The Worst Unemployment Benefit in the OECD

Australia’s unemployment benefit (the name “Newstart” is a particularly cruel joke) has been effectively frozen for the last twenty-five years. While it has been kept tied to inflation, the cost of living has skyrocketed, which means that those on Newstart now find themselves more than $200 per week below the national poverty line. Between 2008 and 2018, Australian wealth per capita rose by 83 percent (as compared to 20 percent for the United States). And yet the fabled land of the “fair go” now has the lowest unemployment benefit in the developed world.

Thanks to the Newstart freeze, unemployed Australians have no hope of meeting the rising cost of living. This places basic necessities like housing increasingly out of reach. Anglicare, a network of charities and organizations linked to the Anglican Church, recently undertook a rental affordability survey. They defined affordable housing as costing no more than 30 percent of a low-income earner’s weekly budget. By this criterion, there are no homes in any Australian capital city or regional center that are affordable for single people on Newstart. Indeed, the survey found only three rental listings in the entire country that are affordable for Australia’s 711,000 Newstart recipients.

The social consequences of this are disastrous. In recent years, homelessness in Australia has spiked dramatically, increasing between 48 percent and 63 percent in our capital cities. For those welfare recipients who avoid living on the streets, putting away money for rent, bills, or medication usually means food poverty. According to a recent survey conducted by the Australian Council of Social Service, 84 percent of Newstart recipients skip meals in order to survive on the entitlement. Colloquially, low-income Australians refer to this as “the Newstart diet.”

Unsurprisingly, this level of deprivation is psychologically debilitating. Being unemployed in Australia means experiencing depression, stress, anxiety, and loneliness on a daily basis. In a recent survey, the Australian Unemployed Workers’ Union (AUWU) found that 98 percent of its members experienced significant social isolation. Increasingly, Australia’s unemployed cannot afford to put fuel in their cars, pay for public transport, or meaningfully engage with their friends and communities.

This cruelty results from, and is justified by, a disciplinary, neoliberal rationale. Keeping entitlements crushingly low, it is argued, will reduce “delinquent behavior” and “welfare dependency.” In turn, this is supposed to incentivize people to find jobs while rooting out the undeserving poor, who are stigmatized as “dole bludgers.” The problem is that jobs often don’t exist: on average, there are now sixteen job seekers competing for every position advertised. Alongside spikes in unemployment, precarious work and underemployment are also on the rise. It is not uncommon for casualized workers to receive Newstart payments between irregular jobs.

On a deeper level, the idea that personal responsibility can (or should) be cultivated through severe economic deprivation is nothing short of vindictive. This punitive imposition of poverty and isolation has been directly linked to growing rates of suicide, especially among young people and Indigenous Australians. Just two weeks ago, the Senate heard new evidence that Newstart — which comes with significantly more onerous conditions in remote communities — is directly linked to lower life expectancy among Australians from an Aboriginal or Torres Strait Islander background.

Yet despite mounting evidence, our leaders still refuse to address or even acknowledge the poverty crisis that is spreading throughout the country. Instead, conservative politicians continue to paint a fairy-tale vision of a “fair go” Australia — “a country where if you have a go, you get a go” while passing reforms that punish the poor and reduce what paltry income they receive.

Punishing the Unemployed

Scott Morrison is just the latest in a line of conservative Liberal Party prime ministers who have inflicted a dizzying array of spiteful policies on unemployed Australians.

Take for example his decision to expand the much-maligned cashless card program. Building on a program first introduced under John Howard, cashless cards restrict the spending of Indigenous and rural welfare recipients by quarantining a large part of their payment in benefits cards that can only be redeemed at certain outlets. Making a mockery of the rhetoric around Aboriginal-controlled decision-making, privatized job agencies have been granted unprecedented powers to cut people’s entitlements for infringements like failing to attend a resumé-writing class.

Now seeking to further expand the program, the Morrison government has proposed new measures that make drug-testing mandatory and oblige the unemployed to take up farm labor. Perhaps most dismaying is the fact that consecutive governments, beginning with Howard, have tightened eligibility requirements for the Disability Support Pension. The result is that disability pensioners have been dumped onto the unemployment benefit. It is estimated that 42 percent of people currently receiving Newstart — well over half a million — are too sick or disabled to perform full-time work.

Thanks to its unique combination of economic rationalism and cruelty, the “robodebt” scheme sparked particular controversy. Since 2016, the federal government has been illegally extorting welfare recipients with automated debts — many of which were found to be greatly inflated or simply false. Despite being grossly error-prone, the burden has fallen on the debt recipient to point out the error, an arduous and intimidating task that can take hundreds of stressful hours to solve. Debts in turn are sold on to private collection agencies, who harass debtors and take money out of their annual income tax returns. These robodebts — which can amount to tens of thousands of dollars — continue to push unemployed Australians to the point of suicide.

Centrelink (the government agency that administers welfare) is notorious for its nasty bureaucracy. Its compliance officers work to performance targets aimed at pushing people off welfare. Indeed, in order to keep their meagre entitlements, Newstart recipients have to fulfill the most onerous set of requirements in the developed world. Last financial year alone, over half a million unemployed workers had their payments automatically suspended for failing to meet the full barrage of job search requirements, agency appointments, and “workfare” obligations.

Workfare includes Work for the Dole, a particularly grueling program that demands participants perform up to twenty-five hours a week of free labor. Even though 64 percent of Work for the Dole activities have been found to fail basic safety standards, job seekers are to participate under pain of benefits sanctions and even cancellation. Unsurprisingly, tragedies occur: in 2016, a young unemployed man died on an unsafe Work for the Dole site, after falling headfirst off a moving trailer. Three and a half years later, his family is still waiting for answers from the federal government.

The original promise and intent of the welfare state — an unconditional basic safety net for those in need — is on course to obliteration. In Australia, social security policy is explicitly engineered to punish, immiserate, and endanger those who need the most support.

A New Movement

Despite the attacks levelled against them, unemployed workers are organizing at the political margins and building power to reshape the economic landscape in this country.

After years of grassroots movement building, last month the Australian Unemployed Workers’ Union (AUWU) issued a demand for immediate action on poverty. Over four days, jobless and homeless Australians met with over thirty politicians and shared personal stories about the horrors of the welfare system. This made history: it was the first time Newstart recipients had confronted any of their representatives in Canberra face-to-face.

Against all odds, low-income activists across the country have been making significant political advances: it is their campaigns that have triggered senate inquiries into Newstart and robodebt. The AUWU and the Anti-Poverty Network have successfully lobbied more than thirty-five local councils, securing their advocacy in the struggle to raise income support. This has galvanized communities to fight back against the government’s attacks on their welfare.

Groups like the Anti-Poverty Network and the AUWU have hosted hundreds of local events, forums, and protests to throw light on the poverty crisis sweeping the country. As a result of their work, politicians can no longer hide from their shameful treatment of the poor.

Welfare-rights advocates are also shifting public opinion. Recent polls show that the majority of Australians across the political spectrum now believe that the government must immediately act to increase unemployment benefits.

There is now huge potential for welfare-rights advocates to seize this shift in public mood, and continue to build pressure on all sides of politics to address the failings of our social security system.

Perhaps most importantly, the AUWU has thrown its support behind calls for a Green Jobs Guarantee, popularizing calls made internationally by Jeremy Corbyn’s Labour Party and Bernie Sanders, while also outlining a vision for lasting structural changes to the economy that could eradicate poverty and unemployment.

It’s hard to predict what will happen next. In the Morrison era, it’s likely that things will get worse before they get better, but one thing is certain. The courageous work of unemployed activists not only gives lie to the myth of the dole bludger, it represents the best challenge to restoring welfare rights.