Déjà vu – Income support and the long-term unemployed

Both Judith Sloan and Ian Harper argue that Newstart Allowance is too low, particularly for recipients who are long-term unemployed. In the late 1980s, the Social Security Review also argued for an increase in unemployment payments. The review’s authors wrote:

… immediate priority should be given to bringing rates of payment to pension levels. There is absolutely no justification which can be given for providing a lower rate of payment to single individuals, whether short-term or long-term unemployed, who must not only support themselves but engage in active job search and maintain the mobility and social contacts necessary to ensure against labour market marginality (p292).

Some people argue that the disability pension needs to support people for long periods of time, while unemployment allowances are (or should be) a short term payment to tide people over between jobs. But in the aftermath of the global financial crisis, the number of people receiving Newstart long-term increased sharply. Even as employers were complaining of skill shortages, a significant number of people seemed to be trapped on income support.

At the recent tax forum, Judith Sloan argued:

We have to understand that the dole, unemployment benefits, Newstart, it was there as a short-term transitional payment and in that sense a low payment makes some sense, but if people are unemployed for a long period of time the issue of adequacy really becomes important and indeed their ability to successfully find employment becomes important.

There’s no clear boundary that distinguishes the job prospects of long-term Newstart recipients from those of disability pensioners, yet the difference in payment rates is startling — $486.40 per fortnight for single Newstart recipients and $689 for Disability Support Pensioners.

In the 1980s long-term unemployment emerged as a major issue. According to the authors of the Social Security Review, the rise of long-term unemployment undermined the legitimacy of the distinction between the short-term purpose of payments to the unemployed and the long-term purpose of payments to people with disabilities. Now we’re having the same debate all over again.

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14 Responses to Déjà vu – Income support and the long-term unemployed

  1. Don Arthur says:

    I should note that the gap between pensions and the unemployment benefit was much narrower in the late 1980s than it is today (see page 96 of the SSR report).

  2. Peter Mariani says:

    “but if people are unemployed for a long period of time the issue of adequacy really becomes important and indeed their ability to successfully find employment becomes important.” Indeed their ability or the reality of them finding employment is the part that is most ignored and not adequately addressed. The part that is not, can not be fixed simply by money.

  3. meika says:

    employers were complaining of skill shortages, a significant number of people seemed to be trapped on income support

    Employers have no time to look at potential employees applications except by way of a perfect fit. Having been on all sides of the selection fence now I can say that Employers tend to be the most lazy of all people in this process. They simply do not care at all, and feel entitled to be so because of their time preciousness, which is perfectly rational, indeed they are looking at a pool of people who should be doing the work and selling themselves at their best.


    I cannot fault Employers for this, but I can critically describe what they do.

    Employers tend to look for buzz words, long term unemployed will not know the buzz words, they will look uncool, and so will not make their skills appear transferable, which is the best they can hope for (though a lot of skills are over-rated in terms of how quickly a half-bright person can pick them up, thus the buzz words to describe the skills change very quickly to cover this fact up. The wrong words quickly select out the uncool from the application process. Same for all the mind-fuck jargon in Pubic Service position statements.)

    If no one has the required skills its possible employers generally are habituated to buzz-words selection processes due to decades of high unemployment rates. (The conditions change but those who feel entitled to their behaviour do not change their good selves.)

    Also long-term unemployed are generally marginalised, as stated, and everyone knows this, thus it is going to be unlikely such losers people will do a good job of selling themselves. It is harder to sell something that you know has been rejected for a long time, and even if supplied with the correct terminology, one may appear insincere, or depressed.

    Basically employers are seeking the perfect body, but I’m a creep, I’m am a wierdo, what the hell am I doing here, I don’t belong here…

    As employers, especially corporations, regard the effects of their selection process as an externality, somebody else’s problem, if a problem at all, it will never be fixed.

    You have a problem with that?

    Should those assisting long-term job seekers help them keep up with the buzz words, then the buzz words will change even more quickly. The process is driven by time-poor decision-making by people paid not to care.

    They might even be proud they do not care.

    Such is life.

  4. billie says:

    The insidiousness of the long term unemployed position is especially dire when one realises that Centrelink micromamanages their finances with the ability to check their bank balance, Newstart recipients must account for every dollar deposited into their bank accounts and will lose benefits if they have more than $500 in the bank. How do they pay car registration – they are not eligible for pensioner discounts or bond on their rental property.

    How is income quarantining going to work when its introduced in melbourne and sydney when the individuals share of rental is $170 per week?

  5. Chris Grealy says:

    One word for employers- Training. If you’re too lazy or tight to provide training, that’s your problem right there.

  6. Julie Thomas says:

    Employers can be so stupid and lazy.

    An example; my daughter, an IT programmer, now has a diagnosis of Asperger Syndrome. The diagnosis came about because she was so distressed after having a meltdown at her workplace that she went to see a psychologist although she’s previously been dismissive of the idea – from me – that she might benefit from some insights into her behaviour.

    The problem at work was that being ‘aspie’, she not only doesn’t like socialising, she’s crap at it, and her employers were into ‘team building’ and wanted everyone at work to get along; to interact and to attend out of work functions.

    At one stage they offered her more money to ‘be approachable’, lol. She did try and explain that she found socialing difficult and stressfull, but they clearly didn’t understand what she way saying.

    She has no idea how to be approachable and, even more irritating and ‘unfair’ to her, was the fact that her male counterpart at that workplace, was equally inept at being ‘approachable’, but the bosses were ok with blokes being unaproachable. So, she says, it was acceptable for him to be apparently ‘rude’ and ‘aloof’ but she was regarded as a bitch, mainly by the girly girls in the office.

    She seems to have found an intelligent boss and an appropriate workplace now, the programmers outnumber the other staff and the boss has no requirements except that she does her work well. But I think the psych sessions have been important in giving her the skills to cope better with neuro-typical people.

    The first sessions were paid for by the Govt and she would never have gone to see a psychologist, if she had to pay for those first sessions. Now she has used up all her free sessions she values the therapy enough to pay for extra sessions herself.

  7. Yobbo says:

    The real wonder about Julie’s case is that employers expect Programmers to be as social and approachable as everybody else. Aspie or not, the job attracts a certain kind of person, and anyone who wants software written should know that.

  8. Julie Thomas says:

    It was just a small company Yobbo, in Brisbane and they had only just begun to do their IT work in house. You’d think that they’d know that they needed an intermediary between the IT types and the office types.

    The ‘science’ on Asperger Syndrome is no way settled; so many PhD’s being done right now and it seems to me that whether they have a diagnosis or not, all IT people have some Aspie characteristics; if high functioning Aspies are ‘socialised’ well, encounter supportive environments and are lucky, they will never need a diagnosis.

    Apparently it is commonplace though to expect Aspie types to socialise ; this is quote from a’quant’ working in the financial sector

    “For those of us who find life surrounded by other people difficult enough as it is, the requirement to network is hellish.”


    He goes on to say

    “Not sure though that I’d voluntarily swap IQ points for EQ – even though I’m certain that I’m going to end up as one of the single old blokes that you might occasionally come across – nice, big house in the country, lots of dogs, materially comfortable and yet utterly alone and mad as a fish.”

    But he’s wrong in thinking that he would have to swap IQ for EQ; it is possible to keep one’s IQ and at the same time develop more EQ. In fact more EQ doesn’t mean a lower IQ at all; EQ just adds to ‘intelligence’ which isn’t the same thing as IQ.

    But the interview with the quant, and other finance workers in the Guardian series are worth a look especially for people who don’t know much about this ‘industry’.

  9. observa says:

    One word for employers- Training. If you’re too lazy or tight to provide training, that’s your problem right there.

    Oh we’re not all too lazy or tight to provide training to the unemployable but I guess we have to see a spark there to begin with. Mind you the lady had managed to tertiary educate herself in a specific field to begin with so it wasn’t that much of a punt and they were short of a her specific skill set.

    Employers aren’t like compulsory schooling giving out brownie points for participation. Firstly we don’t pay our workers, our customers do and some intuitive understanding of that on behalf of the workforce is a mandatotory pre-requisite to sign on. Secondly well focussed training can be as productive as better machinery and equipment but unlike fixed capital, improved labour can waltz off down the road before you get a return on investment. Essentially the3 freerider problem like street lights and well you know the result. Lastly while it’s apparently beholden on us to take every poor downtrodden most participated product of the secondary school system off the social workers’ hands, that doesn’t seem to apply to publicly funded universities, judging by certain TER level entry requirements to particular disciplines. Apparently our taxpayer funded Universities aren’t all that keen on being the most participated tertiary institution going around either.

  10. observa says:

    And speaking of our esteemed Sandstones it would appear they’ve been a bit tardy accepting their social responsibility to fashion the clever country

    Perhaps the Gillard Govt are not that keen on too many clever science and maths grads asking the hard questions of the pseudo-science ‘dunces’ we have running about the place at present or perhaps they’ve just been listening to this bloke.

  11. Dan says:

    That Friedman video was a heap of toss. His lack of imagination and inability to consider benefits to the collective rather than just to the individual is strikingly obvious.

    Memo for Milt: targeting/means testing programs, FFS. It’s easy.

    I’m not against HECS, btw. I think it’s a neat system that probably gets the balance about right.

  12. observa says:

    I’m not against HECS, btw. I think it’s a neat system that probably gets the balance about right.

    Well apparently the Gillard Govt thinks it needs a bit of ‘rebalancing’ there Dan. Either that or they’re running a bit short of readies even with their new taxes. That might be beacause at last count and counting they’d racked up a ‘Hex’ debt amounting to around $19000 per working Australian and they’ve been watching all that new found fiscal discipline those Europeans are suddenly all so keen to sign up to?

  13. Dan says:

    I had the individuals incurring the debt in mind. But maybe from a macro/fiscal perspective it needs a tune-up. Or you could fund it some other way, or target it better. A myriad of options.

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