A Whiff of Compassion: The Attack on Mutual Obligation

RUDD GOVERNMENT MAKING IT MORE ATTRACTIVE TO CLAIM WELFARE

The Rudd government is planning to water down the existing work requirements and mutual obligation policies that have helped unemployed people find jobs.

A report released today by the Centre for Independent Studies, A Whiff of Compassion: The Attack on Mutual Obligation, by Professor Peter Saunders warns that welfare lobbyists have convinced the new Labor government to water down mutual obligation requirements, which will worsen already high welfare dependency levels.

“In Australia 1.7 million working age jobless people claim welfare payments at a cost around $20 billion a year, or 10% of GDP. Mutual obligation requires these people to undertake a prescribed activity or forfeit some or all of their payment” says Saunders.

“Mutual obligation has had a positive impact in moving people from welfare to work. It is popular with the public, but many welfare advocates regret the move away from the principle of unconditional welfare rights. These critics oppose the financial penalties imposed on welfare claimants who breach the conditions of mutual obligation activities required of them. They oppose suspension of welfare benefits and say nobody should be penalized if it causes hardship.”

The new Rudd government has announced changes which threaten to undermine mutual obligation:

• Greater discretion for Job Network agencies in reporting ‘participation failures’
• An end to automatic 8 week suspensions for claimants who record three ‘participation failures’ within 12 months (they will now be ‘reviewed’ instead)
• Financial penalties will not be imposed in cases where this might cause hardship
• Part-time work requirements for single parents will be eased

“Work for the Dole which is proven to move people from welfare to work is being rolled back, while training, which is known to be ineffective in most cases, is being substantially increased. This makes no sense.”

• Work for the Dole, which currently begins after six months of unemployment, will not now begin until 12 or 18 months (and in some cases even longer than that).
• Claimants who are not considered ‘job ready’ will receive training and/or special assistance for at least 12 months.

“The result of all these proposed changes will be higher government spending yet worse outcomes in moving people from welfare into jobs. The government should think again."

A Whiff of Compassion: The Attack on Mutual Obligation is available online at www.cis.org.au

Professor Peter Saunders is Social Research Director at the Centre for Independent Studies
He is available for comment. This is Peter’s last paper for CIS before he returns to the UK.

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