By Lisa Macdonald
In his budget speech, treasurer Peter Costello admitted without hesitation that unemployment will "probably remain at around 8%". (The latest ABS figures estimate 8.6%, roughly 780,000 people.)
After decades of promises by the major parties, especially during election campaigns, to reduce unemployment, was this a case of a government deciding to tell the truth for once?
No. On the contrary, real unemployment is set to grow substantially. It is simply not possible to shed tens of thousands of jobs from the public sector, while large Â鶹´«Ã½ of private industry are also "downsizing", and not produce a major increase in the number of unemployed.
The Coalition knows this. In a leaked August document marked "Cabinet in confidence", it admits that the abolition of labour market programs in the budget may, by itself, lead to increased unemployment.
More than a decade of unemployment above 5%, combined with the anti-"dole bludger" campaigns in the bosses' media during the '80s and '90s, has undoubtedly created a climate of mass resignation to, if not acceptance of, permanent unemployment. Nevertheless, the persistently high level of unemployment continues to rate as people's number one concern in almost all public opinion polls.
The problem facing the Coalition therefore is how to minimise the political and economic fallout of the inevitable unemployment growth — how to keep the official figures stable and cut expenditure on unemployment benefits.
The former ALP government established Working Nation, a range of labour market programs, to rotate unemployed people through "training" schemes. There were few permanent jobs at the end of the training, but it kept a significant number of people off the official figures. It also helped to ensure that fewer of the unemployed would drop out of the work force completely — and thus cease to compete for jobs and act as a downward pressure on wages.
Two aims
The Coalition is pursuing a different course, one equally devoid of real job creation and even more brutal in its effect on unemployed people. By simultaneously tightening the eligibility criteria for unemployment benefits, reducing the level of benefits and forcing more jobless people off benefits for longer periods of time, the Coalition intends to cut public expenditure on social security and conceal the growing number of unemployed.
The "savings" from penalising people on unemployment benefits and slashing $1.5 billion out of labour market programs over the next two years account for 15% of the budget's total net saving.
The cuts will especially affect the long-term unemployed, who face many more barriers to re-entering work. Of the 780,000 officially unemployed, 250,000 (around 35%) are long-term unemployed. Many more have probably become demoralised and dropped into the ranks of the hidden unemployed. Estimates by social welfare organisations of the real level of unemployment range from 15 to 30% higher than the official figures.
Apart from the cuts to labour market programs, the government's main budget "savings" will come from reducing the amount of unemployment payments in three ways: (1) paying fewer people; (2) reducing the level of payments, and (3) paying for less of the time that people are actually unemployed (see table).
(1) The Welfare Rights Centre calculates that the government can make its Department of Social Security savings target only if it cuts 200,000 people off unemployment benefits for six weeks of each year.
Rather than catch Senator Newman's famous 19,500 dole-bludgers — not one person accused of fraud in the 300 phone calls received during the "dob in a dole bludger" hot-line trial was found to have breached regulations — the tougher activity test will simply force unemployed people to look endlessly for non-existent jobs and enable the department to breach more people more often.
(2) The rent assistance reduction is a backdoor way of cutting unemployment benefits by $24 per fortnight for single people and will have a huge impact on their already tight budgets.
In addition to the abolition of the employment entry payment and the earnings credit schemes, extra assistance entitlements for specially disadvantaged job seekers will also be reviewed with payments expected to be reduced by $10 million in 1997.
But it is young people who are earmarked for "special" punishment. Sixty-five per cent (530,000) of the officially unemployed are under 25 years old. While officially youth unemployment is currently around 30% (double that in some regions and cities), July 1995 ABS data reveal that only 21.9% of those young people actually looking for full-time work were not attending school, TAFE or university and so were officially classified as unemployed.
The first blow is the replacement, from January 1998, of unemployment benefits with a reduced youth allowance for job seekers under 21. If you are under 18, your allowance will be paid to your parents unless they advise otherwise.
The allowance will be means-tested on parental income, disqualifying many young people and forcing them to live off their parents. The government has yet to indicate what happens to the young unemployed whose parents refuse to support them.
(3) Before the budget, the government announced a two-year wait for newly arrived migrants before they can receive unemployment benefits. Now also forced to wait will be the thousands of people who are about to lose their jobs and are "lucky" enough to receive a redundancy pay-out, or have more than $5000 in savings, or have accrued paid annual leave. They will be required to live off these for months before qualifying for unemployment benefits.
Divide and conquer
With this massive attack on the unemployed, the Coalition is deepening the division between the haves and the have nots. Its ideological assault against supposed dole bludgers will serve the goals of big business by further breaking down working-class solidarity as people desperately seeking work are pitched against those with (often tenuous) jobs, and "bludgers on the system" are vilified among the "hard-working taxpayers".
If successful, this divide and conquer strategy will further strengthen the government's hand to attack all working people. The bosses' threat that "there are plenty of others who would love your job" will be increasingly used to pacify workers wanting to struggle against declining wages and conditions, and the unemployed — isolated, disorganised, poorly resourced and ground down with the struggle to survive — will be rendered even softer targets for a government intent on getting blood out of every stone.
These attacks also aim to erode the more general acceptance that society has a responsibility to look after the less fortunate. It aims to transform the right to social support into the wrong of "welfare reliance".
Such an outcome is not inevitable, however. The "Cabinet in confidence" document makes it clear that the introduction of the unemployment "reforms" will be influenced by the reaction from clients and "possible industrial action". It acknowledges that the only force with the power to defend the rights and living standards of those without work is those with work who are organised into trade unions.
Unless the trade union movement takes up the broader task of organising and providing the resources for unemployed workers to fight back, alongside workers fighting to defend existing jobs and employment conditions, ordinary people, both in and out of the work force, will continue to be bashed.