Low benefits' curse is a long legacy of poverty

Mar 28, 2012

There is no fair go for today's jobless and the next generation.

POLITICIANS go out of their way to show they care about helping working families make ends meet. But what about people who subsist in ''non-working families''? They are really ''hurting'', missing out on life's essentials, as The Age reported yesterday. Politically, though, jobless people may as well be invisible.

Amid routine updates on unemployment rates, the jobless' struggle with basic living costs is all but ignored. On the eve of its national conference tomorrow, the Australian Council of Social Service released a study that confirms the depths of poverty to which the unemployed and sole parents have sunk. It shows 61 per cent of Newstart recipients and 58 per cent of those on the parenting payment are missing out on three or more essentials. Only 12 per cent of age pensioners and 15 per cent of all households are similarly deprived.

Almost one in four people on Newstart and the parenting payment could not afford a decent, secure home. More than 40 per cent could not pay a dentist; they live with rotten teeth. High proportions could not pay utility bills on time. Poverty levels were three to five times greater than among age pensioners, who were doing better than working households on some measures after receiving $32-a-week increases in 2009. ''The worst poverty is found in the last places that governments have looked,'' the report says. ''Pension payments are frugal but unemployed people and sole parents have to get by on much less.'' The gap of up to $133 a week between the lowest benefit and the age pension is the biggest in three decades, and Newstart's less generous indexation means it is widening all the time.

This would be bad enough if only jobless adults were involved, but Australia has more than 300,000 jobless families with children under 15, a rate that is among the worst in the OECD. These nearly 600,000 children are not in any way responsible for their families' low income, but their deprived circumstances ensure disadvantage passes from one generation to the next. Poor housing and diet compromise children's wellbeing and development. They cannot afford to participate fully in school and social activities. According to the ACOSS study, more than one in four children in these families cannot afford to pursue a hobby or leisure activity.

The low Newstart rate has been justified by the claim that it is only meant to tide people over until they find work. The ACOSS study discredits that justification. Almost two in three Newstart recipients receive the benefit for more than a year and one in five is hampered by a disability. The vast majority of jobless families are headed by single mothers. Being both main breadwinner and carer is obviously difficult.

The Australian Social Inclusion Board reported to the Gillard government on these difficulties last year. It noted that 52 per cent of jobless families were persistently jobless for the three years to March 2010. They also did not recover as well as other households after the global financial crisis.

The implications, for the children in particular, demand an immediate policy response. The federal budget may be tight, but the government feels able to compensate millions of low to middle-income taxpayers for the carbon tax's cost-of-living impact. Crude electoral considerations almost certainly explain its policy priorities. One in five eligible voters is of pension age and the proportion is rising. Only about one in 25 voters is jobless. They are a disadvantaged minority, but the long-term impacts of socioeconomic deprivation should worry us all.

A more far-sighted and com- passionate society would never have let welfare recipients sink to levels of poverty that shame a rich country like ours. Even on purely economic grounds, an ageing, skills-hungry society cannot afford to stifle the potential of more than half-a-million young lives. The case for lifting unemployment and parenting benefits to a level that covers basic living costs is clear. The government should do this in the May budget.

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