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Address to the People First Conference Australian Catholic University Sydney, 22 November 1996



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I LEADER OF THE OPPOSITION |

CHECK AGAINST DELIVERY EMBARGOED UNTIL

DELIVERY

ADDRESS TO THEfPEOPLE FIRST CONFERENCE AUSTRALIAN CATHOLIC UNIVERSITY! SYDNEY. 22 NOVEMBER 1996

I've been asked to speak today on the political perspective to the issue of poverty and what can be done about it. I don't want this to mean party political perspective, and I'm sure that you don't. But, if we're to consider seriously the political perspective to the question how the society can eradicate rather than alleviate

poverty, I must draw distinctions between the approach taken by my side of politics and the actions of the current Government.

Why are people poor? What are the consequences of their being poor? People are poor when they can't get work or a reasonable living wage when they have work. They're poor when they can't get a start to life through education and training, proper shelter and decent health cover. They're poor when they can't get income and other forms of support when they need it.

What are the consequences of people being poor? Some are obvious, such as the frustration and guilt - and often despair - of people who simply don't have the means to cope with the day-to-day living expenses which most of us manage without too much drama: paying the rent, getting about on public transport, putting food on the table, providing for the children.

But the effects go beyond these things. Poverty is actually a health hazard, connected with higher rates of mortality, chronic illness and use of hospitals. The Bishops' Pastoral Statement which is the keynote text for this conference mentions other broader consequences such as social division, disharmony and greater crime

levels.

From the political perspective, the central point made by every one of these examples of cause and effect is that poverty is fundamentally a structural issue. Poverty is in so many ways a political problem. It won't be solved by community leaders blaming, penalising or marginalising its victims.

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Solution starts with the recognition that the economy serves the community, not the other way round, and that economic policy can't be designed and managed independently of broad social policy. Solution means putting in place social actions which attack the causes rather than ameliorating the effects. These involve a range of issues: income distribution, education and training, infrastructure, regional development, health, housing and the social security system. Above all, it means helping and maintaining secure work for living wages.

When we were in government, we observed this basic point: the higher the level of employment, the greater the economic security for working people and the whole ' community. We recognised that jobs and the security which came from jobs were

the most powerful and enduring weapons which governments could provide against poverty and for social wellbeing and progress. Throughout most of our period in office, we achieved healthy economic growth. This growth provided the basis for the creation of jobs and higher living standards. We created more than two million new jobs, through good economic times and bad.

Our guiding principle was that, especially in times of economic activity, good government means organising and distributing work as well as creating work. So, through such measures as the Car and Steel Plans and bounties for the shipbuilding and other industries, we distributed jobs in industries and regions and communities which were heading for hard times.

When we left office we were well into the Working Nation strategy. This was the mostrcomprehensive and active set of employment and associated programs in our history, certainly since the days of Postwar Reconstruction. The fundamental point of Working Nation was that unemployment not only diminished its victims; it also

had a corrosive effect on the social fabric. We recognised that there can be no better form of security for Australians and their families than employment. We recognised the direct effect that reducing unemployment had on family income.

Some of the most interestingiresearctoarcLundiafethe time actually suggested that, for every percentage fall in unemployment, the mean income of the average family grew roughly 3.5%.

Working Nation aimed at reducing unemployment to 5% by the year 2000. It was based on the understanding that good employment policy depended on active government. It recognised that good employment policy meant not only creating the conditions for more jobs but also making sure that the new jobs were skilled jobs. It meant making sure that young Australians would get the standard of education and training that would enable them to take up the new skilled jobs. Programs of training, retraining and income support were set up for people who were out of work

or only on the fringes of work. We were confident that we could reach our 5% target. When we left office, we were well on our way to it.

At the same time that we tried to encourage economic growth, we tried to make sure that the sacrifices that went into it and the benefits that came out of it were distributed more fairly by topping up money wages foregone with increases in the social wage. We transformed the education and training systems. We reformed the

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tax system. We set up Medicare. We increased the level and scope of family payments and social security and removed the old unpredictability from the pension system. We created 200,000 child care places and made sure that average families could afford them. Superannuation was extended to wage-earners, instead of

remaining the preserve of managers and white collar workers. We increased spending per head on the social wage by 70%. By the time we left office, it has been estimated that the health, education, child care and housing factors in the social wage were worth about $200 a week.

But, if the last 10 years or so were a period of growth, they were also a period of great social and technological change. The change has had different consequences for different people. Many Australians gained greater financial reward, greater control over work practices, more flexible working lives, more say in their workplaces. But, for others, it brought about greater anxiety and insecurity, greater demand to forget their old familiar skills and to learn new ones, new industries and

new technologies taking over from the old certainties.

We understood this. We realised that we needed to provide support to help ease the wider social impacts of all this change. But we didn't hear the concern of the community about the insecurity and the apprehension and even resistance that it was feeling as the result. So we paid the price. But we did achieve this: advances

in the social wage outpaced advances in the market wage for most of our term of office.

So my greatest quarrel with what the new Government has done -- in its Budget and elsewhere - is that it seems to have gone out of its way to prevent these structural reforms from attacking the basic causes of poverty. Let me give a couple of examples.

The first concerns management of the economy and the link between this and the primary factors in the poverty problem: employment, secure jobs, a decent living wage. The strength which we'd left in the economy in March had clearly leaked out of it by August when the Budget was brought down. Yet this was a Budget which will have what Treasury delicately calls "a small net contractionary impact on activity

in 1966-67". After 4% growth for four years, the best we can expect for this year is 3.5% and less than this in 1997-98. Unemployment, in other words, won't be coming down below 8% for a few years yet, and could go well above 9%.

The impact of the new industrial relations legislation on wages and especially the complications it will create for working people is another example of the way current policies and actions will make life that much more difficult for people in poverty or on the edge of poverty.

An $8 a week pay rise in current conditions is patronising and derisory. It will be no compensation to working people whose living wages will be dented from 1 January on by the nasties in the Budget. It certainly won't be of much more than symbolic benefit to people who don't have the nous or the clout or the protection of a union to

help them find their way around the brave new world of work ahead of them.

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Many people will quickly find out that the famous pre-election promise that nobody will be worse off as the result of this legislation has been moved from the category of core (meaning that it might be kept) to non-core (meaning that it won't be kept). These are people who have part-time or casual work or who do outwork. This threat to security in working life is a threat to security in family life.

At the same time that the Government proposes to reduce security in the lives of people at work, it also proposes to cut or get rid of altogether the programs which help unemployed people to get work and keep work.

These programs were so effective that they attracted the attention of governments and labour market experts around the world. In very many cases, they make the difference for unemployed people between getting secure work and staying locked out of work for ever. Yet, so savagely have they been targeted by the Government, they provide the single greatest source of spending cuts in the Budget - nearly $2

billion over four years. The progress that was being made as the result of Working Nation - the hand up that it offered to young people getting ready for work and people on the fringe of work and those without work — has been stopped dead.

The economic strategy I've described will almost certainly lead to the creation of an underclass: a permanent minority of chronically unemployed and under-employed people, not eligible to be rescued by training and other activities but left to makeshift emergency relief. The Government has in effect conscripted people on low incomes for a deficit reduction stratagem based on questionable economic grounds for short­ term political objectives.

There are two aspects to the Government's justification of its actions. One is that the family has the primary role in social security. The other is that market forces are able to alleviate poverty, if not eradicate it.

A few days before the election, the Prime Minister said that "stable, unified, functioning families represent the most effective welfare system that any nation can ever devise". He has repeated the sentiment many times since. He mentioned the need for strong family life again a week ago in his remarks about the need for

debate to concentrate on social issues.

Mr Howard won't get a word of disagreement from me on the point. We believe very strongly that the family is the cohesive force in the society. It provides the abiding values and the rules and conventions by which the society is glued together. It determines the common good. It has the primary role in the health and wellbeing of Australians. All this we appreciate and support. It was a fundamental point in our

policies and activities as a government and it has the same primacy in our view now.

But we also understand that the family is under more pressure now than for a generation or more. Life is so much more complicated these days. So is work. The pressure on parents therefore has grown enormously. So has the pressure on young people.

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When we were in government, we tried to ease the family environment by a whole range of activities: family allowances, for example; child care; supporting young people through an expanded, more accessible education and training system; providing a better, more affordable and comprehensive health service; investing in better transport and other infrastructure; helping families living in rural, remote and otherwise disadvantaged situations.

We lost the support of very many Australians in March for various reasons. But it can't be said that we didn't understand the need of government to support family life. Our surprise and anger are all the greater therefore when we see government decisions which are against the interests of families. Look at the effect of the

Budget on the average family and its dependants.

Let me cite just a few instances which show the range of effect:

• higher chemists' fees • higher costs of child care • nursing home entry fees (which even threaten the family home)

• reduced support for AUSTUDY and the new HECS repayment system • restrictions on Youth Training Allowance • cuts to legal aid • employment and education entry payments

• new activity testing requirements for unemployment beneficiaries • cuts to mediation, counselling and other Family Court-services.

The health insurance- rebate won't cover the cost of subscriptions. The family tax initiative is welcome. But it will be more than wiped-out-by-the extra costs of schooling, health, child,care^andgenerally providing for.andslooking after the young and the old. One stepTorward-for familiesibut two steps'backt

The anxiety from alLthisimustibe intensified from the family-point of view by the Government's contradictory strategy- in which (on the one hand) it criticises what it calls the welfare dependency syndrome and (on the other) actively encourages it. Cases in point are its decision on the earnings credit scheme, attacking the CDEP scheme in which indigenous people were actually working for the dole and forcing newly-arrived immigrants to wait two years before being eligible for AU STUDY and other means of support.

Probably the most counter-productive measures in this respect concern labour market assistance programs and the abolition of the free employment service set up 50 years ago by Chifley. The Government hopes to save billions of dollars from these decisions. But every dollar saved by the Government is a dollar incurred by families - in most cases, poor families - all over Australia.

Finally on this point, we're getting the first evidence of the effect of the new world of work on families, even before the new industrial relations regime comes into effect. It shows that families are feeling more stressed because family members are

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working longer and harder and getting less satisfaction. They feel greater insecurity because they see their chances of tenure and promotion receding. They report greater strain on family life.

In addition to this, of course, is the uncertainty brought about by the present sense of economic drift, the absence of any clear strategy for employment and the reluctance of the Government to commit itself to unemployment goals.

Good government in such circumstances is to help these families, not to walk away from them. Good government is to be there for families, not force them to be an alternative social security system and then to reduce their resources to be so.

Much the same distrust must be felt about market forces as a substitute for social action. The market may be the most effective way there is to satisfy the wide range of our needs and wants. It may meet most of our needs most of the time. But some things are beyond it. As a rule, it can't distribute social good in line with social need.

It can offer growth - a larger cake. But, as support for John F. Kennedy's theorem that "the rising tide raises all boats", it hasn't worked absolutely effectively. On its own, it can't provide minimum standards-for youth employment, for example, or literacy, or rural health services^ There&areitimesiwhen it can't provide growth either.

This too has implicationsTorgovernmentf As-Cardinal Clancy says in his foreword to the Pastoral Statement^ national-leaders^'needto-reassess the heavy reliance that is being piace&on market forces to provide;ajust distribution of economic, profit^ prosperity and power-: These4orces-alone:cannotdetermine the common economic: good of nations".

Social actiomagainst-poverty has been'portrayed-by the new establishment as a’ mistake, a wasteland an aberratio.n,3 .lt:hasfcbeen;bJamed for weakening the nation's^ moral fibre, forin d uei ng^a^beg ging^owlimentality and cultivating dependency o n th e i' State as masteriandmotas-servankiThis-climateiof reaction has been described?as^ one in which "liberty-and-equa1ityshaveiusually been considered antithetic and- fraternity has;rarelybeemconsiderediaball". But.the alternatives which appear-to;be-

in the Government's mimLarerclearly not enough. Social services have been relegated to second-class provision for the stigmatised poor. Family life is being made to take the strain without the resources and support it needs. We're getting to a state of affairs in which many people are only a payday away from calamity.

It's clear from experience and it's clear from the evidence in the Pastoral Statement that social action is the only really satisfactory and effective basis for action to deal with poverty.

Let me end by saying that we in the Labor Party in this post-election phase are listening to what the community wants to tell us about how we went wrong, what we did right and how we can do better. We're using the process to find ideas from the community which we can meld with ours for better, fairer government and a better, fairer society. We're looking to see if there are more effective forms of action to

reach the goals that we're discussing at this conference.

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Some interesting issues have already come out of this which demand careful examination. We shall defend and promote social action against poverty, as we did in government. But we must also be confident enough to be able to recognise

aspects of our system which may be inefficient or patronising or bureaucratic. Gareth Evans has made the point that we need to apply our tax and welfare policies in ways that pay more attention to the needs, not only of their beneficiaries but also of those who - though they may not be the most needy - see these policies as discriminating against them. Lindsay Tanner has advocated focusing more closely on what he calls "building institutions" such as Medicare and community health and

legal services and putting less emphasis on cash transfers.

But these are still early days. We'll be raising more such issues as we draw up social policies for coming generations. We'll seek to involve the community as widely as possible in the process. We want to engage all the talents of the community. For effective and informed policy, there's no alternative.

It's for these reasons that I have great pleasure - and I attach great importance - to be asked to take part in this conference which aims to draw up a Plan of Action for policies that will provide support and justice for all Australians. It would be difficult - at this time and in such circumstances -- to imagine an activity with greater significance for us and the wider community. I look forward to seeing the result, and seeing the result translated into action. Thank you.