The Commission of Audit has laid bare the neoliberal agenda driving the Abbott government’s assault on Australia’s welfare safety net. Be afraid. Be very afraid.
One of the most refreshing aspects of the entirely dismal Commission of Audit report released last week is the debate it has sparked about the future of Australia’s social contract. As many New Matilda readers would already know, the report itself wants to rip up most of Australia’s welfare state. The scale and severity of its recommendations are breathtaking.
In order to fix an imaginary problem in the form of a budget “emergency” that doesn’t exist, Tony Shepherd and his partners in crime want to tear yawning holes in the Australian social safety net. Ending Medicare as we know it, lowering payments for the age pension and other benefits, punitive new conditions for Newstart and lowering the minimum wage are just the beginning. Also recommended: abandoning the Gonski schools reforms, slashing foreign aid, and removing Commonwealth support for homelessness altogether. The National Disability Insurance Scheme will be delayed before it even starts.
Perhaps the nastiest phrase in a very mean and nasty report was the Audit’s claim that it would continue to protect the “truly disadvantaged”. While everyone can agree that the government should “target public assistance to those most in need,” as the report argues, the rest of the Audit makes it clear that those currently in need will have to make do with less. In some cases, much less.
The report’s recommendations around the minimum wage are perhaps the best, and most frightening, example. Despite having no mandate to examine wages — they were not part of its ambit as set down by the Abbott government — the report recommends sweeping changes to Australia’s century-old system of setting an adequate minimum wage.
In recommendation 28, the report states bluntly that "Australia’s minimum wage is high by international standards". The Audit recommends that the wage be set at a new benchmark, much lower than current levels. It would also be allowed to vary nationally on a state-by-state basis, meaning that low-paid workers in Tasmania, for instance, would earn far less than their counterparts in Western Australia. With precisely zero discussion of the complex economics literature on the employment effects of minimum wage rates, the report simply says that this would “improve job opportunities.”
Monash University’s Veronica Sheen suggests that this would mean a huge drop in the minimum wage. “If the Commission of Audit’s recommendation is implemented, the current minimum wage of $622.20 per week would be reduced to $488.90 per week,” she calculates.
There’s a cruel logic to such recommendations. If someone working on the minimum wage is “truly” disadvantaged now, what will they be after losing a quarter of their income?
Perhaps the most alarming aspect of the Commission of Audit report is how little consultation it appears to have undertaken with the people its sweeping recommendations would affect.
The Commission’s embarrassing error regarding how many times Australians actually visit the doctor has already been exposed: rather than the average Australian visiting the GP eleven times a year, as Shepherd and the Commission claim, the true figure is below six. This and other mistakes led the Australian medical Association’s Steve Hambleton to say simply that “the Commissioner's recommendations are really uninformed by medical opinion".
Similarly, when it comes to the Commission’s savage cuts to welfare provisions, there is no evidence it consulted the available evidence on the impacts of such austerity. The Australian Council of Social Services, for instance, put in a comprehensive and academically rigorous submission to the Commission of Audit. It was completely ignored.
If the Commission failed to talk to social policy experts, doctors, or the welfare sector, there seems little chance that it talked to ordinary Australians making do at the margins of our economy.
Perhaps that’s because if Tony Shepherd and his mates really confronted the hardships encountered by ordinary Australians trying to support themselves and their families on low incomes, they might have been forced to rethink their devastating austerity measures.
What is life like for Australia’s poorest? An important new report by Anglicare, released this week, gives us a glimpse.
Anglicare’s sixth annual State of Sydney report chronicles the struggles of our fellow Australians living on low incomes in our biggest city. Unlike the Commission of Audit, it is based on hard evidence: more than 40,000 people who came into contact with Anglicare across 108,051 visits.
The statistics are sobering. Anglicare says two-thirds of the households it dealt with are getting by on a combined income of less than $500 a week. 30 per cent are earning less than $300 a week. A quarter had someone with a disability. Anglicare says its encountered almost 5000 households experiencing homelessness. One in 10 families with children were living in “squats, refuges, cars, on the street, in boarding houses, in emergency hotel/motel accommodation or staying with friends.”
The plight of those trying to survive in Sydney’s tough private rental market was especially concerning. According to Anglicare’s Sue King, “rental affordability was a big issue”. King cites figures from the research indicating that 32 per cent of all households surveyed were in “severe rental stress, spending more than 45 per cent of their income on rent”. Could households like this afford $15 to visit the doctor?
The Anglicare report should be compulsory reading for any politician or business leader advocating for deep cuts to government services. It also puts paid to hoary clichés like the argument that the poor in Australia are not “absolutely” poor, and are just earning low incomes relative to the majority. The Anglicare data reveals a picture of a significant underclass of Australians who cannot afford to put food on the table, let alone pay their utility bills. Anglicare says 48 per cent of all visits to their emergency centres resulted in a food card hand-out, and 45 per cent in a food hamper. Millions of dollars were also handed out in vouchers for gas and electricity accounts.
What were the risk factors for what Anglicare calls “deep disadvantage”? Top of the list was low income. Second was unemployment. Third was being a single parent. Fourth was housing insecurity.
The Commission of Audit is doing us all a favour with its unabashed honesty. The veil of rhetoric has dropped, and we can see the assault on our community’s poorest and most vulnerable people for what it is. No wonder many in the community are scared. We should be.