It’s a familiar story. Every time a Liberal government is voted into office we hear the same old mantra about cracking down on welfare fraud. They do it every time; not because they think there is widespread fraud happening, but because history has shown it’s something that will create a particular reaction within a certain sub-set of voters. In addition to that, they are also planning an expanded ‘work for the dole’ program and have begun seeking support for re-establishing the Australian Building and Construction Commission amid claims of bribery and corruption in the construction industry. It’s a clever strategy. These platforms have, in the past, proven to be a popular area for conservative governments to exploit. Labor, on the other hand, who have always been serious about welfare fraud,unemployment benefits and corruption and have the record to prove it, prefer to just get on with policing it and not bother with all the trumpet blowing. And so here we are again, in such familiar territory. These three issues are too broad to cover in one article so I will concentrate on just one, namely the ministerial announcement of a crackdown on welfare, announced by Kevin Andrews. It was just so predictable.
To understand what is going on here, we need to consider an interesting theory, namely that the Liberal Party exists primarily to perpetuate its own existence. That’s it! Just consider for a moment that everything the liberals do is influenced by this one principle. They also, I believe, have strong views on who should receive welfare. Is it just for the poor, the ill, and the disadvantaged? Or is it for the wealthy as well? They would hotly deny such a self-serving motive but I will leave it up to the readers to draw their own conclusions after taking a closer look at Kevin Andrews’ proposed welfare review. To gauge whether or not I’m right, let us examine this latest “crackdown” a little closer and see where it takes us.
This review is aimed at cutting the “unsustainable” cost of welfare support without addressing the elephant in the room. Did you know that a couple with assets as high as $1 million, not including the family home, can still receive a part Aged Pension? The minister has said that he won’t be looking at the Aged Pension or Family Tax Benefits. In fact,all he is looking at is the Disability Support Pension and Newstart. He says it’s not about savings but he also refers to it as an unsustainable cost. These two welfare items account for just $22.5 billion or 24% of the total welfare bill and it is here that the review will focus in an effort to find savings although, let me repeat, the minister says it’s not about savings. In the end, however, it doesn’t really matter. The DSP is unlikely to serve up any substantial savings and whatever changes are applied to Newstart the overall benefit will be swamped as unemployment levels increase this year. So, what is Kevin Andrews up to? Well, he says it’s about targeting young, working age people before they get onto the DSP.
At present the DSP IS $751 per fortnight compared with $501 per fortnight for Newstart. On face value the logical choice is to move as many DSP recipients as possible across to Newstart and, ideally, to prevent young people from getting on it in the first place. But how? The Gillard government has already acted to do this, with moderate success, and even if an additional 30% were transferred that would represent a saving of only $2-3 billion. And 30% is an unreasonably optimistic figure. 10% is more likely resulting in a saving of just $1 billion, a figure that will be swallowed up several times over when unemployment reaches 6% and job vacancies start to crumble.
So why all the fanfare about cracking down on welfare and regurgitating the ‘work for the dole’? Is it because it resonates with the working class? Is it because they think it appeals to the lowest common denominator and helps revive the ‘dole bludger’ myth we hear so often when unemployment rises? Or is it merely a PR exercise to deflect attention from Tony Abbott’s performance and other government plans? Is it to make the May budget appear as diligent as possible in the hope that we will overlook the ballooning deficit that it will produce?
There is no simple answer to pin-pointing the intentions that lie behind ministerial reviews, save that of making themselves look responsible but I’m guessing it is all of these things. My best guess is that they are responding to what they think are the perceptions of the broader electorate. They are also, I think, laying the groundwork for an expanded middle class welfare regime first started by John Howard. I think they are trying to find some wriggle room to cater for their upcoming and overly generous Paid Parental Leave Scheme. Time will tell but given the very short time frame (February), for Mission Australia head, Patrick McClure to complete the exercise, it has to tie in with something. Which brings me back to the idea that the Liberal Party’s primary raison d’être is their own preservation? It is the middle class that has handed them government. Logic says that if you hang on to the middle class vote, then you hang on to government.
This suggests to me that the backroom boys in the Liberal Party bunker have been sounding out the focus groups to try and reverse the current trend of negative opinion polls. Labor would do well to analyze this very carefully and assert its own strategy before the old but successful myths re-emerge.
John Kelly blogs at: The View from My Garden
