The Liberals and sections of the media are wailing in anguish about the tiny tax increases proposed for the 80,000 Australians with superannuation accounts worth more than $3 million. But their sympathy would be more appropriately directed at another similar-sized group: the 87,279 single mothers forced by the government to subsist on JobSeeker and try to raise their kids on $784.50 a fortnight.
These women are victims of the “policy-induced poverty” initiated by John Howard in 2006 and accelerated by Julia Gillard in 2013 that requires single mothers be dumped from the Parenting Payment ($961.30 a fortnight) and onto the dole (JobSeeker) when their youngest child turns eight. They are currently paid $176.50 a fortnight less than they would receive if still on the Parenting Payment. This policy was intended to encourage single mothers off welfare and into employment, but a decade on there is no evidence this has succeeded.
Instead, these women and their children have sunk deeper into poverty every six months because not only is the rate of payment lower, it is indexed differently. For instance, those on the Parenting Payment received an extra $33.90 from the March indexation increase while the more than 80,000 women on the dole got just $26.60.
As a result of the policy changes, these women are no longer seen as single mothers once their youngest turns eight. Despite having as many as ten years of parenthood ahead of them, they are deemed to be unemployed economic units and are punished if they can’t find employment.
There is no “policy-induced poverty” for those with large super funds. They instead benefit from billion-dollar government largesse, enabling them to grow their wealth via taxpayer subsidy.
As many as 50 per cent of Australia’s single mothers are burdened by poverty, forced to subsist on government payments even when they have employment.
In addition, as we have just learnt from newly published ABS statistics, as many as 60 per cent of Australia’s single mothers have been subjected to domestic violence and this is the reason they left their relationships and hence are single. Forget about the stereotypes of “sluts” and “welfare cheats”. Most single mothers were once in marriages or de facto relationships but chose to leave to escape violence. (A further 275,000 women remain in violent relationships because they have no money and fear ending up in poverty, according to the same report.)
It does not have to be this way. In fact, up to 2006, it wasn’t.
It’s now 50 years since Gough Whitlam created the Supporting Mother’s Benefit, the first-ever federal or state payment to single mothers other than widows. (It was later extended to single fathers as well, becoming the Supporting Parent’s Benefit, the ancestor of today’s Parenting Payment.)
Bob Hawke built on this payment, ensuring it was indexed to male weekly earnings so that its recipients would have financial security as well as the social status of being treated by their government with dignity and respect.
That all ended with John Howard’s “welfare to work” so-called reforms in 2006. Sadly, subsequent Labor governments only made things worse. Kevin Rudd changed the indexation arrangements, linking the unemployment benefit to the lower CPI (rather than male weekly earnings) and in 2013, Julia Gillard removed the grandfathering of the Howard plan (which had protected existing recipients of the Parenting Payment until their children turned 16), forcing some 80,000 women whose children were eight years old or above onto the dole. Most of them lost about $100 a week in payments.
The decision was controversial at the time, including within the expenditure review committee of cabinet where it was made. Jenny Macklin opposed it, as did Anthony Albanese who, rumour has it, threatened to resign. Jim Chalmers was also in the room when it happened, as chief of staff to treasurer Wayne Swan. But prime minister Gillard insisted the changes would benefit women by getting them off welfare. The changes were waved through.
Ten years on, it is clear that however worthy Gillard’s intentions were, the policy has failed to promote employment. Instead, it breeds ongoing and worsening poverty, with all the likely consequences for future child wellbeing.
According to modelling from the ANU Centre for Social Research and Methods conducted in February, it would cost just $1.41 billion to restore these single mothers to the Parenting Payment. But I don’t believe that is sufficient.
To enable Australia’s single mothers to have the financial security and dignity they enjoyed under the Whitlam, Hawke and Keating governments, they should be paid at the same rate as the single adult pension ($1064 per fortnight). This would cost $2.65 billion, or $10.91 billion over the forward estimates.
It sounds like a lot, but it’s a drop in the ocean compared with the $25 billion we currently spend helping already wealthy superannuation account holders create further wealth to bequeath to their kids. And is it too much for us to spend to remove these women and kids from poverty and enable them to begin to repair their lives after the damage done by domestic violence?
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