Introduction by Croakey: Australians will be warned of tough economic times ahead in Treasurer Jim Chalmer’s economic statement to Parliament on 28 July, as inflation outstrips any likely increases in wages, and cost-of-living pressures intensify.
For those Australians on Job Seeker, the news is particularly grim, as observed below by Amy Remeikis, a journalist with The Guardian Australia.
Fiona Carberry, a former policy advisor to the Keating Government, has taken the liberty of drafting “a charter letter” from the Prime Minister to the new Minister for Social Services, Amanda Rishworth. The charter letter is customarily written by the Prime Minister to each minister following an election.
Dear Minister,
Now that you have been sworn in as Minister for Social Services, convention dictates that I set out my expectations of what you will achieve in your portfolio in this charter letter. Think of it as a performance agreement against which you will be judged by me, your colleagues in the ministry and the caucus, and most importantly, the Australian people at the next election.
I expect you will implement our election commitments as the highest priority; honouring our promises is a basic test of integrity. I know Labor disappointed many people during the election campaign by back-peddling on our earlier commitment to review the rate of JobSeeker Payment. Since winning the election, I have had a change of heart on this matter. Raising the JobSeeker rate is the most important election commitment that we didn’t make in the Social Services portfolio, and I now want us to surprise the Australian people by including it in our first Budget later this year. In my Budget reply speech, I said Labor cares – now it’s time to show it.
Since becoming PM, the knowledge that a Labor Government is consigning around 830,000 people on JobSeeker Payment to continuing impoverishment is pricking my conscience. I toss and turn in my new King size bed in The Lodge. Sometimes I wake from disturbing dreams. Last night Bob Hawke appeared. He was whispering “by 1990, no Australian child will live in poverty”. The next scene in the dream was my victory speech on 21 May 2022, but the audience was an angry mob of unemployed people chanting “no-one left behind.” I woke in a cold sweat with my heart racing and hardly slept a wink the rest of the night. I don’t need a psychologist to diagnose insomnia induced by cognitive dissonance.
Tonight, as I was driven through The Lodge gates in C1, the Prime Minister’s BMW, I thought about the many unemployed people who can’t afford to fill-up their cars with petrol at well over $2 per litre. I lost my appetite during my evening meal cooked by The Lodge staff, as I imagined hungry jobseekers and their families who can’t afford a lettuce at $11. I’m now settled into the upholstered armchair to read another pile of briefings from my Department, with Toto at my feet, contented with a belly full of My Dog Classic Lamb. While we’re snug in the warmth of the gas heated lounge on this sub-zero night in Canberra, I know there are many cold, shivering jobseekers sleeping rough, or not turning on their heating because their meagre income support isn’t enough to pay extortionate energy bills.
All this comfort and grandeur in the PM’s residence is a far cry from my childhood in public housing with a sole parent. I gaze at the framed photo of my mother on the antique sideboard. Maryanne would be so proud of me getting the top job and, given that she instilled social justice ethics in me, she’d be bitterly disappointed if I didn’t use my prime ministerial authority to improve the lot of Australian society’s poorest.
I don’t want to be a Prime Minister who loses touch with how the typical Australian lives. I don’t want you to be a Minister who declares that it’s possible to live on $46 a day (the amount we pay single JobSeekers) as one of your Labor predecessors did; we both know that’s untrue.
Raising the JobSeeker rate would be in keeping with our promise to address cost of living pressures: astronomical increases in the cost of essentials like petrol, housing and energy, are grinding unemployed people into even worse poverty. My departmental advisers tell me that your departmental advisers (and others) are likely to oppose a substantial increase to JobSeeker, on the basis that it will create a disincentive to work by raising what economists call the ‘reservation wage’, or the wages that unemployed people will ‘get out of bed’ to work for. You should insist on seeing evidence and use the finely-honed statistical analysis skills from your psychology degree to critique this simplistic notion that higher benefits beget indolence. We know that in the real world, many unemployed people face complex barriers to working, and motivation to work is not only about money.
It’s a fact that the gross minimum wage ($812.60 per week from 1 July 2022) is more than twice the rate of JobSeeker Payment $788.50 per fortnight (for those who get maximum rent assistance). We supported the Fair Work Commission’s recent ruling to raise the minimum wage by 5.2% to keep up with inflation because we believe the lowest paid workers should be paid more. Now we need to act to ensure that unemployed people receive adequate payments.
Accordingly, I invite you to bring forward to Cabinet, proposals to increase the rate of JobSeeker Payment for our Government’s first Budget in October, including the cost of each option. I would like to see an option that allows for a substantial increase this year while the unemployment rate is relatively low (3.5%-a figure I now memorise each month), followed by more modest increases over the forward estimates period until the JobSeeker rate achieves parity with the higher pension rate. This would bring it up to an amount that allows a modest but adequate standard of living; one which enables people to have a roof over their head, put food on the table, and pay for other necessities such as power bills.
I would also like you to include options for increasing rent assistance, as there is an urgent need to make rental housing affordable for people on income support. Furthermore, I would like you to review the indexation arrangements for all payments to ensure that they are adequately responsive to increases in the costs of living over time. Let’s call it ‘The ALBO’ – Adequate Living Benefit Options submission.
I’ve said I want us to govern differently. I don’t want to play the same old Budget game in which the rule is to spend $1 you have to save $1 in your portfolio. In breaking with this convention, I don’t want spending proposals in The ALBO submission to be offset with punitive savings measures; the bottom has fallen out of that rotten barrel (think Robodebt!).
I want the election of the Albanese Labor Government to herald a new era of fairness and compassion, particularly in the treatment of those on income support. Let’s stop tightening the screws on poor welfare recipients while doling out tax cuts and superannuation perks to the wealthy, and allowing large corporations and companies to make mega-profits yet pay no tax. This is what will differentiate us from the former Government. It sticks in my craw to retain the former Government’s Stage 3 tax cuts; however, I will keep my word on that, and I will also have a word with the Treasurer about new revenue-raising measures such as a windfall super-profits tax, including on profiteering gas exporters, to ensure that the tax-transfer system works properly to reduce inequality.
I can sleep easy now that my dissonance is resolved. I look forward to reading The ALBO submission.
Yours in solidarity,
Anthony Albanese
• Fiona Carberry was a social worker in the Department of Social Security, and spent 11 long winters living and working in Canberra as a policy adviser, primarily on income support, in the Department of the Prime Minister and Cabinet, the DSS, and the Department of Family and Community Services. She has a Master of Public Policy from the University of Melbourne. She currently works as a psychologist. See her previous article at Croakey: Commonwealth employment of people with disability goes backwards.
See Croakey’s archive of articles on poverty and health
