Media coverage - The Newcastle Herald: System fails jobless on disability support

As we prepare for tonight’s Budget, Mission Australia’s CEO Toby Hall says it’s time to take the emotion out of the welfare reform debate and realise the need to offer disability support pension recipients who do have some capacity to work intensive assistance and incentives to encourage them back into the workforce. After all, he argues, a welfare system that continues to let people avoid participating in the community does them – and everyone in the community – a disservice.

Here’s what Toby has to say in today’s Newcastle Herald.

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There’s no doubt welfare reform is an emotive issue.

Last week I made some comments partly about the need for any such reforms in the government’s upcoming budget to look at re-engaging the large number of people on the disability support pension who have some capacity to work.

It was interesting how some immediately and misguidedly interpreted my comments as “welfare-bashing”.

It’s a shame that such strong emotions have got in the way of us openly discussing how the system has allowed the number of disability pension recipients to balloon to about 800,000 and has failed abysmally to look for potential solutions to the problem.

So let’s take the emotion out of it and look at the problem with a fresh set of eyes.

There is no question that the majority of people in receipt of disability pensions are genuinely disabled and require significant levels of support. In fact, we believe there is a case for greater levels of assistance for this group.

However, over the years, successive governments and a failing welfare system have allowed thousands of people without serious disabilities to move from the dole to receiving disability pensions when they are not engaged in looking for work. This is despite the fact they might have a capacity for employment and their issues could be overcome with intensive support.

The numbers are staggering. In 1982, almost 217,000 people were receiving disability pensions. By 2001 it had reached 578,000 and is now close to 800,000.

In those 27 years, Australia’s population has risen by 44 per cent, and yet the numbers on the disability pension increased 250 per cent.

We do not seek to stigmatise these people or blame them for being moved on to disability pensions – it is the system’s fault for letting this happen.

Disability pension recipients with the capacity for work are not malingerers. They are not “rorters”. We recognise this group of people have genuine barriers to employment that they need support in overcoming.

But they can be overcome. So what’s stopping us from trying it?

There is no doubt that a fair Australia must have an adequate safety net that provides unemployed, sick, disabled and vulnerable people with the support they need.

But let's not pretend that too much time spent on welfare – particularly for people who are physically and intellectually able to work – will not have a dramatic impact on a person's health and wellbeing.

And a welfare system that continues to let people capable of social, economic and community participation avoid such contact does them – and all of us – a disservice.

To illustrate the dramatic health impacts involved, the Australasian Faculty of Occupational and Environmental Medicine released a report last year which showed that long-term joblessness significantly increases the risk of heart disease, lung cancer and suicide.

Further still, suicide among young men out of work for six months or more increases dramatically.

We need to better assist job seekers to stem the flow of people moving on to disability pensions.

In a recent Mission Australia survey, almost one-third of our job seekers had been incorrectly assessed by Centrelink.

Poor initial assessment of job seekers can easily lead to individuals being incorrectly moved on to disability support pensions and from there it’s a quick path to entrenched joblessness.

We need to offer disability support pension recipients - those who do have some capacity to work – intensive assistance and incentives to encourage them back into the workforce.

One of our recommendations is to create a new stream in the employment service system to offer the specialised help required.

Recent studies show that up to 85 per cent of people experiencing serious mental health issues can return to work or study with the right help.

If we get in early enough and provide the right help we’re talking about setting people up for long-term, sustainable careers.

An unproductive life destroys a person and can spread like a cancer through their family and community.

We only need to look at the destruction and decay that passive welfare has created in some Aboriginal communities and suburbs on our city fringes.

We all know this – governments know it, community agencies know it, the public senses it – and with any luck tonight’s budget will be the start of doing something practical about it.

Story originally published 10 May 2011 in the Newcastle Herald.

Pretend welfare reform will do nothing for jobless

Welfare reform is back on the agenda in a big way – or so it seems.

Prime Minister Julia Gillard recently stared down colleagues who wanted her to water down tougher penalties for unemployed people who failed to meet their job-seeking obligations.

And yesterday Opposition Leader Tony Abbott raised a number of proposals including getting rid of unemployment benefits in areas where work is plentiful.

All interesting stuff – but is it real welfare reform? Not by a long shot.

What we’re seeing here is the pretence of welfare reform. Action at the margins aimed at addressing some of the challenges facing the country in terms of workforce participation but nothing that will make a serious and long-lasting difference.

Australia needs root-and-branch welfare reform – reform that tackles the complexity of the income support system including how it interacts with the tax system, that reconsiders and possibly reinvents the nation’s approach to supporting disabled people, that takes a balanced approach to assisting long-term unemployed people into the workforce and doesn’t fall into the trap of ‘‘all stick and no carrot’’.

The last attempt at wholesale reform – on the back of the McClure Report 11 years ago – was ultimately shelved by the Howard government.

The reforms recommended by Patrick McClure, which aimed to leave no income support recipient worse off, were rejected in favour of a piecemeal approach that favoured penalties over incentives.

Eleven years on, we’re still wrestling with the same old issues.

Too many jobless families, too many people on disability support, too many long-term unemployed people wasting away without fulfilling their potential.

If there’s one set of statistics that exposes the ongoing failure of Australia’s welfare system it’s the extraordinary growth in the numbers of people receiving the Disability Support Pension (DSP) in the past 20 years.

In 1991 there were a little more than 300,000 DSP recipients. Twenty years later that number is rapidly approaching 800,000.

During that time Australia’s population grew by more than 30 per cent while disability pension numbers rose by more than 130 per cent.

As a recent report by the Whitlam Institute makes clear: ‘‘Over 56 per cent of people moving on the DSP have moved to this benefit from another income support payment – over 35 per cent from an unemployment benefit. They have moved from a benefit where the search for work is expected to one where it is not.’’

The numbers of people on the DSP are growing without check. More of the same isn’t going to address this problem and nor are simplistic suggestions to withdraw income support in regions where jobs like fruit picking are available.

What nobody wants to admit is that real welfare reform is expensive – hideously so – but then even more financially debilitating is letting the current situation continue.

But if we’re not in a position to fund these changes now – when Australia’s economy leads the world and we stand on the cusp of an extraordinary commodities boom – then when?

Many DSP recipients want to work. The keys to reaching these hundreds of thousands of people are to make sure they receive the training they need to fill vacancies in industries starved of employees; that they’re not financially worse off as they make the move to employment; and that they get the support they need for non-vocational issues.

In other words, we need to provide DSP recipients who are capable of work with a pathway to employment.

Part of the solution could be found in the area of social procurement – governments and businesses providing a social outcome when they buy a good or service.

There is plenty of scope for government to show leadership and provide thousands of employment and work experience opportunities for people locked out of the labour market by procuring goods or staff that deliver a social dividend.

Then there is the vexing issue of effective marginal tax rates – the perversity of people on low incomes facing higher tax rates than wealthy individuals as they move into the workforce simply because of the way the tax and income support systems interact.

How can we expect people on benefits to pursue work when they are slugged financially for their efforts? Where’s the incentive?

It’s not my desire to be uncharitable. I’m glad that welfare reform is being discussed. It recognises at least that our leaders are aware that there is a problem.

Much of what the Prime Minister and the Opposition Leader are talking about can be achieved through changes to the nation’s employment service system – that’s absolutely appropriate and sensible.

But let’s not pretend it’s real welfare reform.

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Toby Hall is the Chief Executive Officer of Mission Australia


This piece was published in the National Times on 1 April 2011

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Opinion: Time for fresh thoughts on welfare reform

Eleven years after the last major report into reforming Australia’s welfare system it’s clear we’re still stuck with an approach that doesn’t work – for the country or the individuals and families it’s meant to help.

Sure, the past decade has seen some positive reforms, but we still have too many jobless families, too many people on disability support, too many long-term unemployed people wasting away without fulfilling their full potential.

Through the McClure Report, published in 1999, Australia had the chance for root and branch reform of Australia’s income support system – but we squibbed it.

It’s now time to re-apply ourselves to the challenge.

But let’s not be satisfied with simply tinkering around the edges.

Why not recast a radically different income support system that works for people instead of undermining them?

There is no doubt that a fair Australia must have an adequate safety net that provides unemployed, sick, disabled and vulnerable people with the support they need.

But let’s not kid ourselves that too long a time spent on welfare – particularly for people who are physically and intellectually able to work – doesn’t have a dramatic impact on a person’s health and well-being.

A report released last week by the Australasian Faculty of Occupational and Environmental Medicine stated that long-term joblessness significantly increases the risk of heart disease, lung cancer and suicide.

And that suicide among young men out of work for six months or more increases 40-fold.

An unproductive life destroys a person and can spread like a cancer through their family and community.

Witness the destruction and decay passive welfare has created in some Aboriginal communities and suburbs on our metro fringes.

We all know this – governments know it, community agencies know it, the public senses it…and yet it seems we’re determined to persist with the system as it stands.

Take the Disability Support Pension for example.

Between 1996 and 2007 the number of people receiving the Disability Support Pension (DSP) actually increased from 500,000 to more than 700,000.

Growth in the number of DSP recipients was greater than in any other pension category in the decade to 2007.

It’s estimated that 20 per cent of this total – 140,000 people – are thought to be capable of work.

We can’t let this situation go on.

Recently Mission Australia was asked to report on our experiences of job seekers complying with their obligations to look for work while receiving income support.

These obligations are known as a job seeker’s ‘activity test’.

Our frontline staff told us that a significant number of job seekers were using multiple occurrences of illness as a reason for not looking for work but failing to provide the required medical certificates to support their claims.

And if that wasn’t enough, in a large number of cases where we brought such behaviour to Centrelink’s attention for action the matter was overturned.

In the six months between July and December 2009, Mission Australia submitted more than 20,000 reports to Centrelink – known as Participation Reports – for issues of job seekers not living up to their obligations.

According to our figures, Centrelink overturned 45 per cent of these.

Now, on some occasions, having our reports overturned is to be expected.

But 45 per cent?

It is reasonable that unemployed people on income support should be required to follow a set of simple rules when seeking work.

But the rules must be applied – and at the moment it appears they’re not.

I was pleased to see during the election campaign Labor commit to a tightening of the compliance regime as well as the potential to suspend a jobseeker’s income support on their first failure to meet their obligations.

In essence a sharp message to say ‘This is a responsibility that needs to be taken seriously’.

The government should also consider moving all job seekers not exempt from the activity test into community service or work experience within three months of becoming unemployed – not 12 months as is currently the case.

This would help avoid the loss of productivity and engagement that comes from passive welfare. It’s as much about keeping an individual’s work skills up as it is about maintaining their self-esteem and avoiding isolation and depression.

Finally, we need to focus on income support obligations that bolster families and children. Despite the naysayers, I believe linking the receipt of benefits to basic things like school attendance or the payment of rent can make sense.

To this end I think Jenny Macklin’s efforts with income quarantining should be supported.

But we also need to make sure such measures are complemented by well-resourced intensive case management and access to incentives such as matched savings and financial counselling.

A fair and well-managed income support system offers hope for people in need.

An income support system that continues to let people capable of social, economic and community participation avoid such contact does them – and all of us – a grave disservice.

Welfare reform is undoubtedly one of the most difficult areas of policy to address – but address it we must – not for my sake, or the sake of taxpayers, but the sake of the individuals, families and communities at the mercy of a system that seems determined to let them down.

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Toby Hall is the Chief Executive Officer of Mission Australia

This piece was published in the Sydney Morning Herald on 20th September 2010

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Opinion: Welfare reform 10 years on - from our CEO, Toby Hall

A significant milestone in our recent political history passed without fanfare this week. It’s been 10 years since the Howard Government launched Australia on the path of welfare reform.

A decade down the track we might consider whether it’s an anniversary worth celebrating.

The independent committee charged by the government to make recommendations for change – a series of proposals known as the McClure Report – came back with three objectives for welfare reform: significant reductions in the number of jobless families and households; significant reductions in the proportion of the working age population on income support; and stronger communities with improved social and economic participation.

Perhaps uniquely for a major report on such a contentious issue it was greeted positively, not only by both sides of politics, but also by the business and community sectors.

It offered government a comprehensive road map for reform – a systematic approach to what is a highly complex problem. At the time there was real optimism for change.

But the Howard Government’s failure to embrace the McClure Report as a whole – including some of its toughest reforms – has left many of its targets either unmet or compromised.

In terms of jobless families, there’s no doubt the number has fallen since the late 90s. Increasing employment and welfare to work measures have had an impact but numbers are still too high.

Australia has the second-highest percentage of children living in jobless families in the developed world.

There are an estimated 543,000 Australian children currently in this position.

Around one in seven Australian children lives in a jobless family – one in two for single parent households – with all the associated implications that carries for future social and economic development.

These are hardly significant reductions.

And remember these numbers have remained stubbornly high through some of the best economic times Australia has experienced.

It’s further evidence that the problems of jobless families and job poor communities won’t be overcome by economic growth alone.
In terms of working age people heavily reliant on income support – again, while numbers have declined overall – there remain major challenges in supporting key groups into work.

Between 1996 and 2007 the number of people receiving the Disability Support Pension actually increased from 500,000 to more than 700,000 – greater growth than in any other pension category.

It’s estimated that 20 per cent of this total – 140,000 people – are thought to be capable of work, but we’ve failed to reach them.

And as for those vulnerable communities that stood to benefit most from the roll-out of the McClure Report’s recommendations, it’s Mission Australia’s experience that we’re a still a long way off from achieving its lofty goals of social and economic transformation.

Despite a strong start, the previous government’s approach to welfare reform was unbalanced and lacked coordination and integration. Ten years on we’ve failed to reap its full benefits and in some cases have gone backwards.

The current administration has the opportunity – particularly through its social inclusion agenda and the Henry Tax Review – to finish the job.

Among other things, that means simplifying the overly complex benefits system and introducing a single income support payment with a needs-based ‘add on’ bonus according to individual or family circumstances.

It also means removing remaining barriers to participation – such as the disincentives that exist in the current tax system for welfare recipients seeking to return to work.

We must tackle effective marginal tax rates so when an individual moves from welfare to employment they don’t suffer the double hit of income tax and a dramatic reduction in benefits.

As the majority of disadvantaged Australians are moving from income support to low paying jobs, the combination of income tax and a reduction in benefits is crippling.

And we need the Rudd Government to deliver its disability employment strategy.

While completing these reforms will be challenging and costly they will ultimately benefit us all via greater economic and social participation.

But if we don’t find the political will to see them through the gap between the job rich and job poor will become ever wider, condemning our most vulnerable communities to sclerotic levels of disadvantage.

Toby Hall, CEO, Mission Australia