Federal Government ‘beating poor with a stick’: St Vinnies

By Anthony Barich
THE St Vincent de Paul Society has criticised the Federal Government of “taking to people with the stick” by punishing sole parents and imposing a “harsher compliance regime” to score political points in the 10 May Federal Budget.
“A harsher welfare compliance regime and the extension of compulsory income management are measures that assume that if you are disadvantaged, your problem is idleness,” said Dr John Falzon, chief executive of the Society’s National Council of Australia.
“Idleness is not the problem. The problem is entrenched inequality.”
He said the Budget has left Newstart recipients on a benefit below the poverty line.
“In fact, unemployment benefits in Australia have had no real adjustment since 1994, so the gap between unemployment benefits and the minimum wage is growing and the gap between unemployment benefits and the pension is growing significantly,” he said.
There are a significant number of sole parents who will be $56 a week worse off due to changes in the Budget, he said, which is “quite a significant figure when you’re on a low income”.
There will also be some 21 year old benefit recipients who will be $43 a week worse off, he said.
On top of these financial disadvantages, there will be a more demanding compliance regime, with a greater likelihood that people will be penalised.
He said subjecting people to compulsory income management simply because they are on a certain benefit, or live in certain postcodes that are lower socio-economic areas, is “demeaning”.
While the Society has always supported voluntary income management, compulsory income management “like what we’ve seen in the Northern Territory so far” is unacceptable, he said.
The media’s obsession over the number of teenage mothers has been overblown, and the Government is now targeting them, he said.
“This has been touted as a major problem in Australia, but it’s a huge beat-up by the media,” he said.
“Of the people who receive parenting payments in Australia, only two and a half percent are aged 19 or under, so this idea that there is a huge number of teen mothers out there is a complete misconception.”
While he conceded that encouraging teen mothers back into education is “an excellent idea, the method by which it’s going to be applied is terrible – to threaten them with the complete loss of their income, which could have dire consequences for both these mothers and their children”.
He applauded the Budget’s investment in training and massive investment in mental health, “but it is very sad and quite offensive to see the Government persisting with an attitude that because you are poor you basically have yourself to blame and must change your behaviour and will be punished if you don’t”.
“We encourage the Government to seriously analyse the actual causes of unemployment, especially in areas of concentrated disadvantage,” he said.
While the Society applauds place-based initiatives that support people who have been left out or pushed out, “we cannot condone the Dickensian rhetoric of needing to take a stick to the backs of the poor.”
The Budget included several proposed changes to the not-for-profit sector, providing $53.6 million for a new independent Commonwealth regulator and $2.9 million to develop a codified definition of charity for use in Commonwealth law.
In announcing the 2011 Federal Budget, Treasurer Wayne Swan flagged the establishment of an Australian Charities and Not-for-Profit Commission by July 2012 to introduce national regulation in the sector and to increase compliance activity.
The Gillard Government expects to raise $41 million from this measure after the Commission determines the legal status of the Not-for-Profit (NFP) sector with the Assistant Treasurer Bill Shorten insisting changes are needed to address the “overly complex and duplication of regulatory requirements.” The establishment of the Commission announced in the 2011 Federal Budget is also expected to advise on ways to tighten tax loopholes for charities and NFPs which run businesses unrelated to their charitable works, and in the process raise additional revenue for the Government.
While the Budget revealed NFPs would be asked to pay income tax on profits from unrelated commercial activities that were not directed back to their altruistic purpose, Catholic Health Australia chief executive Martin Laverty warned that it is essential that lengthy and indepth consultation be carried out before any changes are made to current tax laws.
CHA is the nation’s largest grouping of not-for-profit hospitals and aged care services that employ 40,000 Australians.