Redressing, not exacerbating, inequality is the real moral challenge for this government

The government is keen to push its omnibus savings bill through parliament. AAP/Mick Tsikas

A purported priority for this 45th parliament is to tackle the deficit, last encountered in the budget items just before the federal election campaign.

Would it be affected by the close result and odd voting patterns? No, the government claims – its win was the mandate it sought.

Prime Minister Malcolm Turnbull claimed that the passing of the budget repair bills was more than just political gain. He doubled down on his economic message ahead of parliament’s return, describing budget repair as a “fundamental moral challenge”. He demanded the opposition support the omnibus bill in its entirety, as Labor “assumed passage of it in its election costings document”.

This sets an odd tone for a “moral” claim, as the target of most of the bill’s proposed 24 cuts are the poor and vulnerable. This is in stark contrast to another bill for tax cuts for those earning A$80,000 plus.

These claimed priority items make it clear the government’s budget “repairs” will increase overall income inequities, and if supported by Labor, could further exacerbate the distrust of the “elites”.

The priorities in Turnbull’s speech seemed to focus on punishing the least powerful by cutting their payments. While picking on welfare recipients has been around for a long time, its current use is dicey, given that 24% of formal voters indicate increasing distrust of major parties.

Both here and overseas, there are disturbing signs of the damage of inequalities. The rising proportion of outlier candidates in the recent election match worldwide evidence that populism is rising in response to the increased inequities in the developed world – for example, the rise of Donald Trump.

The Brexit polls and data produced by the IMF suggest that the focus on market models may damage both economic growth and democratic legitimacy. And the current ABC Boyer Lectures, delivered by Michael Marmot, question whether inequalities undermine health and national well-being outcomes.

These all suggest that any government that fails to tackle emerging political and economic inequities may create more problems.

Who will be affected?

Buried in the governor-general’s speech opening this parliament is a brief mention of the cashless welfare card.

This is a further sign again of increased contempt for those who are not in paid work – and that is not just the unemployed. New data from the ABS family work status survey show there were around 329,200 “jobless” families with dependants in June 2015. In those families, there were 662,100 dependants aged less than 25 years, 85% of whom were children under 15.

In recent years, the proportion of jobless families with dependants has remained stable at around 11%. These cover carers, people with disabilities, the sick, students and parents with young or multiple children.

The omnibus bill – to which the government attached its hyperbolic demand for not leaving debts to our grandchildren – includes 24 items. Most of these, in a neat summary article, are described by Jessica Irvine as “24 shades of nasty”. Some are particularly toxic.

I have further summarised 13 of the meaner items below, with their proposed savings, which would add only just over half of the $6 billion or so expected to be saved over the four-year forward estimates. This is hardly serious deficit-cutting, but will cause real pain to those who rely on them.

  • cuts in support for students and earlier FEE-HELP repayment ($3.3 million);

  • abolish bonus for those getting off Newstart and holding a job for 12 months ($242.1 million);

  • no overlap period for those moving from Newstart to paid work ($61.5 million);

  • cuts to dental services ($52.4 million);

  • two-year wait for immigrants to claim welfare payments ($312.5 million);

  • cuts to paid parental leave ($133.7 million);

  • cuts to fringe benefits valuing for other payments ($132.1 million);

  • no backdating of Carers Allowance ($108.6 million);

  • cuts to family payments and other parental leave ($330.9 million);

  • cuts to income support for mentally ill people confined by serious criminal offence ($37.8 million);

  • cuts to energy supplement for recipients of disability support pension, carer and Newstart payments ($1.29 billion);

  • tighter subsidies for high-need aged-care residents ($80.5 million); and

  • tougher repayments of debts of welfare recipients ($157.8 million).

Apart from the Newstart savings, the forward estimates are not impressive. And the situation of those on Newstart is already grim, without further cuts.

An article in the SMH on research from the Brotherhood of St Laurence has found that 40% of recipients of employment services last year were mature-age Australians who spent more than a year on income support.

It pointed out that more than one-third of Newstart payments go to people who are not even expected to look for work as they are sick, caring for others, in training, or cannot look for work.

Another article shows increasing numbers of older people on Newstart (10,000 extra since 2012, with more than half staying on the payment for at least two years). All these data suggest that what was once seen as a short-term payment has now become long term for those who meet prejudice and lack opportunities in finding paid work.

Ignoring the fairness question at their peril

So why is the government making these cuts their “moral” demand for support? And why has Labor not offered clear opposition?

Despite the clear public and political responses to the basic unfairness of these and similar cuts in the 2014 budget, the government is pressing ahead with these measures by way of its wafer-thin majority. Have neither of the major parties has learned anything from the election?

Both major parties would be wise to listen to the messages coming from a grumpy electorate that has indicated it wants serious leadership, not just political game-playing and increased unfairness.


Eva Cox will be online for an Author Q&A between 11am and noon AEST on Friday, 9 September, 2016. Post any questions you have in the comments below.

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