Australia — John
Howard's attention while overseas might have been
publicly on free trade agreements and Gallipoli, but
privately he has had plenty of domestic homework about
the welfare-to-work package - the policy centrepiece of
Peter Costello's 10th budget on May 10.
It is not unusual for budget
decisions to be worked on late, but this one is
especially important for both PM and
Treasurer.
Changing the rules for the
disability support pension and the parenting payment is
proving very complicated. And it's clearly politically
fraught - not least because it could push up
unemployment. No wonder there's last-minute
agonising.
The Government has a big
opportunity to advance welfare reform. Botch the job, and
it would be difficult to return to it. Do it well, and it
could be a building block for further change. Get this
wrong and the controversy could work against Peter
Costello just when he wants to look his best as future
prime minister.
There will be no restraint imposed
by the new Senate. But the nature of politics is that
when one constraint disappears, others (albeit not as
direct) can appear.
The coalition back bench is more
bolshie than last term, inclined to speak out when it
thinks mistakes have been made. And, despite the
Government's strong position, there's always the next
election to think about.
Some 700,000 people are on the
disability support pension and more than 600,000 (mostly
single mothers) on the parenting payment. This is too
many - good neither for the country nor for many
individuals.
As Costello keeps saying, with an
ageing population, we need to maximise the workforce. And
the path a better life is through work, where that's
possible. It's potentially the best way out of poverty
and isolation.
Having said that, attempting to get
the balance and detail right can end in a
mire.
Obviously, it's a very good time to
try to get people off welfare and into work, part-time or
full-time. Unemployment is low; the economy, though
slowing, is strong. Even in these circumstances, however,
and with a package that is full of training, child care
and other support to help people make the transition,
many won't be able to get jobs soon or perhaps
ever.
Labour might be in short supply and
the unemployment rate down to 5.1 per cent, but it's
still a market out there and employers will go first for
the most attractive candidates. The disabled, single
mothers whose child-caring responsibilities might
intrude, and older (often retrenched) people will still
start behind the eight ball.
The big political fear is that if
many seek and fail to get jobs, the Government could have
bad news on unemployment. Federal departments are divided
about the effect.
The Department of Employment and
Workplace Relations is optimistic about people getting
work. But Finance is believed to have produced
disappointingly low estimates of how many on welfare
would obtain jobs by the end of the forward estimates
period (2008-09).
The issue for Howard has become how
tough or soft the Government makes the "mutual
obligation" requirements it puts on these welfare
recipients.
After wondering whether to confine
the disability pension changes to new applicants, the
Government decided existing pensioners should be tested.
Now it is talking about making the test for them
voluntary.
It knows how sensitive the disabled
issue is, even if Costello goes on about bad backs. Last
week on SBS's /Insight,/ Costello emphasised that
disability pensioners who tried but failed to get work
"won't be prejudiced . . . they have to have the right to
come back on (to the disability support pension) and to
keep their concessions". This is more generous than the
cabinet's recent disposition. It would both reassure the
disabled and prevent unsuccessful job seekers swelling
the unemployment numbers.
Costello has sounded tougher on
sole parents. "A system that has no work requirement -
not even a part-time work requirement - for a parent of
school-age children is a very generous one and an
inappropriate one in a country with possible labour
shortages and the long-term ageing of the population," he
said last month.
But insisting on a part-time "work
requirement" for sole parents of primary school age
children has some knotty difficulties. Not least, it
doesn't seem to jell with the PM's philosophy. Howard has
always been big on choice for mothers who want to stay at
home. While he emphasises those with very young children,
his wife remained a full-time parent after their youngest
hit school age.
One cynic puts it this way. "If
you're married you can stay at home. If you've left your
husband, you have to work."
Single mothers will often have more
pressures on them than women in two-parent families. The
juggling act that any working mother must perform will be
harder without someone to help. Women on the parenting
payment will, by definition, be at the bottom of the heap
financially, most likely to get low-paid jobs and unable
to buy in services to assist them.
This doesn't negate the case for
trying to get sole parents into work or training, but
means the work capacity test the Government introduces
for sole parents with children in primary school needs to
be extremely flexible, taking account of parenting and
other responsibilities (such as any care the women might
give to aged parents).
Howard said a while ago that "we're
not in the business of forcing people to do things that
are unreasonable".
The word in Canberra is that the
work test for single parents won't end up too onerous. To
make it over-stiff would be excessively onerous for the
Government, which needs to find ways of encouraging
participation without pain.
