, May 16 @ ww.menzies.edu.au/sites/menzies.edu.au/files/file/media%20releases%202010/Brimblecombe_Embargo%20Copy.pdf

[8] Menzies School of Health Research Media Release, “Welfare Quarantining May Not Lead to Healthier Purchases in Indigenous Community Stores” May 16 @ http://menzies.edu.au/sites/menzies.edu.au/files/file/MR%20

[9] (quoted in) Adele Horin, “Not helping them back on their feet”, Sydney Morning Herald, March 20

[10] Terry Carney, Welfare reform? Following the ‘work-first’ way (Brotherhood of St Laurence, 2007)

[11] Australian Bureau of Statistics, Labour Market Statistics: Jobless Families, January 2009 @ abs.gov.au/AUSSTATS retrieved on July 28

[12] Bill Clinton, “”How we ended welfare together”, New York Times August 22 2006

[13] Australian Bureau of Statistics, Australian Social Trends: Jobless Families (December, 2009) @ www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features10Dec+2009 recovered on 28 July

[14] George Megalogenis, “Battlers who will shape the poll” The Australian, August 20 2007

Standby for more stormwater announcements

STONE the crows – what a crook campaign! The cost of the promises is paltry and the barefaced bribes are few and far between. Last week’s big policy news had both sides announcing more money for storm water drains.[1] And, demonstrating they think they are running for premier of NSW, there was even a law and order auction.[2]

Where, the policy pointy-heads want to know, are the promises to implement the Henry review, expand infrastructure and improve productivity?

Still, it could be worse. The Crows recalls a campaign (their ageing memory dates it to the 1980 election) when the Coalition promised Canberra a grand prix circuit.[3]

Bur there is one big bi-partisan reform on this election’s agenda that neither side is trumpeting. Not because it is going to cost a bucket of money, in fact it will save a small one. The problem is its implications will upset a block of voters, the sort of segment that could decide elections to come.

Both sides of politics are committed to ending the universal, no questions asked, right to welfare. [4] The government’s plan is to quarantine the welfare payments of people in designated areas so that they can only spend them on food and clothes for their kids rather than drink and drugs.

The idea was introduced as part of the Howard Government’s intervention in the Northern Territory to help indigenous children in dysfunctional families where pension payments go on grog, and worse.

That this is happening is surprising enough given the minister now responsible is Jenny Macklin. Macklin’s previous policy achievement was in opposition, running an opportunist campaign in 1997 to stop the Howard Government imposing a bond on high care nursing home residents, designed to deliver capital for the industry to increase capacity. [5]

But now she is undertaking a profound reform, which could lay the foundation for a transformation of welfare. Here’s what she said when the Senate passed her legislation to extend quarantining beyond indigenous people to cover everybody in the Northern Territory, with other areas of the county to come:

The reforms aim to increase parental responsibility, fight passive welfare and protect vulnerable people especially children. … (they) link income management to promoting responsible behaviours like participation in work and training and ensuring children attend school. It ensures that more welfare is spent on the interests of children on life essentials, including, food clothes and housing costs, and less welfare goes to problem behaviours like gambling and alcohol abuse.[6]

The legislation covers people supported under 20-plus programs, from youth allowance to the age pension. And it drives the welfare industry nuts. Initially indigenous Australians were upset and understandably so. Under the intervention quarantining breached the Racial Discrimination Act by only applying to Aborigines in remote communities. But now it is colour blind the uproar from the industry will intensify.

The general arguments are those every industry uses when it fears losing taxpayer subsidies. First they claim the reforms will not work. The Menzies School of Health Research said a survey found the first income management program intended to ensure “people receiving welfare payments use this money in a government-prescribed ‘socially responsible” way’ ” did not work. “Our findings suggest that income management may not be associated with healthier food and drink purchases, and may be having no effect on tobacco sales.[7]

And (what a surprise) what people needed was more money: “These findings suggest that, without an actual increase in income (as occurred with the government stimulus payment), income management may not modify people’s spending habits in a positive way.”[8]

More broadly activists argue that income management is unkind to their clients.

According to the Salvation Army: “this approach is likely to reinforce feelings of low self-worth, stigmatising people and demoralising them further. In our experience, mandated and/or coercive programs do not help people to become more resilient. Rather they emphasise perceptions of inadequacy and failure.” [9]

But people who make their living speaking up for the poor have much more to worry about than their clients’ hurt feelings. The Macklin reforms are an overt end to the idea that welfare is an entitlement without reciprocal obligations, that the state has no right to expect anything in return – even to ask parents to protect their children.

Macklin’s plan extends the argument that welfare is not a lifestyle the state should support for all but the aged and disabled. According to law academic Terry Carney, for people in most welfare categories, “the primary role of social security payment is to impose a set of conditions (backed by a strong compliance regime) which serves to oblige people to accept any job, of almost any duration or terms, which the labour market generates.”[10]

And there is not much of a step from the state forcing parents to get off the grog to demanding that they find work of some kind, if only to give their children an understanding that employment, not indolence is the norm. It is impossible to imagine governments not wanting to address this given that more than one in ten Australians under 15 lives in households where no one works.[11]

Bill Clinton’s social security reforms, which pushed people, mainly single mothers, off welfare and into the workforce presents a precedent. It was immensely unpopular with Democrats but Clinton claims he cut the number of people receiving welfare from 12 million to 4 million in the decade to 2006. [12]

But there is one very good reason why Jenny Macklin, or whoever is minister after the election, will not extend quarantining welfare payments, especially to the enormous numbers of single mothers who cannot convince bureaucrats (and there’s a scary thought) they are trying hard enough to get a job – the fact there is around a quarter of a million of them.[13]

And they are politically powerful. Before the last election George Megalogenis identified 15 battleground coalition seats with more than the national electorate average of 16.3 per cent of single supporting mothers. And they were annoyed by the way the Howard Government tightened the work test for their pension. [14]

They are still there; they still vote and imagine how they would feel if they thought there was even a chance what they could spend their welfare on was quarantined to encourage them to find work.

Which is why the only reform on the agenda in this election will not go any further. It’s all very well to penalise indigent drunks but neither side wants to annoy a big block of voters with a strong sense of entitlement.

The Crows can’t wait for more stormwater announcements.

stephen4@hotkey.net.au


[1] Emma Rodgers, “Gillard promises $100 million for stormwater projects” ABC News Online, July 29 2010 @www.abc.net.au/news/stories/2010/07/28/2966148.htm, AAP, “Tony Abbott promises $16.5 million for stormwater harvesting” Herald Sun, July 30

[2] Phillip Hudson, “Parties face off for knife fight”, Herald Sun, July 29 ,

[3] This pinnacle of policy is largely forgotten but Canberra politician Bill Stefaniak bemoaned it never revved ahead in the ACT House of Assembly on October 12 1994 @www.hansard.act.gov.au/hansard/1994pdfs/19941012.pdf recovered on July 27

[4] John Kehoe, “Tougher rules for long-term jobless”, Australian Financial Review, July 28, Matthew Franklin, “Abbott pushes welfare quarantining” The Australian, July 28

[5] “The Opposition spokeswoman on aged care, Ms Jenny Macklin, said the Government was intent on making people use the value of their homes to make up for the $500 million it cut from aged care in the last Budget. ‘The health needs of older Australians are being used by this Government to wring from them the few dollars they have – and just replace the money (Prime Minister) John Howard has cut from aged care,’ Ms Macklin said. ’’ Adrian Rollins, “Fog still shrouds aged-care policy”. The Age, November 18 1997

[6] Jenny Macklin, “Major welfare reforms to support vulnerable Australians”, July 22 @www.jennymacklin.facsia.gov.au/mediareleases/2010/pages/welfare_reforms recovered on July 8

[7] Julie K Brimbelcombe et al, Impact of income management on store sales in the Northern Territory, May 16 @ ww.menzies.edu.au/sites/menzies.edu.au/files/file/media%20releases%202010/Brimblecombe_Embargo%20Copy.pdf

[8] Menzies School of Health Research Media Release, “Welfare Quarantining May Not Lead to Healthier Purchases in Indigenous Community Stores” May 16 @ http://menzies.edu.au/sites/menzies.edu.au/files/file/MR%20

[9] (quoted in) Adele Horin, “Not helping them back on their feet”, Sydney Morning Herald, March 20

[10] Terry Carney, Welfare reform? Following the ‘work-first’ way (Brotherhood of St Laurence, 2007)

[11] Australian Bureau of Statistics, Labour Market Statistics: Jobless Families, January 2009 @ abs.gov.au/AUSSTATS retrieved on July 28

[12] Bill Clinton, “”How we ended welfare together”, New York Times August 22 2006

[13] Australian Bureau of Statistics, Australian Social Trends: Jobless Families (December, 2009) @ www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features10Dec+2009 recovered on 28 July

[14] George Megalogenis, “Battlers who will shape the poll” The Australian, August 20 2007

'2012