Pay that Don. Nice essay, if I can put it that way.

After surviving for 5 years at or below the poverty line in Oz, some things are pretty clear. On a relative basis (eg, compared with 3rd world countries) we’re not doing all that badly. On the other hand, it is a struggle, especially if you’re aiming to give your kids a higher education.

After a year back in the paid (albeit low-paid) workforce a few things have stood out to me. One is that the government’s idea of social security is similar to its ideas on public health: provide a barebones safety net for those without means, and after that it’s everyone for themselves. Sadly too, low-income earners and those dependent or partly dependent on some social security assistance provide a soft target for governments; much softer than high-influence tax dodgers.

In my case, Centrelink wanted to wipe out two thirds of my daughters’ youth allowance, which would have made it near-impossible for either to continue as students. I was told that this was based on our 2005 tax income statements. Since they showed a combined household income of just over $30,000 I was wondering if this govt had plumbed new depths of greed.

At a more lengthy interview, I discovered that this adjustment was based on our household spending (a 38 page questionnaire they sent us last Sept.). That showed we’d spent roughly $45,000 in the last year; so our daughters’ Youth Allowances were pared back from $240 per fortnight to $62. However, it turned out that a refinancing loan I’d taken out last Dec of $30,000 had been overlooked. When this was docked from our spending it was then only $15,000. So Centrelink reverted to our Tax statements (they go by whatever figure is higher) and adjusted us to $30,000. That was still just above the cutoff figure of $28,800, but meant that our daughters only lost about $8 a fortnight. So a happy ending in my case.

However, it occurred to me that a combined household income or consumption of $45,000 is hardly affluent these days. And losing two thirds of the Youth Allowance is a pretty savage penalty for offspring.

If Labor wants to reclaim the Battlers (and they’ll already get a boost with Workchoice IR)
they could have a hard look at how the working poor are coping. Restoring fairness to the Youth allowance for offspring of low-income working parents would make a lot more sense than the usual Swan prattling about the need for tax cuts.

My advice from Centrelink re Family Tax Benefit was different on three occasions I phoned.

every time something unusual happens I ring up to find out why and get three different answers!

Funny thing is the low income types know every which of the payments and give you far better advice!

I always enjoy your posts (at the same time as having a nagging doubt that there’s more to be said – about which maybe I’ll try and say something if I get the time.)

And yes I agree with CS – “the tyranny of false equivalence” is a great expression. Or as I think Paul Krugman puts it, if George W said the earth was flat, the papers would report ‘disagreement on shape of the earth’.

The form dominates the substance – a motto for our post-modern age.

Academics who studiously overlook the severe limitations of their data in order to do the sort of sophisticated number-crunching that gets the apporval of their peers, and welfare lobbyists who are none too scrupulous about the science behind their statements so long as it gets a headline and a burst of donations, leave themselves wide open to the sort of riposte “evil” Peter Saunders made.

Effective policy requires honest assessments of problems and honest evaluation of policy, otherwise you’ll never get support for policies that work – in fact you won’t even know yourself which ones work. And claiming the problem is getting ever worse no matter what we do just invites people to shrug their shoulders and say “the poor ye have always with you”.

DD – As you say “just because someone is biased doesn’t automatically make their statements untrue.”

The Smith Family and NATSEM left themselves wide open to attack when they chose to headline their report with a half-the-mean measure of poverty. It’s not that anything they said was false, but it did mean that the CIS was able to raise some awkward questions about the definition and measurement of poverty. The fact that it suits the CIS to prevent agreement about how to measure poverty doesn’t mean than many of their concerns aren’t justified.

Nicholas – Yes there’s a lot more to be said. What issues in particular were you thinking of?

This would ensure that resources that are concentrated on a real problem rather than dissipated on people who are simply uncomfortably conscious that they aren’t as “successful” as people in the “better” streets in their suburb.

What is “real” poverty? “Bad” Saunders deals with the question of absolute versus relative poverty very lucidly.

If your child is “independent”, those parental income tests don’t apply.

Independence can be achieved by living in a de facto relationship. Part of the ludicrous rules of Social Security legislation is that couple can be in a “marriage-like relationship” even though they are under the legal age for marriage. A couple can be ‘de facto’ once they reach of age of consent for the state they live in.

So, if you live in Vic/ACT/NSW/NT/WA, get your daughter into a ‘relationship’ at 16. Normally, it takes a year to become ‘independent’, but if your daughter claims that the relationship broke up because he was violent, then a six-month relationship is enough. In Tas/SA she’ll have to wait until she is 17.

If the young people are burdened by old-fashioned ideas of morality, they can wait until they are 18 and legally marry. That makes them ‘independent’.

It’s sightly easier for a boy in NT. The age of consent for a boy is 15 there, so move to the NT, set your lad up with a girl of 16 or more, and by the time he’s 16 – age for claiming YAL- he’ll get the full rate, regardless of parental income.

The other easy way is for the child to claim “homelessness”. There are some apalling cases of parental child abuse, where the young person needs to leave home, but it’s not that hard to sham up.

The third alternative is slower.
If a young person has left high school and been working for 18 months, and earned $17,667 (it goes up each year), the young person is “independent”.

So arrange to employ your young person in your business, or have a business associate employ her. The young person will be 19 and a half before she achieves independence.

The ‘de facto’ method is the quickest and easiest.

“A family lives in ‘absolute’ poverty when it struggles to make ends meet (e.g. it cannot find adequate food, shelter, clothing, etc.)”

From a measurement perspective, this isn’t any more enlightening than saying:

“‘relative poverty’ is said to exist when people’s living standards fall a long way short of what is ‘normal’ in their society”.

These definitions hinge on how words like ‘adequate’ and ‘normal’ are interpreted.

Researchers who’ve used absolute definitions of poverty have always included ‘social necessities’ like tea and coffee. The early poverty researcher Seebohm Rowntree tells an interesting story about an English workhouse for the poor. The local government board’s decision to replace tea with gruel caused a near riot. In the end Rowntree’s ‘absolute’ poverty line included tea — not because people would starve to death if they didn’t drink it, but because it was socially expected that tea drinking was part living decently.

There’s nothing at all obvious about what ought to be included on a list of necessities and, as a result, no easy consensus about where you’d draw an absolute poverty line. Absolute poverty lines vary from place to place and time to time.

I believe you are right in concluding that the tax system heavily favours self-employed and trust-type setups. Which reminds me that I should haave another talk to my accountant.

It is common gossip where I live (country Vic) that one leading light (who was actually a local govt Commissioner for a while when Kennett sacked all local governments), apart from being a prominent restaurant and motel owner, has her finance affairs arranged in such a way that she can still claim a Commonwealth Health Care Card, and uses it whenever possible.

It is interesting advice you have on defacto relationships, but it would be hard to get this past my wife, who still does not approve of such. However, it does offer a bit more weaponry against Howard, who pretends to be strong on old-fashioned family values.

Failing some creative advice from my accountant, our family could be in trouble this time next year. And that was really my concern. Consumption of $45,000 in a year is hardly in the ‘last of the big spenders’ category. Why are they penalised so brutally?

I was hoping that this story might interest Chris Shiell and a few that still have Labor connections. It is my guess that the Working Poor (ie, those having work and not reliant on benefits) are doing it pretty tough. In the outer suburbs of Sydney and Melbourne there are high mortgages and high transport and petrol costs. If their children are to be skinned as well under the assumption that the parents ought to be contributing, things are going to get tougher. If enough attention and concern was given to it, they could be won back from Howard’s Battlers. Job and income security are every bit as important as mortgage interest rates.

“Trudging through craters left by the enemy’s empirical bombshells, and deftly avoiding the debris of his own side’s collapsed arguments, [Saunders] laments the ‘lack of funding for research into the causes and consequences of poverty,’ and he sketches his plans for post-war reconstruction …

Who are the protagonists in this ‘war’? Standing alongside Saunders on the side of the poor we find the usual rag-tag battalion of socialist academics, armed to the teeth with rhetoric and clich

She maybe doing something dodgy,Don. But such assistance is assistance on income not the type of job.

One of the reasons I left the delivery business is the compony I contracted for was calculating low income assistance as part of the package for some drivers. This made it hard to negotiate a better deal.

Still, the point remains: will Labor ever pause long enough in its factional deals to have a hard look at its constituency and potential support? The current approach of poll sampling and softly softly doesn’t make much much sense.

And going on about the need for tax cuts (which is different from tax fairness) only seems to be making it easier for the ‘smaller govt’ brigade.

Pretending to be as nearly rednecked as Howard’s Liberals is not going to win or save a single vote. Those deciding their vote on such issues will prefer to settle for the real thing.

Thanks for that, Gary. I’d sort of guessed it was income, and as blank suggests it is loaded in favour of the self-employed. I’m speculating on whether I can exploit that situation next year and still remain ethical.

I wonder (after all those attacks on Latham’s ‘class envy’ style for trying to stop those transfers of public resources to the GPS) if there’s not some reverse class envy at work in wanting parents to pay more of the costs for kids on youth allowance.

If we look at all the variants sited by blank, it must cost a bundle to administer and even to consider each case. It would seem far simpler not to have the system at all and use those resources instead for helping people find work or get qualifications.

I also thought that the same amount of resources spent in tackling tax avoidance would net a far greater return for the government.