Return to Lecture List

Opposition Action Plan

Fairness, opportunity and security are fundamental to the Labor lexicon and one of Curtin's greatest contributions was to transform these objectives into the everyday lives of Australians.

These objectives have never been, nor will they ever be, part of the conservatives' vocabulary or philosophy. This has never been more abundantly clear than with the recent release of the Opposition's economic action plan.

The Opposition's plan is a prescription for the politics of division and deprivation. It offers many thousands of Australians a future of perpetual poverty. It ignores the needs, aspirations and security of thousands of Australian families-those on low incomes, sole parents, Aborigines, the unemployed, ethnic and aged Australians.

Under the guise of reform and shallow rhetoric, the conservatives are promising to return Australia to the simple, yet divisive politics of the Menzies era. History has shown quite clearly that the Menzies period of Government was a sham for reform, providing benefits far less than the rhetoric claimed and creating a society of haves and have nots.

Peacock promises a return to the same-a return to the politics of the simplistic, the giveaway and the sham. Every Australian should compare this to the history and achievements of Labor Governments.

The Labor tradition is one of sustainable reform, addressing long term structural issues to build a solid basis for Australian society by providing opportunities, fairness, equity and security for all people no matter what their origins or circumstances.

Unlike the conservatives, Labor's program of reform does not pass judgement on people but offers them a future. Labor does not sentence people to a life of deprivation but offers equality of opportunity and the resources to permanently improve their lives.

The Opposition's recently released economic action plan is a vicious and brutal attack on Australian families.

Australian society is made up of all types of families. But what does the Opposition actually offer to all of Australia's families? What issues does it purport to solve? What is its analytical basis? Will it endure the passage of time?

Let me contrast what the Hawke Government has provided for Australian families with what the Opposition is promising.

Labor Government Achievements

Since 1983 more than 1.6 million jobs have been created, 65% of which have been full-time and 55% being taken up by women. Youth unemployment has been nearly halved from its record level of around 28% in early 1983. Women now have the highest labour force participation rate in our history. And we are now embarking on a major process of award restructuring which will provide more satisfying, skilled and better paid jobs.

Employment is the surest solution to poverty. Every opportunity should be provided to ensure that every Australian has that prospect.

In 1983 nearly 270,000 children were dependent on adults who were receiving unemployment benefits. In August 1989 that number had been reduced to less than 170,000. The employment record of the Federal Government has ensured a far more secure and fair future for those Australian families and their children.

The introduction of Medicare, a massive rebuilding of our health and community services, the creation of nearly 70,000 additional child care places, major improvements in education and training programs-these reforms have all been initiated in recognition of their importance to the quality of life for all Australians, particularly those most disadvantaged.

Unprecedented reform of the taxation system to improve its fairness, to stop tax avoidance and evasion used by the privileged, and to provide substantial increases in take-home pay for Australian workers, is a further example of major reform by the Federal Government for the benefit of families.

Similarly, the spread of superannuation, supported by the Federal Government, in combination with its recently announced retirement income policy provides for the first time for every Australian, both now and in the future, the basis for a decent and dignified standard of living in retirement.

Perhaps one of the least acknowledged Federal Government reforms has been the historic restructuring of family payments.

Family allowance payments have been simplified and substantially boosted. This has directly benefited nearly two million families with over 3.8 million children.

The lowest income families have also received levels of income support never before delivered by any Australian Government through the introduction of the Family Allowance Supplement (FAS). FAS-or its equivalent paid to families receiving a social security pension or benefit-provides, on average, an additional $50 a week tax free to over 500,000 families with over 1.2 million children.

This Federal Government has been the first in the history of Australia to set standards for family payments for those most in need and to pay them directly to the mother on a regular basis.

Furthermore, this Federal Government is the first to commit itself to the indexation of family payments which means that their value will not be eroded over time.

These historical family reforms will mean expenditure of nearly $3.5 billion in 1989-90 compared to barely $1.7 billion when we came to office.

Although these family reforms are significant in their own right, their beneficial impact for Australian families is further enhanced when considered in combination with the other major reforms of the Federal Government to which I have referred as well as others such as those for sole parent families.

Again for the first time, through the child support scheme, Australian sole parent families have the guarantee now of regular financial support from their former partner and the opportunity to re-enter the workforce to further improve their standard of living and secure their own and their children's future.

These examples of reform clearly indicate the policy approach of the Federal Government to Australian families-sustainable policies that do not treat all families as the same but explicitly recognise that different families need different things-and that needs change at different stages of our lives. Our policies are based on solid research and analysis. They will not be eroded over time nor be subjected to the whim of an annual budgetary cycle.

It is also a policy approach which has made one important fact clearer than ever-social security payments alone will not solve the problems faced by many low income families.

Australian family living standards are influenced by three elements-wages, taxes and social security payments. The Federal Government has restructured social policy to become an integral part of economic wages and taxation policies and hence, provide significant improvement for those families least well off.

The reforms announced as part of the April 1989 economic statement unashamedly show the Federal Government's commitment to the central role of family payments to maintain equity in the tax system, to counter a wages structure that takes no account of family responsibilities, and to redistribute to women who have major responsibility for children.

Any Government that attempted to overturn this policy approach for gender equity would ignore and repudiate 48 years of support by women for this program.

This policy approach also clearly indicates that not one policy or program can singularly redress inequity, increase fairness or improve opportunities.

Social policy reform, in conjunction with education and labour market programs, continued job growth and major improvements in health and community services have all combined to raise the quality of life for Australian families.

Our policy approach has set in place a structure which reflects the contemporary needs of all Australian families, their future needs and will ensure that they will not be placed in the precarious position of the past under conservative governments.

The Opposition is offering to blatantly destroy all of this-to return to the dark ages of conservative rule when change was purely for political expediency, directed to help those most powerful at the expense of those most in need.

No one questions additional expenditure on families, either through the tax or the social security system. The Government has chosen to follow Fraser in putting the bulk of its transfers to families on the outlay side, despite our overall emphasis on expenditure restraint. (We have now achieved ongoing savings in social security of more than $5 billion).

The issue is simply whether an additional transfer can be paid for and how effectively the money would be deployed.

We have overhauled the Family Allowance System to remove its complexity and the lack of indexation. We moved in July to the two-rate structure of $9 and $12 and, having completed the reform of the Family Allowance Supplement for low income families, moved to pay the allowances fortnightly and index the payment according to the Consumer Price Index.

The fact of the matter is that the reintroduction of a Child Tax Rebate will not be available to the mother when she needs the cash most. Indeed, we know from our research that often the mother never sees the benefit of tax rebates.

The key issue is how you pay for family transfer improvements. In the Government's case, we have an established record of reducing dependency, including massive improvements in the situation of the poorest women, that is sole parents-30% declared income in 1983, 60% do now-with more sole parents participating in the workforce than ever before.

Comparison with Opposition Policies

The Opposition speaks of hard decisions yet takes from the weak whose dependency it fails to address.

It prefers to cast the stigma of fraud over beneficiaries as a substitute for carefully thought out policy. It fails to state a policy on the indexation of its proposed Child Tax Rebate and thus opens to question its policy on the indexation of Family Allowance and Family Allowance Supplement.

The prospect is clear-as the Opposition seeks further expenditure cuts, as it has promised to do, it will wind back the Government's reforms of Family Allowance and Family Allowance Supplement.

Like every other conservative proposal there is no commitment to indexation, there is no guarantee to maintain its value. That's the real sham of their so-called reform-offer it now with glossy rhetoric but for how long will it be of any value to those who would actually receive it?

It must be remembered that not all families would receive the proposed tax rebate-especially those 20% of families who don't pay tax and who happen to be those most in need.

The Opposition's proposal is a reversal of their attitude in 1976 when they converted the Child Tax Rebate system to one of Family Allowances. At that time they reduced the value of the rebate to pay Family Allowance to those families who didn't pay tax-the current proposal is the exact reverse. Low income families won't receive the rebate. High income families will.

In essence the prime motive of the conservatives is to substitute politics for policy-proposing superficially attractive ideas of no benefit to the majority or those most in need.

Sadly there is no easier target than the unemployed, no more simplistic idea than suggesting that someone's unemployment benefit be terminated after a period of time-any period of time-say nine months.

Such a suggestion is totally devoid of any notion of fairness or equity. It also makes no attempt to grapple with the debilitating and scarring effects of unemployment or offer any hope for a future beyond some sort of scrapheap.

This Government has adopted a totally different approach to income support for the unemployed-an approach which links labour market programs and education and training opportunities with income support.

The primary objective of this approach has been to create a more active system of income support which provides incentives and opportunities for unemployed people to enter employment and reduce their dependence on income support.

This has been balanced by the need to maintain adequacy and equity for the most needy. At the same time the Government has continually sought to improve the administrative efficiency and integrity of the unemployment benefit system, as well as to reduce fraud and abuse.

Increased emphasis has been placed on review processes and more effective work test arrangements, including closer links between the Commonwealth Employment Service and the Department of Social Security.

Incentives for unemployed people to take on part-time or casual work, to move into full-time employment and to participate in training have also been introduced, along with specific programs such as Newstart and Jet which tackle the labour market barriers for the most disadvantaged-the long-term unemployed and sole parents.

This approach is already showing a major impact on the number of long-term unemployed. In 1986 244,000 had been unemployed for more than 12 months. By May 1989 this number had fallen to 172,000.

In 1984 the total number of people receiving unemployment benefits peaked at around 670,000. As of Friday this number had fallen to 363,000-a massive drop in anyone's terms.

Our approach is about making checks more regular but tailoring assistance to the specific needs of the individual. The long-term unemployed are not just numbers to be rubbed out of the system using the convenient device of any arbitrary cut-off point. The long-term unemployed are people within our community. One in four are over the age of 45. One in five have dependent children-90,000 children in total. Forty per cent are married.

The Opposition's proposal is the exact antithesis of our approach. Rather than suggesting further reform of the unemployment benefit system and even greater linkages to the labour market, the Opposition propose the poverty trap of special benefit-a payment which is simply not designed to support people through the transition to part-time employment or training programs. Special benefit is not work-tested and is intended to provide emergency assistance for relatively short periods.

Their proposal is not based on any analysis or understanding of the needs of the unemployed. Instead, the Opposition intend to quadruple the numbers on special benefit which will lead to total expenditure on this payment increasing from its current level of $225 million a year to well over $1 billion a year.

This proposal by the Opposition compares with their previous approach when they were last in Government. At that time the conservatives removed all the controls and checks from the Unemployment Benefit system, including the work test which proves that people are genuinely looking for work. The result-a massive blowout in expenditure on unemployment benefits. This time they propose a massive blowout in expenditure on special benefit.

Previously, the Opposition spokesperson for Social Security has called for easing of social security income tests to encourage people to maintain their attachment to the labour market. Last week's Opposition document is explicitly suggesting tougher income testing and hence exclusion from the mainstream of society for thousands of people and their families.

While looking for a tougher approach, the conservatives-because of total lack of understanding and policy analysis-have chosen to substitute a payment which is discretionary and not work-tested. In effect this multiplies the number of hard decisions to be made by Departmental staff who must use their discretion. This would be an extremely labour intensive process requiring a massive increase in staff. It is a strange route to go when the Opposition is intending to cut the Public Service.

What this means is that the conservatives are labelling thousands of people as unemployable, deserving of no attention or assistance, marginalised with no hope or opportunity for their own or their children's future.

The conservatives claim a compassionate approach. Is it compassionate to relegate thousands of Australians to the vicious cycle of poverty?

What would be the prospects for a 45 year old worker who loses his job after 20 years with the same company? The Opposition proposes that this person uses up all annual and long service leave entitlements before becoming eligible for unemployment benefit. It may therefore be six months, or more, before he is eligible. Then it would take at least three weeks before he would receive his first payment. After nine months without any assistance to re-enter the labour market he is then labelled by the Opposition as a bludger. If he has any savings left he will not be eligible for special benefit. His retirement savings will be eaten away before the normal retirement age. Hence no prospects of a higher age pension under the conservatives' proposed age pensioner bonus plan.

Harsher prospects are faced by those who are sick or who have a disability. About 24,000 invalid pensioners each year are to be accused of fraud and removed from payment, apparently on the assumption that people have been misrepresenting their circumstances. No provision is made under the Opposition's proposal to provide any other form of income support should they lose this payment.

Contrast this with the Government's approach of careful review, analysis and development of programs that will allow people with disabilities to take an active part in the life of their community. Fundamental to the Government's approach is the belief that it is vital for people with disabilities to be provided with the incentives and opportunities to develop their individual skills and potential.

The promises of the Opposition for families amount to little more than a list phrased to appeal in the most simplistic terms. They are promises created in a policy vacuum which will not benefit all Australian families, particularly those most in need.

And how are they proposing to finance these promises? By fingering the poorest of our community, calling them bludgers and cheats and smugly handing over the income entitlements of the poorest to boost the situation of the wealthiest.

It is unemployed families and the disabled who will pay for the children of the high income earners-that is the conservative definition of social justice. Who will pay for the children of the unemployed and the disabled? For the Opposition, the children of families most in need are invisible.

For a time both John Howard and Andrew Peacock (twice) talked about fairness and opportunity; even social justice gets a footnote in Future Directions. They both feigned a belief in policy.

Last week's policy document blows any such pretensions. The discipline of policy and sustainable reform is to be ignored and only the political calculus is to be relevant. There is nothing about making a fair go for all a reality and redressing inequalities in Australian society.

In stark contrast to the conservatives the Federal Labor Government maintains a firm belief that all Australians are entitled to genuine equality of treatment and opportunity in all spheres of life. That is the social justice approach of a Labor Government. Its record since 1983 proves this.

Social justice is about being fair, about providing opportunities, about increasing equity and about providing security. It is about sustained social progress concurrent with economic progress. It is about building consensus in the community for long-term change. Social justice is also about tackling the issues which confront the community without dividing it and opening it up to large scale confrontation.

John Curtin set the social justice standards for future Labor governments. Chifley followed in that tradition and the Whitlam Government provided a more contemporary dimension to the implementation of Labor goals and objectives. The Hawke Government during the last six and a half years has clearly demonstrated further expression of the standards set by Curtin. Its reforms are enduring and shaped to redress the legacy of inequity which it inherited and to confront the challenges of Australia in the 1980s and beyond.

Return to Lecture List