Magazine of the Socialist Party, Australian section of the CWI

Tax the rich instead of demonising welfare recipients

As we go to press, the Liberal government is attempting to push the punitive Social Services Legislation Amendment (Welfare Reform) Bill through the Senate. This counter-reform will further punish welfare recipients who already live near or below the poverty line.

The bill is a thinly disguised attempt to shift the economic burden onto those already struggling to make ends meet, and to blame the unemployed for their situation when the real issue is that the profit-driven system cannot provide enough jobs.

The government is attempting to negotiate some minor changes with crossbench senators, but the vast bulk of these senators, including Derryn Hinch, members of Pauline Hanson’s One Nation, and the Nick Xenophon Team all support the main thrust of the bill.

The bill has three key measures which the government hopes will save them $370 million over the next three years. Firstly, unemployed job seekers will have increased compliance demands, meaning they will have to undertake increased ‘work for the dole’ (read: unpaid labour) and job seeking activities.

Secondly, private, often for-profit, job agencies will have unprecedented powers to punish unemployed and underemployed people. They will be able to dock a welfare recipient’s payments by up to a month and there will be no appeal process.

Thirdly, newly unemployed people will be paid from their first job agency appointment rather than their application date. There can be up to a 16 day wait between these two dates. It is likely that this change would lead to longer wait lists and times.

While it is possible that some aspects of the bill are amended in the negotiation process, punitive changes to the welfare system are part of this government’s agenda and they will keep trying to implement similar punitive counter-reforms in order to appease their big business backers.

Since the 2007-08 global financial crisis both Liberal and Labor governments have been under increased pressure from big business to lower company tax rates, provide corporate subsidies and allow wages to be driven down.

They desperately want to get the budget back in surplus so that benefits for the corporate sector can be increased even further. One of the ways the government attempts to do this is by making cuts to social services such as education, healthcare and welfare.

If the process of applying for welfare payments is made more difficult, then people will be more inclined to rely on their partners or family for the period they are out of work.

For instance, people may try to live off their partner’s income, or move back in with their parents until they get back on their feet. This lessens the burden on the budget, freeing up funds to provide ever more company tax breaks.

All workers, whether employed or unemployed, have an interest in opposing these sorts of changes. As the old saying goes, “an injury to one is an injury to all”. Welfare payments were originally won by the workers movement and trade unions should fight to defend and extend the welfare system.

This is a worker’s issue not only because it should be every workers’ right to payments if they are thrown out of work but because, if allowed to go ahead, these changes would put increased pressure on Centrelink workers, as well as social and community services workers.

In addition, ‘work for the dole’, rather than being an incentive or a training opportunity, undermines the jobs of all workers. Why would a boss create a paid job on Award wages when they can get someone to do it for next to nothing?

Socialists demand that these proposals are scrapped and that everyone is guaranteed a living wage, either from a welfare payment or secure employment. It should be the responsibility of the government and employers to ensure that there are enough jobs for everyone.

Its not as if there is no work to be done. We desperately need more public housing, more hospitals, schools and childcare centres. Thousands of jobs could be created by investing in renewable energy. But rather than creating socially useful jobs the government is focused on demonising welfare recipients.

In 2015 the Department of Human Services and the Australian Federal Police launched “Operation Integrity”, to target so called welfare fraud. But where is the taskforce to chase corporate tax dodgers?

If the budget needs to be balanced then the government should be increasing, rather than decreasing company tax rates, and closing the loopholes that make it legal for some of the country’s largest companies to pay no tax at all.

We desperately need a party that will focus on the real issues we face, a party that represents the needs of ordinary people rather than the corporate elite.

By Meredith Jacka