Wednesday, April 24, 2013

Labor's 'last best chance' to prevent a 'downwards spiral' of austerity

above:  As Finance Minister Penny Wong is well-placed to attempt to 'head off' any strategy of unnecessary austerity for Labor's May Federal Budget.  Penny, Please stand up for what it right!
Tristan Ewins
Dear Readers: I wrote the following after the government’s announcement that it was cutting back higher education funding in order to pay for a much-reduced version of the Gonski education reforms in the May Budget:

As to what is determining Labor’s behaviour – I think there was an element of cynical opportunism when it came to Sole Parents.  (playing on peoples’ prejudices – but ultimately causing more self-harm in the process – by losing credibility with parts of its base… )

But on Gonski I think it’s a bit more complex.  I think – as a friend of mine said a short way back – that Labor is ‘curling up into a ball’ in the face of attacks from powerful vested interests.  Hence the collapse on superannuation concessions – ie: tax shelters for the rich; on the Minerals Resource Rent Tax; and now the retreat on Gonski. 

It seems they would rather compromise their core ‘signature’ policies then take on the powerful and wealthy vested interests…  And what they don’t seem to grasp is that this does not win respect over the long term.  It only makes our adversaries more confident, brazen and aggressive in their attacks on what remains of the welfare state, the tax-transfer system, the social wage….  IN short – If we never fight -  It means we almost completely lose control of the discourse over the long term.  We all but completely lose control over the definition of the prevailing ‘common sense’ on everything from tax to industrial relations, and social expenditures, infrastructure and welfare…  The Conservatives get their way no matter which party governs….  Failure to defend social justice, progressive taxation, the principle of redistribution  - will mean the self-liquidation of Australian social democracy unless someone else steps into the breach.  And the Greens could not achieve that on their own either.

But that said there IS progress for state education if Labor’s policies go through….  The means of paying for it are regressive; But it is still a more progressive overall outcome than what we already had…  Students – including students from low income backgrounds – will have to repay ‘start-up scholarships’.  This is bad.  Though it is mainly students from higher income backgrounds that will lose out from the decision to prevent them paying their HECS fees up-front.  And at least repayment will be deferred.   (the obvious question now being where the repayment threshold is set) 

Regardless, though, it is a Positive-Sum Affair for disadvantaged students taken overall  – many of whom would never enjoy the opportunity of tertiary study were it not for this re-ordering of priorities.  Hence additional resources for indigenous, disabled, non-English speaking and poor-literacy students – and the ‘Lion’s Share’ going to state schools.

In short – this policy could also be crucial in stemming the drift of students to private schools to the point of ‘critical mass’ – where otherwise the state sector would become permanently second-class and residual.  The policy inflicts an injustice on tertiary students –but will provide opportunities for many who otherwise would never have a hope of a tertiary education; or even of making the most of Year 12.

The policy involves about half the resources that Labor originally promised, also.  Much is expected of the States given their finances.  The States should not be obstructionist – or blur the issues.  But while they are low on cash themselves – the logic of events could lead to user-pays infrastructure inflicted on us by the State Governments.  The states should promote the cause of federal tax reform to make all this unnecessary  – but it seems they are only interested in increasing the GST and removing exemptions for food  – as today’s conservatives  seem to ‘believe in principle’ in flat taxation that hits the poor hard.   Apparently this Ideology is not “class warfare” but anything else even mildly progressive is...

All this also begs the question what is going to happen to the National Disability Insurance Scheme (NDIS).  Tony Abbott says he supports it.  But Of course he will have no problem ‘neutralising’  the issue by paying for the program with savage austerity against the apparently ‘undeserving’ poor – for example the unemployed; and possibly against mentally ill recipients of Newstart deemed able to do ‘some’ work.  Where Labor would get the money from is anyone’s guess.  But with a price-tag in the vicinity of $15 billion/year to implement the policy I am afraid we are going to ‘squib’ the issue again by only half implementing the policy; and projecting full implementation into a distant future that may never come.

Labor would be more credible if they stood up on these signature policies even if it means abandoning the idea we can have a ‘Positive Sum Affair’ FOR EVERYONE.  Again this is the myth cultivated with the whole ‘social justice equals class warfare’ discourse. ( ie: that ‘the state should get out of the picture’)   This is sold as a liberal principle and ironically it exploits past Australian egalitarian traditions and self-image.  But in fact this discourse rests firmly on the interests of the wealthy; who seek to divide us all against each other on the basis of an economically Liberal Ideology, ‘downwards envy’ and other prejudices.

THAT outcome (ie: squibbing on NDIS) is what we need to agitate and mobilise against as the 2013 May Federal Budget approaches.  Without an assertive, confident and progressive Labor the task will become all the more difficult for the government, and  Labor will not be able to inspire activists, trade unionists, environmentalists into the kind of on-the-ground campaigning which alone can counter Abbott’s advantage of uncritical and biased monopoly mass media coverage . It could actually be a more difficult task, in fact, than had they stood up to the vested interests in the first place.

Finally: now that we have ‘squibbed’ on the issue of superannuation concessions even centre-left commentators like Tim Colebatch are arguing that significant austerity cannot be avoided.  But let’s be clear: Compared to other OECD countries we have small government in Australia.   By some estimates removing ‘middle class welfare’ could save a few  billion; but this pales in significance to the money that could be saved by winding back superannuation concessions for the top 5%-10% income demographic, and by reducing dividend imputation – just for a start.  Instead  of conceding the logic and the agenda of austerity rather Labor and the Left need to go on to the front foot and move towards an extension of social welfare for the most disadvantaged and the most vulnerable….  Aged Care is perhaps the most vital area where action is necessary – when one considers the regressive nature of existing user-pays mechanisms – and the sheer extremity of the human suffering by these amongst our most vulnerable citizens….

Tony Abbott apparently has a Democratic Labor Party background if you trace it back far enough…  And while the DLP and the NCC did untold damage to the ALP during the years of the split, you would at least expect from them a  ‘Catholic social welfare’ outlook with a measure of compassion for the poor.  Some have commented that towards the end of his life B.A Santamaria realised that in facilitating the neo-liberal hegemony the DLP did more damage to its cause then had ever been inflicted on them by the Left.   And now Abbott himself promises to be the bearer of previously unheard of austerity.    

It is not only Labor that needs to search its conscience when it comes to the treatment of the vulnerable, including Sole Parent families.  Abbott could have used his leadership of the Liberal Party to lead it down the path of ‘compassionate conservatism’ after the fashion of the immediate-post-war German Christian Democrats.  Instead the disabled and the unemployed stand to suffer, and one can only speculate where else the axe may fall when it comes to further austerity in the Ideological pursuit of ever-smaller government.   The American-style rhetoric against practically any and all social investment is incessant – with no regard for the human consequences when the time comes to put this rhetoric into action…   The rights of the Aged don’t seem to be ‘factoring in’ with either of the major parties, and nor do we hear much from the Greens on that issue as well.

For both Abbott and Labor – Search your consciences when it comes to austerity and the rhetoric of  small government.  Neo-liberalism is not the proper ideology of Labor and social democracy, and nor is it the proper Ideology for compassionate Conservatism with a Christian ‘social welfare’ outlook.

For Labor’s part it is not too late for a mix of tax reform and reprioritisation of expenditure that avoids austerity against the vulnerable.   There is the potential mix of MRRT reform, reduction of dividend imputation, and winding back of ‘middle class welfare’ – that combined could bring in maybe $15 billion a year.  Reform of superannuation concessions has been ruled out for this year – but must factor into our plans for the future.

We have a choice.  Only a progressive ALP can inspire and mobilise its core base and potentially sympathetic social movements.  The May Budget is perhaps our last best chance to achieve this.

Sunday, April 14, 2013

Why Are Sole Parents Under Threat?

above: Sole Parenting IS work in itself!

On  Jan 1 2013, the Australian Labor Government moved 84,000 sole parents, whose youngest child had turned 8, from Parenting Payment Single (PPS) (Grandfathered), a single parent pension, to NewStart, an unemployment benefit. The government justified this decision by suggesting they were merely encouraging workforce participation and bringing equality to 2 different groups of single parents, (pre and post 2006 recipients).

Maarit Hahkomaa argues for the recision of that decision in light of the existing pressures on sole parents - and the needs of their children.  The May Budget is the perfect opportunity to sets things right again...

by Maarit Hahkomaa
The Governments suggestion that this amendment to legislation was a measure to encourage increased workforce participation by sole parents is not supported by statistical evidence regarding workforce participation by sole parents.

“In June 2011, there were 950 thousand lone parent families, making up 15% of all families. About two-thirds of these lone parents were living with their dependants.
There were 780 thousand single mother families in June 2011, making up the vast majority of lone parent families (83%).

The parent was employed in 59% of lone parent families with dependants in June 2011. In these families, 70% of single fathers were employed compared with 57% of single mothers. Employment among single parents generally increased as the age of the youngest dependant increased, with 73% of single parent families whose youngest dependant was 15–24 years old having an employed parent, compared with 35% whose youngest dependant under 5.”

In June 2011, there were 1.2 million jobless families - some 19% of all families. Of these, 910 thousand were jobless couple families - about 1 in every 6 couple families - and 290 thousand jobless lone parent families - almost 1 in every 3 lone parent families.


The revision of the Fair Incentives to Work legislation was initially introduced in 2006, when there were approx. 800000 single parent families receiving PPS.  The change in legislation, which moved single parents from PPS to Newstart when their youngest child turned 8, (rather than receiving PPS until youngest child turned 16) would apply to new applicants after July 2006. Existing PPS recipients would continue to receive PPS under the former legislation – known as Grandfathering.
The provision for “grandfathering” of PPS recipients at the time was a deliberate move by the then Liberal party Government to make the changes in legislation more palatable to the general public.

Senator SINODINOS (New South Wales) - Tuesday, 9 October 2012 “It was a very deliberate decision on the part of the government to grandfather people who were on these payments at a certain date. The reason for that was actually to make it easier for the public to accept the reform by making it clear that it was not having a retrospective impact but rather that it was focused on new recipients. This has been an important principle in a lot of social security legislation and, indeed, tax legislation over the years. Its purpose was to make it easier for the community to accept the reform.” (;query=Id%3A%22chamber%2Fhansards%2F3a74ad30-c7a6-48d2-b316-bc4615cee12a%2F0011%22).

As such, the change in policy went largely unnoticed and undisputed in the wider community, just as the Government intended.

The introduction of the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 which endorsed moving “grandfathered” sole parents from PPS to Newstart if their youngest child had turned 8 before Jan 2013, is an ill thought out and prematurely implemented policy which has been found by the Governments own Parliamentary Committee to violate the human rights of sole parents and their families in Australia.

Mr Harry Jenkins MP, Parliamentary Joint Committee on Human Rights, Fifth Report of 2013 (March 2013) “
1.120 The committee considers that the government has not provided the necessary evidence to demonstrate that the total support package available to individuals who are subject to these measures is sufficient to satisfy minimum essential levels of social security as guaranteed in article 9 of the ICESCR and the minimum requirements of the right to an adequate standard of living in Australia as guaranteed in article 11 of the ICESCR. Nor has it indicated the basis on which it makes that assessment. In the absence of this information, the committee is unable to conclude that these measures are compatible with human rights.”

If the change in policy has been found to violate the human rights of the sole parents who were still “grandfathered” under previous legislation then it follows that moving sole parents to Newstart when their youngest child turns 8 has ALWAYS been a violation of human rights given that the Newstart payment has not been increased in real terms for 20 years.

The Newstart allowance, in its absolute form has been shown to be an inadequate level of income support for a single unemployed person with no dependent children. The Newstart allowance is undisputedly recognised to be $140/fn below the poverty line.

A study involving a single mother with 3 children over the age of 8, has shown that on PPS the Mothers net financial position was much higher. In one fortnight the parent worked 25 hours on casual pay and earned $845.25 and then received $526.04 from the PPS pension. However, on NewStart, the parent worked 42 hours in one fortnight on Part-time pay and earned $846.39 and claimed $225.16 in allowance. This is a total of $1371.28 for the fortnight compared with $1071.55 (Loss of $300.00/fn) with a 17 hour increase in work time – time away from her children.

The Newstart allowance is a completely inappropriate form of income support for a sole parent family. The unique needs of a sole parent family are entirely different to a single person with no dependent children and a coupled family where both parents can share the responsibility of raising their children. Parenting is and should be recognised as a full time job.

The policies and decision making by this Government fail to recognise the value of parents and are destroying the family unit – the building block of our future society.

Sole parents do the job of two parents. They don’t have time off, they don’t get holidays and the increasing financial pressure being placed on sole parent families will not produce a healthy nor stable future society.  Grandparents raising their grandchildren, have also been moved to Newstart and these elderly people, who have already contributed a life time of paying taxes and contributing to the community, have been sent to Job Service Providers and told they need to start actively looking for work in order to keep their Newstart payments.

Senator SIEWERT (Western Australia) Tuesday, 9 October 2012 argued:
“Schedule 1 of the Social Security Legislation Amendment (Fair Incentives to Work) Bill 2012 will drive already vulnerable single parents, the majority of whom are single mothers, further into poverty. What this bill does is drop single parents who are currently on parenting payment single down to a payment which is nearly $140 less than what they are on at the moment. We know that Newstart is now around $132 to $140 below the poverty line. In other words, we are dropping single parents onto the poverty line. Aren't single parents still parents? It is not only the mothers and fathers that we are dropping there, but their children as well. That is what you are about to pass in this place.”;db=CHAMBER;id=chamber%2Fhansards%2F3a74ad30-c7a6-48d2-b316-bc4615cee12a%2F0012;query=Id%3A%22chamber%2Fhansards%2F3a74ad30-c7a6-48d2-b316-bc4615cee12a%2F0011%22

90% of sole parents in Australia are women. This policy is therefore also a violation of women’s rights. There is a rising concern amongst the sole parent community, that women will stay in violent relationships because they will not be afforded the financial support to meet their most basic needs of housing, food, transport, clothing and education for their children should they leave.
This policy, aided by the Members of Parliament who refuse to oppose it, facilitates violence towards women and children by failing to ensure adequate levels of financial support for domestic violence victims.

Allowing sole parents to study as a recognised activity under Parenting Payment Single, provided an enormous incentive for sole parents to increase their skills and education level once their children were at school. Many sole parents, who were supported under the Parenting Payment Single pension, report that because they were financially supported to study, they were able to find better jobs and leave the welfare system entirely, providing an excellent example of the benefits in providing adequate levels of income support to sole parents. 
Moving sole parents to Newstart, which does not allow them to commence study after their youngest child has turned 8, entraps families in the welfare system and creates a cycle of poverty rather than alleviating the circumstances which restrict sole parents to working in casual or part time employment for low wages. This will cost the Australian Government exponentially more in continued welfare support for people who are unable to study or retrain and therefore enter higher paid jobs.

Sole parents who have left a marriage, who may have funds from a marital property settlement, are unable to buy their own homes, buy a car, have a credit card or get a loan. The Newstart payment, as opposed to the Parenting Payment, is an unemployment benefit and is not recognised by lending institutions as an income.

The elected members of the Australian parliament who refuse to address these issues, are perpetrators of negligence.

The elected members of the Australian parliament are public servants, who assume a duty of care to the people they represent when they accept their ministerial positions. Allowing sole parents and their families to suffer incredible hardship and forcing them to remain trapped in a cycle of welfare dependence under this inappropriate legislation constitutes a dereliction of their duty of care. Damage in the form of sole parents experiencing increased rates of poverty, homelessness, depression, domestic violence and distress at not being able to provide the most basic needs for their families is a direct result of this failure of elected members to adequately carry out their duty of care.

There are approximately 900 000 sole parents in Australia and they all vote. Their families and friends also vote. Allies of the Sole Parents Movement also vote.

The votes of these people will be given to those electoral candidates who are prepared to meet their duty of care obligations to the public who elect them.

The following are the demands of the Sole Parents Movement and their allies.

1.  An immediate reversal of the cuts to Parenting payment single.
2. An immediate return of ALL sole parents to Parenting payment single until their youngest child turns 18. (A child is not legally recognised as an adult in any other law until age 18). 
3. An immediate revision of the base rate of Parenting payment single to ensure that it is above the poverty line and provides adequate support for a reasonable standard of living. 
4. An immediate amendment to the legislation to introduce compulsory workforce participation when a sole parent’s youngest child turns 12. Most sole parents will enter the workforce much sooner by choice, however provision needs to be made for parents who have at risk children and other obstacles to looking for work.
5. An immediate reinstatement of the Pensioner Education Supplement and a continued commitment to allow sole parents to combine study and work to meet their participation requirements.

Maarit Hahkomaa is a Sole Parent activist campaigning for the rights of all sole parents and their families in Australia.

Saturday, April 6, 2013

What Labor should have done on Superannuation Concessions

above: former  Liberal MP and now lobbyist for the most wealthy superannuants, John Brogden. Threatened a mining industry style fear campaign unless Labor capitulated on superannuation tax shelters for the rich. 
Average taxpayers, workers, the elderly and the poor - to pay the price.
by Tristan Ewins
For a long time, now, there has been an ongoing campaign on Superannuation Concessions: led by Richard Denniss of the Australia Institute. 
Superannuation Concessions for the top 5% income demographic cost the Australian taxpayer over $10 billion a year as things stand. That is set to rise to $15 billion by 2015. Labor is hard-pressed to fund Gonski and NDIS - as well as other crucial policies on Aged Care insurance and transport infrastructure.  The recent annoucement of Labor policy on superannuation concessions by Bill Shorten was very disappointing.  The total cost of all superannuation tax concessions will be $45 billion by 2015 according to Denniss. 

Labor knows the system is unsustainable - but was 'spooked' by the prospect of the mining industry style 'fear campaign' - led by former Liberal MP and now lobbyist for the most wealthy superannuants, John Brogden.  As usual - Brogden was subjected to very little scrutiny by most of the media - including the ABC - when it came to the fear campaign...

But failing to fund Gonski and NDIS could be much more damaging for the ALP come September. 
There comes a time when you have to 'stand and fight' - and not just 'neutralise' every difficult issue by capitulation to the Conservatives and the most wealthy vested interests. 

And surely ALP strategists must realise by now that most of the monopoly media will spin anything they say and do against them regardless of the actual policy.  'Neutralising' this issue provides only very limited 'breathing room'.  Lacking the necesary funds for 'signature policies' such as Gonski and NDIS will be far more damaging come September.  Unless Labor finds other progressive funding mechanisms in the May Budget - without further callous and unpopular austerity.

I am arguing for another look at dividend imputation, the Minerals Resource Rent Tax, income tax structure, a tax on inheritances valued over $2 million, and an increased Medicare Levy to help pay for NDIS.   I welcome people to post their own ideas here at the blog too - in an attempt to get some debate going on how Labor can retrieve its Budget position without austerity or compromising signature policies.
What follows below are three links to recent articles on these issues published at our 'sister site' 'ALP Socialist Left Forum'.  
Beneath that we are also publishing some links to prior articles from this blog on Aged Care - to impart a sense of just how urgent action is on that front for May. 
A statement put out by Shorten is also republished below at the end of this post - so readers understand what the Labor Policy really is.
Recent Articles on Superannuation Concessions and Other Issues:


We also need to consider the plight of our most vulnerable aged citizens: their unnecessarily pronounced suffering as a consequence of insufficient funding for Aged Care; and the highly regressive ‘user pays’ mechanisms that apply.  I ask readers to keep the issues in mind that are raised in the articles linked to below for the May Budget.  The articles are republished from this blog in previous years...  But I am hoping readers will be of a mind to refresh their understanding of just how much many Aged Australians suffer, and how urgent action in the Budget is. Between now and May we need to press the government hard to do something very significant on Aged Care - both its quality, and addressing regressive user-pays funding mechanisms. 
nb: For more comprehensive critiques of the the Aged Care crisis in this country see here:
And for a more recent critique by this author see here:
And finally we turn to that statement by Bill Shorten - to establish the facts of the matter.  As against the Liberal fear campaign; and quite aside from my personal disappointment on the government's superannuation concessions policy.  Again - debate welcome!
Above: A message for Bill Shorten - Please do whatever you can to lock in funding for Gonski, and for the NDIS which you were instrumental in championing; And Please do not do so at the cost of further callous austerity as in the case of Sole Parents!
The Facts on ALP Superannuation Policy
A Note from Bill Shorten;

You've probably heard a lot of talk about superannuation lately – and a lot of misinformation.
Today Labor announced how we'll make superannuation fairer for those on lower incomes and more sustainable for the future.
Can you share these facts and set the record straight?
1. A person aged 30 today on average full-time earnings will now retire with an extra $118,000 in
superannuation savings.

2. Only people with superannuation savings of $2 million or more will be affected by these changes – this is only 0.4% of Australians retiring in 2014-15.
3. The Liberals want to cut additional superannuation support for 3.6 million low paid Australians, including 2.1 million women, and oppose these changes for 16,000 wealthy Australians.
Former Prime Minister Paul Keating says the changes are in keeping with the original intention of Labor’s superannuation system, which was never meant to be an income shelter for those able to contribute increasing levels of precautionary savings.
Can you tell your friends and family about these changes so more people know the facts?
Thank you,

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