Friday, November 21, 2003

Curious Non-Event of the Week

When a Government holds back an independent report which more or less damns one of its major policies as a failure, you'd expect a bit of a ruckus, wouldn't you? Especially if were in the politically sensitive area of unemployment policy. So I'm at a bit of a loss to understand why the Melbourne Institute's report on Work for the Dole hasn't created more of a stir than it has.

Although it's usually described as a Liberal Party initiative, my admittedly unreliable memory insists that Work for the Dole was actually spawned by Channel Nine's Sixty Minutes. Sometime in the early 1990s (when the then ALP Government was once again in electoral shtook over unemployment) Sixty Minutes, in keeping with the fine Australian tradition of dole-bludger bashing, aired an item on the welfare system in the US, highlighting such desirable features of the US welfare system as fixed time limits on unemployment benefits and various "workfare" schemes introduced by forward thinking state governments. They may have done one of those studio debates on it too, a week or so later (but that may just be a confabulation).

Whether or not Work for the Dole was Coalition policy before Sixty Minutes ran this item, it was definitely a goer afterwards. At the time I was working as a contract programmer with one of those multi-national companies, on a project which involved a lot of contact with middle-managers. I remember being stunned by the spluttering indignation with which people on $50,000 a year plus fringe benefits and incentives would declare that of course people should work for the dole; they should have to earn their keep like the rest of us who have to pay taxes so that they can sun themselves on the Gold Coast. The only way to calm them down was to ask if you should pick Carlton or Collingwood in the footy-tipping this week.

How has Work for the Dole failed? Jeff Borland of the Melbourne Institute explained it on ABC's AM this way:

Probably we think the most likely explanation is that these type of programs have what are called lock-in effects. That is, while people are participating in these type of schemes they actually reduce the extent of their job search activity, put together with the fact that these type of programs tend to be fairly sort of minimal interventions in the sense of providing extra skills to enhance job finding prospects.

This is an interesting finding if you take the life-cycle view of poverty; i.e. that at some times in our lives we are all going to be relatively poor, but this usually ony a temporary setback between periods of relative affluence. If the Melbourne Institute report is correct, the effect of the Work for the Dole scheme is to interrupt the normal cycle from affluence to poverty and back again in the worst way possible; by trapping Work for the Dole participants in extended periods of welfare dependency.

The problem for the Government is that Work for the Dole has proven electoral appeal; Australians love to grumble about how the taxes they go out of their way to avoid paying are (or would be) wasted by the Government, particularly on welfare. Whether Work for the Dole scheme does anything for the unemployed, is beside the point; the point is to let the tax-paying voter in John Howard's rapidly shrinking Mainstream Australia know that their taxes, if not exactly at work, are at least being worked for. So it's no surprise that the Government is downplaying the report as outdated and prefers to play up another report by John and Ann Neville of Sydney's Centre for Applied Economic Research, which finds that Work for the Dole compares favourably with simialr programs overseas. The Nevilles made a number of reccommendations for changes to the scheme:

The report recommends the name of the program be changed to 'Work for the Community' and participants be paid more in training credits.

The report also recommends rural and regional participants be paid more to cover transport costs.

The Minister for Employment, Kevin Andrews, says the Government will consider all of the report's recommendations.

"I'll have a look at all of the recommendations but we would have to be convinced that a change from 'Work for the Dole', which has become well known, would be warranted in the circumstances," Mr Andrews said.

That's one reccommendation that won't be taken up; I wonder how the other thirteen will go.

Postscript: while I was writing this post, Meika got in first, with a reminder of how he got signed up for Work for the Dole.

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