Dear mr Alan Tudge

I went through your speech from the other night on welfare reform
and I believe a few changes were nessicary if you really want to
tackle the source of the problem.

Speech - Welfare Reform - Reducing dependency and setting higher

expectations

24-October-2016

Check against delivery

One of the defining characteristics of a modern prosperous country is a

strong social security safety net so that when people are down on their luck,
we look after them.
This has been a feature of Australian society for many decades and we should
be collectively proud that our system saves thousands of people from being
hungry or without clothes or shelter.
Today, however, the welfare system is creating problems that we never
intended. The design and structure of it has meant that for many capable
working age people, welfare is no longer a safety net, but a destination.

One in eight children is now growing up in a jobless household. Nearly forty

percent of those children will themselves be on welfare by the age of 20. We
have regions where business owners cant get workers to do entry
level jobs such as fruit picking or working in abattoirs, but where
youth unemployment is high.
100% prime grade bullshit, wherever this is it is not due to "lack of suitable
workers", In Tasmania (a prime example) there is seasonal work every year
and the amount of people searching for these jobs has never been higher (a
quick search of facebook groups will prove this). THE ONLY owners that cant
get workers are the ones that don't advertise these positions properly, or
have a bad temper and subject staff to bullying and/or poor working
conditions or piece rates (that are far below the minimum wage).

There are whole regions where as many people receive their income from
welfare as from a job.
This of course has financial implications for the nation. The welfare system
is now the largest part of the budget ($160 billion, a third of all
expenditure) and growing the fastest about 6 percent per annum.
This is clearly not financially sustainable.
Is this including the $30 billion spent on retired polititians that have the
option to retire on full salary as if they were still working after only working
for 2 years?

But the foundational problem is the dependency it creates in capable people.

Each of us would probably know of individuals or families who are stuck in the
welfare cycle. Over time their motivation collapses and their capabilities
diminish. The purpose, the structure and the dignity which comes from work
is lost to them and sometimes the despondency crosses over to the next
generation.
Indigenous leaders have been the most articulate and persistent advocates of
the need to address this problem, perhaps because they see it most acutely
in the remote locations. And my work in indigenous communities over the
last 15 years has most clearly informed my views on this topic.

Noel Pearson has been writing about the poison of passive welfare since his
seminal essay Our right to take responsibility which he published back in
2000. He says that welfare dependency explains the social crisis in his
communities:
It explains the phenomenon that even as our material condition
improved over recent decades,
No it doesn't, our material condition improving has all to do with vast
amounts of wealth being accumulated in western countrys because of high
wages. Then the production lines that used to feed, clothe and employ a
nation were stopped and sent overseas due to cheaper labor cost. This didn't
affect most in the begining and often people were overjoyed with cheaper
products. However this was at the cost of the local economy and the job
prospects of their children. And now the cycle is reversed, as the debt of the
US and Australia spiral out of control while both countrys import more and

manufacture/produce less it is clear that Australia as a nation is on an

express ride to becoming a 3rd world country.
our social conditions deteriorated.Passive welfare kills initiative
and pacifies recipients rather than invigorating them into social,
political and economic action to secure a better deal for themselves
and their children.
Due almost entirely due to a schooling system that focuses more on checking
the right boxes, dotting your I's and crossing your T's instead of critical
thinking and in a toxic environment that discourages learning because of the
"shut up! and do as you're told" attitude most teachers have when it comes
to students becoming disengaged due to the fact that most things currently
taught in the modern curriculum have next to no real world purpose.
This leaves most kids coming out of school at 1 of 2 extremes, the first are
passive to what goes on around them and believe that provided they always
do what they are told they will have good future job prospects... and a very
rude shock awaits these people as after they come out of higher
education(employable as can be) that have to compete with (usually) more
than 100 other people to get an entry level position in an industry with no
relation to thier qualifications ie a newsagency due to there being no other
jobs. And when the other 99 people like them also don't get a job or any
other way of sourcing an income, they end up on centrelink.
The second extreme can often be very rebelious (and sometimes violent)
usually they saw the problems of the system they are growing up in while
they were still young and because all the objections of this group are ignored
they develop a mentality of "F**k school, F**k the government" and because
of this a lot of them turn to drugs (not only for recreation but also as the only
industry they ever see potential of getting a job in and earning money from).
Now at this point it is very easy to point the finger at drugs for being the
reason that these people don't have jobs and quite often have a mental
illness of some form, be it Depression, Anxiety or violent tendencys. But
pointing the finger is all we have been doing up until this point and not only
is it not achieving anything it is actually counterproductive to helping
anyone.
The simple fact that can't be ignored is humans have been using drugs for
thousands of years and are not going to stop any time soon, regardless of the
threats a government (or enforcment body) can make - see Rodrigo Duterte's
hardline campagin of executing anyone suspected of involvement in the
supply of drugs for proof. So from this point out drugs cannot play a factor in
decision making for welfare services because even if people do drugs in thier
own time, most will happily work in a job if they have the opportunity to.

You cannot fix a problem simply attacking a symptom you must look
at the source.

Veteran land rights activist and former Australian of the Year, Galarrwuy
Yunipingu, is even more blunt stating that welfare dependency ultimately kills
such is its all-pervasive power to suck the life out of individuals.
But of course the challenge is not merely one for indigenous communities.
Today we have hundreds of thousands of people right across Australia in this
situation.
No amount of extra welfare payments can change this situation. We
might look at a heavily welfare dependent community and see
impoverishment. But we could double the payments, and that
impoverishment would not diminish.
While this is true it only looks at half the problem. When you are looking at a
welfare dependent community I can GUARANTEE that the community imports
more than it produces/exports. And this is why even if you double the
payments in these communities the money from the local economy isn't
going back into the local economy it is being sent elsewhere due to these
communities inability to be self sufficient.
And this is where the problem lies, not only in these small communities but
on a national scale, if Australia cannot be self sufficient(where imports <=
exports) then we will folow the same pattern as a small/remote community.
When we can no longer keep loaning money into existance and have
an economy that relys almost entirely on imports we will wither and
die.
The way a person obtains income is as important as the amount of that
income.
For able individuals, self-respect, dignity and economic empowerment
ultimately increases when income is earned. Arthur Brookes, the head of the
American Enterprise Institute, states this plainly:
The deep truth [is] that work, not money, is the fundamental source of
dignity. Work is where we build character. Properly understood, [it] is the
sacred practice of offering up our talents for the service of others.
Policies which trap or encourage people to be welfare dependent when they
could be working are not moral policies. To the contrary, they remove dignity
and disempower.

From welfare to work: four elements to reduce dependency

The Turnbull Government wants to change this equation to create

better incentives, better supports, and ultimately improved and
more fulfilling lives. Our nation is greatest when we have all the
human talent contributing to the greatest ability.
I don't believe a word of this but for arguments sake let's say that the
government (labor or liberal or w/e) truly cares about improving peoples lives
and not just that when the quality of life improves, the government is able to
extract more taxes overall than from a colony of pesants.
We are undertaking a program of reform based on boosting
opportunities, creating more incentives for working, and more
support for those who need it. This is challenging work, not least of
which because it cuts across three portfolios: employment, social
services, and human services. However, we have three ministers in
Michaelia Cash, Christian Porter and myself who are all aligned in
our intent to increase opportunity, and reduce dependency.
I really hope you are prepaired for the mammoth task you three face because
if you fail..
AUSTRALIA WILL DIE.
Our program starts on the opportunity side.
Every lever of government is geared towards growing the economy and
creating more jobs: company tax cuts; our innovation agenda; more
infrastructure and free trade deals. There are 474,000 more jobs today
than three years ago.
Really? So of those supposed "474,000" jobs how many of them are full time,
stable and can provide long term careers in an industry that isn't just sending
our accumulated wealth elsewhere in the world?
We are also creating specific opportunities for young people through
the Youth Jobs PaTH Programme announced in the last budget, and
is being led by Minister Cash. PaTH is a three staged pathway
(Prepare Trial Hire) where we are getting people ready by
providing preemployment skills training; giving them a go, by
getting them into an internship; and then getting them into a job,
including with a wage subsidy of up to $10,000 to the employer. One
hundred and twenty thousand opportunities will be provided.
I hope you can already see the problem at this point where you are relying on

private companys having work for these people to do, this is the biggest
problem all job seekers face is lack of work available, nobody wants to invest
money in manufacturing here and because manufacturing of goods is THE
BIGGEST REQUIREMENT for creating the technology we rely on every day,
and if we aren't producing what we need WHERE we need it we have
hundreds of thousands of people out of work because we are not doing the
work here.
ps an internship is not a job and does not guarantee a job and because of this
it should never be considered as part of a government program as it
encourages companys to use and abuse interns due to the massive influx of
people who are required to participate in the program. And therefore pushing
the blame onto the jobseeker themself.
This Programme will bring together young people that want work
experience but who need some extra help with employers. We have
listened to employers and are delivering.
Clearly, by offering them easy access to free slave(intern) labor. Maybe try
talking to the job seekers to establish the real problem and solutions that will
actually work.
However, while creating opportunities is necessary, it is not sufficient. We
know there are jobs available today in many locations which employers
struggle to fill. Over the next few years, there will be 100,000 more jobs in
aged, disability and child care, but if nothing changes, it will be difficult to
transition people presently on welfare payments (including on a carers
payment) into these roles.
We must therefore also reform the welfare system of payments and supports
to ensure that welfare is a safety net, not destination.
Learning from the experiences of the United Kingdom and New Zealand, we
are doing the policy work to bring about some incremental changes. There
are four elements to a better system.

First, we need to simplify our intensely complicated payment system for work
capable Australians under the age of 65, as recommended by the McClure
Review. We presently have around 20 payment types and 49 supplements.
The objective will be to not only create a more simple and manageable
structure, but to do so in a way that minimises situations where there are
weak or no financial incentives to work due to the interaction of welfare and
income tax thresholds. Too many instances arise at present where the
amount of total welfare allocated is comparable to what could be earned

through work.

Noel Pearson called this problem the welfare pedestal. The idea that
someone sits up on a welfare pedestal and sees little financial incentive to
embarking upon the employment staircase.

The complexity of the system also creates perceived disincentives: people

often mistakenly believe that they will lose payments by taking more work
even if they will not. Minister Porter and I acknowledge that structural reform
in this area will require a considered, consultative process as we undertake
this reform.

Second, is to invest additional resources and support for those groups in the
community that we now know are highly likely to have a life of dependency
without intervention. This is the Priority Investment Approach outlined by
Minister Porter last month and involves a $96 million fund to support
innovative approaches to change trajectories. In New Zealand, thousands of
people in target groups such as young mothers have been moved from
dependency to self-reliance with the welcome secondary effect of reducing
the long term welfare costs by an estimated $12 billion. We are calling on
innovative organisations to help craft solutions.

Third, is setting higher expectations in our compliance system to ensure that

those who are capable of work undertake job search activities and take a job
one when one presents itself. I will expand upon this in a moment.

Fourth, in some troubled communities, we are trialling a new way of

delivering welfare via a cashless debit card that cannot be used for
gambling, or the purchase of alcohol or illicit substances. The
express purpose of these trials is to reduce the social harm caused
when the welfare dollar is massively abused, particularly on huge
volumes of alcohol. It is early days in these trials, but impressive
results are coming through including reductions in hospital
presentations.
In "troubled communities" forcing people to only pay with eftpos does
nothing but further complicate the already insanly complicated welfare

system. If people want to buy drugs with the money they recieve from
welfare they will and you cannot stop them because even if it isnt drugs they
are purchasing directly they still are able to purchase goods&services with
that money and exchange that for drugs, and contrary to popular belief drug
dealers are people too who require goods&services so in "troubles
communities" such as these changing the currency of a drug dealers
customers is only going to change the currency drugs are purchased with. It
will not stop people from buying them.

Exhibit 1: The four elements of the governments welfare reform agenda

Setting higher expectations in welfare obligations

There has already been much discussion about three of the four elements
outlined above, but less on welfare obligations. Let me expand on why
compliance with obligations is critical.
A responsible government that seeks to improve lives should aim to design
the payment system so that there are strong positive incentives to search for
work and take a job when available.

For most unemployed Australians, the concept of a job and the ability to
provide for themselves and their families is enough incentive. However,
there will always be a few who try and avoid work or game the
system. There are others who have not had role models in their lives
who have experienced working. For them, working is not a social
norm.
I think the key word to note here is "few" as this is NOT the majority of
unemployed people and trying to punish this minority of people just ends up
being detrimental to those activly looking for work because of the way it
blanket affects everyone recieving some form of welfare.
To prevent such people falling into long-term dependency, they need
encouragement to look for work, to take a job, and hold it down.
At the moment, our expectations upon capable job seekers as reflected in the
practical application of the welfare obligations are too low to the detriment
of the individual and the community. I will provide evidence of this in a
moment.
Why are expectations important? Because we know from other policy

areas that expectations are likely to be met, whether those

expectations are good, bad, correct or misguided.
But what happens when the expectations are impossible? ie your current
system requires all job seekers to apply for at least 20 jobs a month, what
happens to the job seeker if they cannot fulfil this not due to lack of trying?
They starve&become homeless, not because they were lazy or didn't try but
because there were not that many jobs or even employers where they live.
And as a note, if someone cannot fulfil this obligation due to this reason and
asks for help from their assigned jobsearch agency the most common
response is either "well you'll just have to get a bit creative then" which is
code for "well you'll just have to apply for jobs in other areas that you aren't
qualified for or capable of doing.

Professor John Hattie, Australias foremost educational academic, makes this

exact point in relation to the expectations that teachers place upon students.
High performing schools are characterised by high expectations, irrespective
of the demographic composition of the students.
We recently introduced a campaign setting the expectation that people get
their children immunised and we backed it up with a no jab, no pay policy.
What happened? A record number of families receiving government support
for childcare took action to have their kids immunised.
Our road authorities, particularly in Victoria, now expect us to stay within the
speed limit at all times. There are no excuses countenanced and considerable
non-negotiable penalties apply if we dont abide. Now, it is rare to see people
deliberately speeding, and the road toll consequently is far lower than in
previous decades.
So what are our expectations upon job seekers? On the surface, there
appears to be stringent requirements. But it is more illusionary than real. In
the practical application, they are not consistently present.

To start, there are more than 400,000 capable people who are not subject to
any work-related mutual obligations in exchange for their payments.

Those who are subject to obligations have what appears to be a robust set of
conditions attached to their welfare payments. They are told that they must
look for work and abide by a job plan that will be developed with them by

their Job Service Provider. This will typically mean attending interviews that
become available, and taking jobs which are offered. It will require people to
do work for the dole after 12 months. If an individual does not meet those
requirements, the concept is that a penalty is imposed. For example, a
reduction or suspension of payments.

However, in practice this rarely happens.

Lets take an example of a person on Newstart who has a job interview, but
they dont turn up and consequently miss the opportunity for that job.
Remember that to get to this point, they have already been assessed as
having capacity to work.
Step one is that the jobactive provider will check why the person didnt turn
up and whether they had a reasonable excuse. A Reasonable Excuse is
outlined in legislation and there is a debate about whether those deemed
reasonable excuses are aligned with community standards. We have a
concern, particularly, that having drug or alcohol issues can be considered a
reasonable excuse under current definitions.
Further still, a jobactive provider, who considered that there are no
reasonable excuses, can then exercise discretion as to whether to
recommend a participation failure to Centrelink.
If such a recommendation does get submitted to Centrelink, the officials will
then call the job seeker to discuss the incident. They will check again against
the reasonable excuse list, but are empowered under the Social Security
Guidelines to take into account any factor that they consider may have
affected the job seekers ability to comply. Under the Guidelines, they are
allowed to interpret broadly if the circumstances warrant it.
There will also be a certain proportion of submissions from the jobactive
provider that are not valid because of procedural error.
In the final result, according to a recent estimate, only about four percent of
those who fail to undertake a required activity without reasonable excuse
receive a financial penalty.
Lets get to the financial penalties themselves. At a foundational level, the
two issues with the financial penalty regime are complexity, and immediacy.
In the case of our person who missed a job interview, if after all of the steps I
just described, Centrelink does decide that a penalty should be applied, then

they would likely be docked one day worth of their welfare payment.
However, that penalty is only applied in a few weeks time, removing the
immediacy of action, and consequence.
Secondly, like the welfare payments themselves, the penalty system is overly
complex. Different penalties apply for missing different types of activities,
and there are multiple discretion points, waivers, triggers for comprehensive
compliance assessments, and varying types of financial and non-financial
sanctions. In addition, its arguable that the 8 week penalties that can be
applied for serious failures are too onerous and act to dissuade decision
makers from swift and clear decision making. If a Job Seeker cant
understand what the consequences will be for not complying with their
mutual obligations, how can we expect that the compliance framework will be
effective?

Exhibit 2: Possible responses to non-compliance (having gone through the

process outlined above)

Secondly, sanctions are often imposed far too late to be effective at shaping
behaviour, and even when penalties are imposed, they can be waived. Take
for instance failure to job search. A job seeker has to fail in their job search
efforts for 12 weeks before a financial sanction can be imposed.
When the person finally reaches that 12 week threshold, the penalty is
typically an 8 week payment suspension, which is arguably too onerous.
However, all it takes to have the suspension waived and to receive full backpayment, is for the job seeker to call and agree to undertake some activity
such as further training in the future. The cycle then starts again.
In the last financial year, not a single person suffered a financial penalty (i.e.
actually lost any welfare payments) for failure to job search. Many had
suspensions, but all were fully backdated.
If the same individuals overstayed a parking bay by even a few minutes, they
would get a ticket. Regardless of the persons background, we insist through
our parking laws that individuals take responsibility.
But when it comes to critical activity to place people onto a better life path,
we too often make excuses for them.
These illustrations that I have given are not examples of high expectations
being set. On the contrary, they embody expectations that are miserably
low.

Why cant a person attend a job interview, when they have been assessed as
being capable of working, and dont have a reasonable excuse? We should
be insisting upon a higher standard. Because if we do so, we would be telling
people: yes you are capable of doing this and, yes, you can do it!
If they miss that interview, then they miss the opportunity to get onto a life
path with the benefit of the dignity and wellbeing that comes with work and
participating in society.
We dont help anyone by excusing poor behaviour. It simply entrenches
disadvantage and robs them of opportunity. This is sometimes referred to as
the soft bigotry of low expectations.
Setting low expectations is a sign of disrespect. Low expectations are often
masked in the language of compassion. In fact, it is the very opposite. We
make people more reliant by eroding their capacity to help themselves. We
are telling them that they lack the capacity to change their lives.
We should be raising our expectations.
Over the next few months, Michaelia Cash, Christian Porter and I want to
delve further into this and start the process of designing a new system built
on higher expectations; where the standards are clear, fair and high, while
still accommodating the fact that life throws up unexpected events.
This will be a core part of the governments broader welfare reform agenda,
as I have outlined above.

Conclusion

We must face the reality that in our desire to be a generous and

caring society we may have reached a point where we have taken
our good intentions too far, and are now causing harm.
True, however this is more to do with a shifting economic climate than
individual job seekers.
You cannot make someone do a job that does not exist.
Many unemployed people simply need a system that encourages
them to have a go, supports them while they do it, and lets them
know that we believe in their capability.
Yes but my outsourcing the responsibility of this "support" to for-profit

organisations driven by "results" and financial incentives is throwing money

away that could be far better spent.
We need a version of Obamas creed Yes you can! to express our belief in
what people can do, not what they cannot.
Every person assessed as having capacity to work can job search,
can interview and can do a job.
But only if that job exists... and that is the problem, not "lazy job seekers"
Our welfare system shouldnt become a trap. It should be a safety
net, an enabler. It should be backing people all the way to take a
step up when an opportunity is available and expect that they will.
How about rather than just praying that an opportunity becomes available
how about looking to ways that an individual can create opportunities not
only for themselves but also others if they are given a framework and some
financial assistance to start their own business.
We will always proudly have a generous social security net. But in providing a
fair hand out in times of need, we must never lose sight of the fact that the
most important assistance is the helping hand out of the system itself.

Conclusion
Australia's local economys are going down the shitter and is being reflected
by a soaring unemployment rate.
Punishing job seekers attacks a symptom of the problem and thus will not
help in the long term.
Until we are able to balance the value of imports&exports this problem will
not go away.

Yours sincerely
An unemployed jobseeker.