Defend the welfare state from government attacks

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Make big business pay for the economic crisis

Big business is pushing for a major overhaul of welfare spending in Australia. As the mining boom tapers off, employers know that pressure will be brought to bear on the federal budget. Far from businesses sacrificing some of their profits, by paying more tax, they want the government to cut spending instead.

Editorial comment from the August edition of The Socialist

The recent budget is a pro big business budget in that it slashes spending from areas that impact working people the most – health, education and welfare. At the same time corporate welfare is left largely untouched while taxes on company profits are actually reduced.

In effect the budget, and the further changes being touted, are designed to make ordinary people to pay for an economic crisis that was not of their making.

In late June the government released a review into the welfare system that advocates pushing thousands of people currently receiving the Disability Support Pension (DSP) onto lower payments. Only those with permanent disabilities would have access to the pension.

Another proposal would see ‘income management’ expanded. Income management or ‘welfare quarantining’ was originally rolled out in remote Aboriginal communities in the Northern Territory but now it is set to be expanded to other disadvantaged working class communities. People’s payments would be ‘quarantined’ to be spent only at certain places to pay for rent, food, utilities and other bare essentials.

‘Work for the Dole’ would also be expanded with people receiving the Newstart payment required to work for 15 hours a week in order to be eligible for the unemployment benefit. This scheme currently operates at 18 trial sites around Australia and is set for a national rollout in July next year.

These proposals are in addition to changes put forward in the recent budget whereby retirees would not be eligible for the aged pension until the age of 70 and those aged under 30 would be forced to wait up to six months before they receive unemployment benefits.

People under 25, the group currently experiencing the highest levels of unemployment, would not be eligible for the Newstart payment and instead would have to apply for the Youth Allowance which is about $100 less a fortnight.

The government also wants to freeze Newstart and Youth Allowance payments for the next three years and put further oppressive requirements on people to report about the jobs they have applied for.

The mantra from the government is that young people should either “earn or learn”. Their aim is to give the impression that there are jobs out there, but the problem is that young people are just too lazy to go and look for them.

The truth is there are just not enough jobs to go around. Recent figures show that nationwide there are at least five unemployed people chasing each vacant job. Of the jobs that are available they are predominately casual and low paid.

According to the government you should either take insecure work, that often pays poverty wages, or return to study.

If a young person did decide to return to study they would find themselves in a similarly difficult predicament. Austudy payments, like Youth Allowance, are not enough to live on. You would be forced to try and find casual work while studying in order to supplement your income.

To add insult to injury the government’s proposed changes to higher education would see fees significantly increase. Under the changes it would be possible for students to be lumped with a $100,000 debt at the end of the course. Even if you were able to find a job you would be paying off a huge debt for years to come.

Disappointingly, but unsurprisingly, Labor has flagged that they support many of the government’s changes to welfare including cutting family tax benefits and seniors’ health card entitlements. Labor has also signalled it might support proposals to expand income management.

When in office Labor introduced a number of counter reforms to the welfare system themselves. The cuts to single parents pensions were among the most cruel. They also expanded income management in Aboriginal communities and started the process of pushing thousands off the Disability Support Pension.

At the same time Labor also maintained extremely generous levels of corporate welfare for the rich. For example one of their legacies is taxpayer funded diesel subsidies for big mining companies to the tune of $8 billion. Billions more continues to be handed over to big businesses in a myriad of other schemes.

Tony Abbott says “welfare is out of control” in Australia. This is true but it’s not payments to ordinary people that are the problem its corporate welfare that needs to be reined in. When you look at hand outs to big business alongside tax cuts to company profits, it’s not hard to see why the gap between rich and poor has increased so much in recent decades.

In regards to payments made to ordinary people Australia spends a mere 8.6% of its Gross Domestic Product (GDP) on welfare. This is well below the OECD average of 13%. France, Italy and Belgium spend more than 19% while Britain spends 12.2% of GDP on welfare.

In fact welfare spending as a percentage of GDP has decreased in recent years. In 2011, 18.5% of people received some form of welfare payment compared to 23% in 2001. This is not an indication of more secure employment being available instead it is a result of both the major parties undermining the welfare state in recent decades.

Instead of people being entitled to some sort of state support when they are unable to work increasingly people are being forced to rely on family, friends or going in to debt to survive.

Socialists oppose the undermining of the welfare state, including the regressive changes supported by both the major parties. The welfare state was fought for, and won, by trade unionists and socialists who wanted an end to destitution caused by being thrown out of work or getting ill. The idea being that society’s most vulnerable should not be forced to bear the brunt of a crisis created by the capitalist system.

However ever since these gains were made, Liberal and Labor governments, on behalf of their capitalist backers, have sought to wind back payments such as the dole, sickness benefits and the aged pension. In order to maintain our living conditions the working class has to continually fight to defend and improve its gains.

Socialists stand for a society where decent benefits, education, training or work is available to all, without compulsion. Hundreds of thousands more jobs could be made available if the working week was reduced (without a loss in pay) and public investment was made into socially useful things like housing, transport, health and education. Billions more dollars could be raised if taxes on profits were increased.

Side by side with fighting to defend and extend the welfare state, socialists fight to replace the capitalist system with a socialist society that puts people’s needs before profits. This is ultimately the only way to avoid ongoing economic crisis and secure a decent standard of living for all.