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Punitive measures are costly and don’t work: ACOSS

31 March 2011

The Australian Council of Social Service is disappointed that Federal Opposition leader Tony Abbott has decided to pursue failed punitive policies of the past that are contrary to what is needed to help long-term unemployed people and those with disabilities into paid work.

"This is not tough love, it's harsh and unnecessary, but also very costly, and simply won't work," said ACOSS CEO Dr Cassandra Goldie.

"We know that the employment outcomes from the previous Government's work for the dole scheme were poor with only about one in three participants employed 3 months after the program. It was also expensive with the average unit cost of the scheme being around $2,000.

"Income management has been even more costly with no proven beneficial results. ACOSS calculates that it costs $4,400 to keep each person on this scheme in the Northern Territory which was meant to tackle child protection and social disorder not to reduce unemployment.

"The official evaluation of the welfare to work policy for people with disabilities introduced in 2006 found less than 20% of those people with disabilities (who were shifted to Newstart Allowance) were in employment 12 months after starting on that payment. In most cases, all that was achieved was to shift them to a lower payment, with about 100,000 people with a 'partial work capacity' now on Newstart Allowance instead of the disability pension.

"Denying young unemployed people income support on the basis of where they live is not only extremely harsh it is unrealistic. It means peoploe could no longer afford to live in the areas where jobs are available.

"ACOSS has just wrapped up its national conference where reform of the system was a big topic among hundreds of groups working in the community welfare sector. The overwhelming consensus pointed to the need to work closely with employers and provide them with the incentives to take people on.

"Despite the fact that Australia's unemployment rate is going down , the number of people out of work for a year or more continues to rise, to over 350,000.

"It's not that these people are lazy or don't want to participate in some sort of paid work. The reality is they are simply being shut out and not getting a look in.

"People who are unemployed on Newstart for example, live on just $34 a day, and already have very tough requirements - we don't need to punish them even further.

"They are already expected to look for 10 jobs a fortnight, and must accept job offers or face having an 8 week suspension of their payments. And they are required to attend regular (fortnightly) interviews with either Centrelink or a jobs provider or have their payments suspended.

"We don't need a bigger stick, and we don't need to create another benefit to add to the complexity of an already complicated and highly bureaucratic social security system.

"The experience of the groups working directly with people who have been jobless for a year or more or who have a disability and want to participate in the workforce is that new approaches are needed. One policy solution is to provide incentives to employers, such as the wage subsidies already proposed by the Opposition. Another is to offer deeply disadvantaged long term unemployed people six to 12 months' paid work experience in a regular job rather than 'work for the dole'.

"ACOSS is pleased to see that the Federal Government's Social Inclusion Board is moving towards this model, which most groups that have been grappling with these issues for many years think is the sensible way forward," Dr Goldie said.

Media contact: Fernando de Freitas - 0419 626 155