SOCIAL SECURITY LEGISLATION AMENDMENT
(WORK FOR THE DOLE) BILL 1997
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DISSENTING REPORT BY THE AUSTRALIAN DEMOCRATS
The Social Security Legislation Amendment (Work for the Dole) Bill
1997 amends the Social Security Act 1991 and the Data-matching
Program (Assistance and Tax) Act 1990 to facilitate the Work for the
Dole scheme which was announced by the Government in February.
Under the Government's proposal a series of pilot work for the dole projects
involving 10,000 unemployed young people will be established over a twelve
month period. These projects will be targeted primarily towards young
people aged 18 to 24 years who have been out of work for more than six
months. The Government has said that these work for the dole programs
will be sponsored by community organisations, local or state governments
and firms and will enable young unemployed people to work on community
assistance and development projects in order to gain general work related
skills and to establish a connection with the workforce. The Government
expects participation in these programs to be on both a voluntary and
compulsory basis.
The Australian Democrats' position
The Australian Democrats fully support voluntary work programs for the
unemployed which bring benefits to the community and to the environment.
We believe that voluntary work programs which involve at least some degree
of training and are properly planned, staffed and managed have a great
deal to offer both unemployed people and the communities in which they
live.
The Democrats accept that participation in voluntary work programs can
help to build the self-esteem and self-worth of the long-term unemployed
by providing them with a sense of purpose and a sense of achievement.
Participation in these programs can also assist unemployed people to develop
a work ethic and a connection with the workforce by providing a structure
to their day and by helping them to gain vital work related skills and
experience.
When it comes to work experience schemes, however, the Democrats favour
models such as that currently being established by Tony Blair in the UK,
which offer a range of work and training options. The Labor Party's Work
for Welfare proposal in the UK which gives unemployed young people the
choice between: a private sector job where employers are offered 60 per
week for 6 months to take on an unemployed young person or 70 if they
take on a young person who has been unemployed for more than two years;
a job in the voluntary sector; a job with an Environmental Task Force;
or full time study for young people who have no qualifications, is perhaps
one the Australian Government should take a closer look at. Although we
acknowledge that young people in the UK who refuse to take up one of these
options will be subject to a 40% reduction in their unemployment benefits,
we do believe there is lot of merit in providing young people with, at
least, some degree of choice.
We agree on the desirability of building closer links between unemployed
people and the communities in which they live. Clearly, there are many
positive things to be gained from building closer and more caring communities.
However, the Democrats are concerned about the following aspects of the
current proposal: -
Compulsory Participation in Work Programs
Representatives from a number of organisations told the committee that
they had strong objections to compelling unemployed people to work for
the dole.
Representatives from organisations such as ACOSS, Welfare Rights, AYPAC,
the Australian Catholic Social Welfare Commission and the Australian Council
of Volunteering all voiced very strong opposition to programs which involve
compulsion. Representatives from Anglicare Australia, the Brotherhood
of St Laurence, The Salvation Army, the Victoria Social Justice Council,
and the Moreland City Council told the committee that their organisations
had already ruled out sponsoring any work for the dole program in which
compulsion was involved.
Many organisations asserted that compelling people to work for the dole
effectively punishes these people for the failure of the economy to create
enough jobs. It shifts the blame for unemployment away from the economy
and the Government by placing it firmly on the shoulders of those who
are in fact the victims of unemployment. As Ms Macdonald from the Brotherhood
of St Laurence explained:
The Government's programs represent and promote the belief that
unemployment is a problem because of deficiencies in individuals, like
being unmotivated or lacking a work ethic, rather than recognising that
there is insufficient demand or growth in the economy to employ those
who want to work [148].
Moreover, compelling young people to work for the dole sends out the
wrong message to young people and to the community at large. The Government's
proposal to compel young people to work for the dole, and a great deal
of the rhetoric which has accompanied it, has effectively manipulated
many Australians into believing that young people simply don't want to
work. Mr Gager from the Victorian Social Justice Council, put this point
very strongly to the committee when he stated that:
What we most strongly object to is the way this bill has been
promoted. What we have got from the Prime Minister and also from the
employment spokesperson for the Labour opposition is a set of statements
saying that unemployed people sit back like couch potatoes in front
of the television and waste their time [149].
The assumption that `young people simply do not want to work' is not
something which has been borne out in the Democrats' experiences or in
the experiences of organisations which work directly with young unemployed
people. In fact, according to Mr McAuliffe from the Brotherhood of St
Laurence, most young people are very keen to work:
Our experience shows high rates of self-referral by job-seekers
to our programs. In the case of young job-seekers, self-referral to
programs can be as high as 80 per cent...This hardly constitutes bludging
laziness or unwillingness to participate [150].
A number of witnesses went on to explain that making unemployed people
feel that they are to blame for their unemployment will significantly
undermine any positive effect participating in the Government's proposed
work for the dole programs may have. Blaming the victims of unemployment
for their plight may have a negative effect on them by lowering their
self-esteem and feelings of self-worth. As one witness told the committee
shifting the blame onto the young victims of unemployment may in fact
be the thing that actually “pushes these young people over the edge”.
Representatives from some of the organisations which appeared before
the committee stated that it would be a great deal more expensive to run
programs which involved compulsion because people who are compelled to
participate in work schemes require a great deal more support and supervision
than people who chose to participate in such programs. Few organisations
felt they would have an adequate level of resources to meet these additional
expenses.
Some organisations were also worried that they would not have the resources
to give long-term unemployed people the counselling and support they would
need to successfully participate in a work for the dole program. Mrs Gallet
from the Salvation Army told the committee that:
It is absolutely critical that organisations who choose to run
these sorts of programs have adequate funding to provide quality supervision,
that is, people not only with technical knowledge and skills but who
have a knowledge and an understanding of working with long-term unemployed
people [151].
Further concerns with funding were raised by Mr Thompson, the Chief Executive
Officer of Skillshare, who said that in the past significant numbers of
people compelled to participate in work programs have:
proved very difficult to deal with because they did not want
to be there...That manifested itself in numerous incidents of violence
against staff, damage to property, physical injury to themselves and
other participants because they skylarked or other sorts of things...The
experience - as is well documented - is that participants in these kind
of programs are more prone to injury and to do damage to property, and
a whole variety of other things, than others. It just reinforces the
need for their own protection and health and safety and for that of
others as well as for there to be adequate supervision [152].
Some organisations which currently use a lot of volunteers said they
would not want their volunteers to work with people who had been compelled
to participate because they felt it may turn volunteering into a negative
experience. Ms Cordingley from the Australian Council of Volunteering
stated that:
Of greatest concern to us is that the opportunity to volunteer
is voluntary and seen to be voluntary...there is a negative perception
of unemployed people within the volunteer sector, and we feel that compulsion
will only reinforce the negativity [153].
Ms Cordingley also stated that she was concerned that any move to compel
people to undertake voluntary work would result in lower work standards
for `real' volunteers. As she explained:
I can see the scenario where numbers of people are compelled
to work in an organisation and they cannot leave, otherwise they are
removed from their unemployment benefits. I think that would lower the
standards for volunteer involvement... so it would lower the standard
for people being involved in those organisations...One of our greatest
tools is the ability for the volunteer to say `If you don't treat me
properly, I'm leaving [154].
During the course of these hearings a number of comparisons were drawn
between this proposal and the `Workfare' program for welfare recipients
in the United States. Under Workfare many welfare recipients are forced
to work for welfare benefits (including single mothers who are compelled
to put their children into child care). A number of witnesses told the
committee that empirical evidence suggested that some of the effects of
Workfare included: the loss of paid low skill jobs and the reduction in
the wages of low skilled workers. Mr Hogg from the Victoria Social Justice
Council told the committee that:
The paid workers...in America are becoming quite active and opposed
to the Workfare people coming in...An analogy is given of where it is
like a game of musical chairs: there are only so many jobs, and there
are more and more workers and Workfare people circling those chairs
waiting for somebody to get up so they can sit down [155].
Sponsorship of Programs which involve compulsion
As this dissenting report has already pointed out, the majority of community
groups which appeared at these hearings have completely ruled out the
possibility of sponsoring any work for the dole program in which unemployed
people are compelled to participate.
While the Democrats note that Dr David Kemp was quoted in the Adelaide
Advertiser on 21 April as saying that “those (community
groups) who have some reservation about compulsion will be able to put
forward proposals which are for 100 per cent voluntary (programs)”
we have grave concerns about the implications of a contradictory statement
made by representatives from the Department of Employment, Education,
Training and Youth Affairs to this committee.
DEETYA's assertion to this committee that all potential work for the
dole sponsors would have to sign a “standard form of contract that
will make provision for the referral of compulsorily referred, potential
participants where there are insufficient volunteers [156]”
seems to effectively rule out the possibility of any organisation applying
to sponsor a work for the dole program in which participation is purely
voluntary.
By ruling out all potential work for the dole sponsors who are unwilling
to accept compulsory participants, the Government is effectively making
its proposal unworkable.
It is the Democrats' view that the Government may find it very hard to
place the 10,000 people it has said will be involved in the pilot program
for this scheme if the majority of community groups refuse to sponsor
any work for the dole programs.
Link to Training and Real Job Opportunities
The Democrats share the concerns of many of the witnesses to this committee
regarding the absence of any formal link between work for the dole programs,
training and real employment outcomes. We agree with those who pointed
out that there is an important connection between appropriate and relevant
training and getting people back into real jobs.
Mr Dodds from ACOSS pointed out that:
It appears to us that, when you examine labour market programs
in general and all sorts of assistance for unemployed people, the core
of successful programs and indeed even volunteer programs...is training.
This has been recognised by many employer groups in their submissions...The
Government itself has recognised the importance of training through
its initiatives in the last budget on traineeships and apprenticeships
and the programs to strengthen links between school education, vocational
training and employment. People's skills and their lack of skills is
their core barrier for engaging in the labour market. The lack of training
provisions in this proposal radically redefine the concept of mutual
or reciprocal obligation [157].
While we note the Department's comments that achieving job outcomes [158]
and providing training are not among the formal objectives of this proposal
the Democrats urge the Government to give further consideration to how
they could better link work for the dole programs to real training and
real job opportunities.
Sunset Clause
The Democrats are concerned about the open nature of the current bill.
This bill contains no specifications regarding who may be compelled to
participate in a work for the dole program nor does it contain any reference
to a sunset clause. The Department has said that the need for this legislation
will be reviewed after these pilot programs have been completed but without
a sunset clause we have no guarantee that this will, in fact, be the case.
Under this current bill the Government is under no obligation to review
the work for the dole scheme and similar programs could be extended to
all recipients of unemployment benefits at the Government's whim.
The Democrats believe it is crucial that a sunset clause be inserted
into this legislation to provide important safeguards and to compel the
Government to bring any future work for the dole proposals before the
Parliament.
Workers' Compensation
There seems to be a lot of concern and confusion about whether or not
work for the dole participants will be adequately covered for workers'
compensation. There also seems to be a lot of confusion about exactly
who will be liable to pay workers' compensation if a work for the dole
participant is injured at work.
The Social Security Legislation Amendment (Work for the Dole) Bill
1997 exempts work for the dole participants from a number of Commonwealth
Acts: section 9 of the Occupational Health and Safety (Commonwealth
Employees) Act 1991; section 5 of Safety Rehabilitation and Compensation
Act 1988; Superannuation Guarantee (Administration) Act 1992 and the
Workplace Relations Act 1996.
The Department has said that exempting work for the dole participants
from the Safety Rehabilitation and Compensation Act 1988 is designed
to ensure that work for the dole participants are not deemed to be part
of an employer/employee relationship at common law.
Although the Department has told the committee that the Commonwealth
will cover work for the dole participants if they are injured at work
via a Commonwealth insurance policy there still seems to be a great deal
of concern about whether or not the sponsors of work for the dole programs
could be liable to pay workers' compensation under common law.
Several witnesses to the committee raised concerns about the way Commonwealth
laws in this area will interact with State and Territory legislation as
each State and Territory has laws which cover workers' compensation although
these differ between jurisdictions. While the Department told the committee
that the Commonwealth is going to ask the States and Territories to amend
their own laws in this area to make them compatible with Commonwealth
laws, they are yet to receive confirmation that this will occur.
The Department also informed the committee however that, if the States
and Territories do not amend their laws in this area, the only way we
will know whether or not work for the dole participants are covered by
State and Territory legislation is if it is tested in the courts.
Substitution effect with paid jobs
A number of witnesses told the committee that, based on overseas experience,
they were concerned about the possible substitution effect the work for
the dole scheme may have on paid jobs and the effect it may have on the
wages of low-skilled employees.
An article from the New York Times which was presented to the
committee as part of the submission from Anglicare Australia offers some
disturbing examples. According to this article:
Job displacement is entering the debate over welfare reform. Across the
country thousands of people on welfare are going to work, but often not
at new jobs created for them as President Clinton envisioned when he signed
the welfare-to-work legislation last fall. Frequently they do work once
done by regular employees...Regardless of who gets the jobs, wages are
held down, economists say, contributing to the income inequality that
is such a national issue today...Welfare recipients move into existing
jobs, or they hold down wages simply coming into the work force [159].
While the Department told the committee that not a lot of work has been
done on analysing the effects of work programs on paid work and wage levels
in other countries because of the difficulties associated with finding
programs which are exactly the same as that proposed by the Australian
Government, they did acknowledge that previous experience has shown that
job displacement has been known to occur in programs where the private
sector has been involved
While the Democrats acknowledge the Department's comments with regard
to the unlikelihood of paid employees being displaced by work for the
dole participants within the community sector, we strongly urge the Government
to carefully monitor the effect of work for the dole programs on paid
employment and wage levels.
Recommendations
| 1. The Government should delete all references to
compulsion from the Bill. |
| 2. If the change outlined in Recommendation 1. is
not accepted, that the name of the bill be changed to the Social
Security Legislation Amendment (Compulsory Work for Unemployment
Benefits) Bill 1997. |
| 3. The Government should investigate ways to better
link the proposed work for the dole programs to formal training
and real employment outcomes. |
| 4. A sunset clause should be inserted into this bill
to provide important safeguards and to compel the Government to
bring any future work for the dole proposals before the Parliament.
|
| 5. The Commonwealth should finalise arrangements
with the States and Territories with relation to workers' compensation
liability. |
| 6. The Government should make arrangements to closely
monitor the effects work for the dole programs have on the availability
of paid jobs and on the wage levels of low skilled workers. |
Senator Meg Lees
Deputy Chair
(AD, South Australia)
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FOOTNOTES:
[148] Transcript of evidence, 18th April 1997,
CA152
[149] Transcript of evidence, 18th April 1997,
CA127
[150] Transcript of evidence, 18th April 1997,
CA126
[151] Transcript of evidence, 18th April 1997,
CA132
[152] Transcript of evidence, 18th April 1997,
CA152
[153] Transcript of evidence, 18th April 1997,
CA194
[154] Transcript of evidence, 18th April 1997,
CA196
[155] Transcript of evidence, 18th April 1997,
CA138
[156] Transcript of evidence, 7th May 1997,
CA13
[157] Transcript of evidence, 28th April 1997,
CA184
[158] Transcript of evidence, 7th May 1997,
CA4
[159] New York Times article of 1 April
1997 submitted as part of the Anglicare Australia submission