Features Australia

Weaning a nation off welfare

Has the government condemned another generation to long-term unemployment?

15 August 2020

9:00 AM

15 August 2020

9:00 AM

About fifty years ago there was a mass transition of Indigenous Australians from work to welfare. Before then, most Indigenous people worked, many on cattle stations or as domestics. Often for a pittance or in return for food, supplies and being able to live on their own land. Others were paid less than white people or had wages taken by government protectors.

From the late 1960s, Indigenous Australians gained rights to equal pay and the protectorates ended. But instead of getting equal pay, many lost their jobs and were kicked off their lands. Pastoralists lost a cheap source of labour and weren’t willing or able to pay full wages.

At the same time, Indigenous people gained rights to welfare. So those who lost their jobs became full-time welfare recipients. Aboriginal elders coined the term ‘sit-down money’ to describe it.

Of course Indigenous people should have equal pay. But there was no attempt to manage the transition or keep people in jobs. Governments counted on the welfare system to cushion the blow. It actually swallowed them up.

Most never returned to work, nor were ever expected to. A cycle of intergenerational welfare dependency began; people lost all sense of self-sufficiency and personal responsibility, leading to the widespread family breakdown and community dysfunction we still see today.

It was a perfect storm: jobs disappeared en masse and government stepped into the breach with support.


History may be about to repeat itself for many more Australians

Government measures to address Covid-19 have seen businesses shut and jobs lost. Between March and April, the number of employed Australians dropped from 13 million to 12.4 million with over 1.3 million Australians on JobSeeker; a further 3.5 million on the JobKeeper wage subsidy. These numbers have not recovered. As at June the number of people in jobs was 12.3 million. With Victoria, Australia’s second-largest state, back in Stage 4 lockdown restrictions the figures will likely get worse.

At the same time governments have increased welfare payments. A temporary Coronavirus Supplement of $550 per fortnight was introduced on top of existing welfare benefits, roughly doubling them; not just for those out of work because of shutdowns but also for long- term welfare recipients whose situation was unchanged. JobKeeper was $1,500 per fortnight, including for those previously on lower wages. So some people ended up on more during lockdown even if not actually working.

Effectively, there’re been a mass transition of millions of Australians from work to welfare. It’s the same perfect storm: jobs have disappeared or are on life support en masse and government has stepped into the breach with support. The government wants the welfare system to cushion the blow. It’s vital it doesn’t swallow people up.

These measures are temporary. But once government gives it’s very hard to take away. Barely a few months in, people called for the Coronavirus Supplement to continue until 2021 and the welfare sector began leveraging it in demands for permanent increases. Labor and the Greens called for JobKeeper to be expanded and extended. In July, not helped by the debacle in Victoria, the government announced the extension of JobKeeper for another six months, although with a tapering of the payment to $1,000 by January 2021 and a reduced amount again for those working less than 20 hours a week. A reduced Coronavirus Supplement of $250 will extend to 31 December, 2020.

Obviously the government can’t afford to pay even these lower amounts to 5 million or more people indefinitely. These payments must end. But when they do there’ll be a shock. People who’ve become used to more will have to revert to less. Those who lost jobs because of mandatory shutdowns, already living on less, will move to even lower payments. Some on JobKeeper will lose their job when employers have to pay them again. Many Victorians already have.

The longer government payments continue, the greater the shock will be and the harder, politically, it will be to remove them. But the longer someone remains out of the workforce, the harder it is to get back and the greater likelihood of long term welfare dependency affecting generations.

Over coming months you’ll hear the refrain ‘But there are no jobs’. Indigenous people in remote Australia have been told this for decades. It’s a lie. There are jobs and the biggest priority is to enable the environment for the creation of more. This means ensuring the conditions are right for people to start businesses and employ people to meet demand for goods and services. And training people to do jobs that are there.

Australia has had sustained skills shortages in trades and labour shortages in agriculture, for example, relying on thousands of overseas workers every year to fill basic jobs. We need to be directing and training displaced Australian workers to fill these jobs. With borders closed Australian farmers are complaining they can’t find workers to pick fruit. Recent media reports claimed the Australian government will allow in hundreds of people from Vanuatu to pick mangoes as an exemption to border closures. This is unfathomable with over a million Australians unemployed. Governments pat themselves on the back for making tough decisions on Covid-19. A really tough decision would be to require JobSeeker recipients in regions crying out for fruit pickers to do those jobs or lose their benefits.

The coming months will test the Australian government’s mettle. I’ve endured howls from the welfare sector saying these things about Indigenous unemployment. I’ve seen many politicians and governments fail to take tough decisions. It is going to be much harder when millions of people are affected.

Australia’s economic recovery may be slow and painful. But one thing I do know: long-term welfare dependency and buying into the ‘there are no jobs’ mantra will only lead to greater despair.

Got something to add? Join the discussion and comment below.

Nyunggai Warren Mundine AO is managing director of Nyungga Black Group and author of Speaking My Mind – Common Sense Answers for Australia. @nyunggai

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