*Guest post by Paul “Gummo Trotsky” Bamford (I’ve invited Paul to join the Troppo stable/pony club, and am pleased to advise that he’s accepted. So expect more from Paul very soon).
The mythical – or legendary if you so prefer – figure of the dole bludger has haunted our political folklore since the Whitlam years of the 1970s. In, I think, 1973 the Whitlam government outraged the editors of the major Australian newspapers by doubling the dole and not long afterwards, the public opinion informed by those papers was equally outraged.
The Melbourne Herald did some especially sterling work to raise public awareness of the insidious problem of dole bludging. For a while it ran a regular feature of inside stories about dole-bludgers thwarted from a source within the CES.
One choice example featured a bloke who went to CES to claim the dole saying he was a lion tamer. As there was a circus in town, the CES worker rang them up and asked if they would be prepared to take him on. Suddenly the would-be dole-bludger discovered a revived interest in factory work. With the benefit of hindsight I’d say that the so-called CES insider was no further from the Herald’s newsroom than the sub-editors desk.
Thanks to a lot of newspaper op-edding and talk-back radio shock-jocking the idea that much of Australia’s unemployment – definitely too much, and probably most of it – was voluntary became conventional wisdom in the community at large. Everyone knew of someone who was living the easy life at the taxpayer’s expense. If you were unemployed it wasn’t because of a lack of jobs – for many it was a lifestyle choice.
For many, unemployment remained a lifestyle choice even after Reserve Bank and Federal governments accepted an official unemployment rate of 5% of the Australian workforce rate as ‘full employment’. At least so says the myth.
In reality policy makers have accepted the 5% rate as the natural unemployment rate and stopped worrying about how much of it was frictional – people temporarily out of work while they were changing jobs – and how much was structural that is, caused by economic conditions and the government’s economic management.
When you’re stuck with an official unemployment rate of 5% and op-edders and shock-jocks are telling the public that it’s mostly dole-bludging, why bother to correct them? In pragmatic political terms, they’re on your side. Ratings hungry TV current affairs producers might even prove a source of electorally attractive policy proposals such as ‘Work for the Dole’.
‘Work for the Dole’ is usually described as a Howard government initiative but my memory still insists that it was a Sixty Minutes initiative – that the Liberals included the proposal in their 1996 election platform after Sixty Minutes broadcast a report on ‘workfare’ in the USA. After the show’s mailbag segment showed a lot of viewer support for the idea it went into the Liberals’ policy platform and the rest, as they say is history. Getting tough on the unemployed was the new true blue.
If my memory is correct – something I shall have to check one day – ‘Work for the Dole’ is a good example of the media tail wagging the political dog. But that’s a subject for another day; what I’ll be looking at in this post is the Howard Government’s later efforts to promote the dole bludger myth from 2002 to its demise in 2007.
In April 2002, 4 months after winning the November 2001 election the Howard government launched the ‘Support the System that Supports You’ (SSSY) campaign. A media release from the office of Amanda Vanstone, then Minister for Family and Community Services described the campaign as an ‘educational campaign’ to ensure that Centrelink’s clients were complying with their obligation to keep Centrelink informed on changes in their personal circumstances that might affect their benefit. The campaign was ‘backed’ by a national multi-media advertising campaign.
As the campaign was expected to result in more Centrelink clients reporting changed circumstances and more calls from decent working Aussie battlers ringing to dob-in their dole bludging neighbours Centrelink received more funding to cope with the extra workload in processing these ‘tip-offs’. (Australian National Audit Office, Audit Report No 7, 2008-09 Centrelink’s Tip-off System (ANAO)):
The campaign was expected to result in an increased number of tip offs and contacts from customers advising of changed circumstances. Consequently, Centrelink received funding for the expected increased workload, while policy departments were funded to undertake the campaign.
‘Educating’ Centrelink clients wasn’t the only purpose of the advertising campaign – there was another explicit message for the rest of the community:
Unfortunately, there is also a small number of people who deliberately cheat the system. The message to them is crystal clear – you will get caught, you will have to pay the money back and you may get prosecuted. The hotline number in the advertisements will give the public the chance to dob-in people who are ripping off the system. (Vanstone media release 1)
Implicitly, through the situations portrayed in the advertisements, the campaign depicted Newstart recipients and other Centrelink clients – particularly the young – as fraudsters ripping off the system.
Implicitly, through the situations portrayed in the advertisements, the campaign depicted Newstart recipients and other Centrelink clients – particularly the young – as fraudsters ripping off the system. In 2005 the campaign became the ‘Keeping the System Fair’ campaign but both the overt and implied messages remained unchanged.
If, like me, you’d like to know where the idea for this campaign originated and why the Howard government went ahead with it you’ll have to wait another 19 years to find out. Under the 30 year rule the relevant cabinet papers won’t be available until 2032.
In the meantime we might as well assume that the impulse that moved the Coalition to run the SSSY campaign was as mysterious and complex as that which moves a dog to lick its own genitals. Otherwise we might be drawn to the conspiracy theoretical view that it was a cynical exercise in manipulating public attitudes to the unemployed for long-term political advantage. Time – 19 years of it – will tell.
The SSSY campaign was discontinued in June 2008 due to its declining effectiveness. There is a bit of irony in the campaign’s demise. To keep parliament’s support for the campaign, Centrelink had to provide data that showed it to be effective. I suspect that after the change of government in 2007 when members of the ALP Federal Cabinet looked over the data through a new set of ideological blinkers they saw a different picture than the one the Coalition saw through theirs.
Most importantly, they would have seen – because they were told so by the ANAO – that neither Centrelink nor the major policy department (DEEWR) involved in running the campaign had any idea whether the campaign was effective or not:
1.26 The actual number of tip offs and savings realised as a result of the campaign cannot be clearly established due to a discrepancy between results calculated by Centrelink and results calculated by DEEWR.
2.30 During the ANAO’s call centre visits some operators were observed not asking the informant… 2 …For activities such as the SSSY campaign, which rely on recording responses, it is important that responses are recordedconsistently to enable the effectiveness of the campaign to be accurately measured and assessed. (ANAO)
Nonetheless from 2004 to 2009 Centrelink spruiked the effectiveness of its tip-off system to government with a boilerplate section which included this interesting claim:
Investigations of tip-off information continue to build community confidence in the integrity of the … system.
It’s a claim which is demonstrably, and laughably, specious. Centrelink’s own figures (in its annual reports) show that investigating tip-offs from the public makes only a minor contribution to Centrelink’s savings from compliance reviews and fraud investigation (see the table below). In addition of the relatively few members of the public provide tip-offs to Centrelink it’s unlikely that those who do have of confidence in the system – quite the reverse. Unless they’re acting in the confident belief that anonymously dobbing someone in to Centrelink is a good way to cause them a bit of vexation with no comeback.
Tip off Investigations and Results by Financial Year
Year TotalCompliance Reviews (TCR)
Tip-offs Investigated (TOI)* Rate Reductions from
No % TCR No % TOI*
2004 4 121 196 72 473 1.8% 17 570 24%
2005 3 808 302 55 331 1.5% 10 022 18%
2006 4 010 773 59 781 1.5% 11 492 19%
2007 4 276 281 52 597 1.2% 11 063 21%
2008 4 431 309 60 257 1.4% 17 311 29%
* According to the ANAO’s 2008 audit of Centrelink’s tip-off system, Centrelink received a total of 101 595 tip-offs in 2007-08; of those only 60257 (59%) were actually investigated – either through compliance review or fraud investigation. If the total number of tip-offs received had been reported as well as the number investigated it’s likely that the percentages would look even more underwhelming.
Compliance reviews are administrative checks by Centrelink that its clients are providing up-to-date information about their personal circumstances and adjusting payments – up or down but usually down – to reflect any changes. They are not fraud investigations; Centrelink assumes that in most cases non-compliance is the result of an oversight rather than a deliberate attempt to rip off the system.
As an indication of the financial value of compliance reviews and pursuing tip-offs, in 2003-04, 709,923 Centrelink clients had their payments reduced after compliance reviews. The resulting saving to Centrelink was $104m. Payment reductions from tip-offs account for a mere 2% of that amount. Over the whole year, investigating tip-offs saved Centrelink roughly the same amount as other compliance review measures saved in each single fortnight.
Centrelink’s annual reports show just how few people deliberately cheat the system and how little they cost the taxpayer as a proportion of Centrelink’s total spending:
Year Total Centrelink Payments (TCP) Investigations (Inv) Prosecutions Debts/Savings Notes
No % Inv Amount % TCP
2004 $60.1bn – 3 055 $36.6m 0.06%
2005 $63.1bn – 3 511 $41.2m 0.07%
2006 $64.7bn – 2 885 $34.3m 0.05%
2007 $66.2bn 42 000 3 400 8.1% $127m 0.19% (1)
2008 $69.9bn 35 885 2 658 7.4% $140.2m 0.20%
2009 $143.7bn 26 084 3 388 13% $113.4m 0.08% (2)
2010 $83.8bn 22 693 3 461 15.3% $103.3m 0.12%
(1) From 2007 onward Centrelink changed from reporting only customer debts resulting to reporting consolidated debts and claimed savings.
(2) Total Payments for the 2008-2009 includes the one-off payment of $1500 to all pensioners as part of Labor’s GFC stimulus package.
Centrelink’s reported figures on compliance reviews don’t support any inferences on the rate of dole-bludging. All they show is that Centrelink’s ‘non-compliant’ clients are in the minority. The figures on fraud investigations and prosecutions are much more revealing.
First, they suggest very strongly that the number of people who deliberately cheat the welfare system is not merely a small proportion of Centrelink clients it’s a positively a miniscule percentage of the total number of Centrelink clients. They also suggests that there aren’t too many more of them out there who could be caught and prosecuted if Centrelink did more investigations; at most you can expect Centrelink’s fraud investigations to produce between ~2700 and ~3500 prosecutions each year. This will save somewhere between $100m and $150m off welfare spending – consistently less than 1% of the total welfare budget.
That’s a lot of – uncosted – bureaucratic effort for very little result. As noted above the ANAO found that it’s impossible to say whether the ‘Support the System that Supports You’ campaign delivered value for money by saving more off the welfare budget than it cost to run the advertising and provide the administrative support.
Maybe the real rorters of the welfare system back then were the government and officials who spent public money on a divisive ‘educational campaign’ which produced no demonstrable savings.
- emphasis added
- whether the tip off was due to the SSSY campaign