Jobs and Families a Priority For 2007 Budget

Catholic Social Services Australia has released its 2007 Federal Budget Submission, which makes over 30 recommendations focusing on a better deal for unemployed people and families.

Executive Director, Frank Quinlan, said all budget measures must be targeted to address pockets of poverty and social disadvantage identified around Australia and those measures must ensure social disadvantage is not exacerbated.

Employment, family services, tax reform, welfare changes, housing, childcare, mental health and dental health all feature in the submission.

Some of the recommendations are summarised below.

Personal Support Program

PSP fees should be set by reference to Job Network fees, plus a 20 per cent loading in recognition of the complex needs of PSP participants. PSP providers should be given access to a brokerage account, at an amount also set by reference to Job Network fees, plus a 20 per cent loading.

Very Long Term Unemployed People

In October 2006, there were around 285,000 people who had been on Newstart allowance for more than 12 months. More intensive support must be provided for people who are very long term unemployed. This should include access to better assessment services to identify barriers to employment.

Full Time Work for the Dole

Full time work for the dole should be abolished and replaced by a vocational work experience program involving both intensive personal assistance and 12 months' work experience on award wages or equivalent.

Job Network

Annual access must be guaranteed to Intensive Support Customised Assistance (ISca) for very long-term unemployed job seekers - not just the two opportunities that currently exist. The definition for ‘highly disadvantaged' job seekers must be changed to reflect more accurately the number of people in this category. A new category of ‘disadvantaged job seeker' should be introduced to ensure early access to ISca. Perverse incentives should be removed and the existing fee structure and star ratings must be revised, in line with our detailed discussion paper: A Job Network for Job Seekers available at http://www.catholicsocialservices.org.au/. A final outcome payment should be introduced to ensure people who have been unemployed for between four and 12 months get sustained employment less likely to lead to long term unemployment. The Department of Employment and Workplace Relations' administrative budget for Job Network should be limited to a fixed maximum of 10 per cent of total program funds.

Family Relationship Services

Establishment funding for Early Intervention Services in Family Relationship Services should be made available. Feedback from Catholic Social Services Australia member agencies suggests the lack of establishment funding will limit the program's effectiveness, especially considering agencies' limited funding base.

Childcare

Since 1991, childcare affordability has declined for all households except high income earners. The Childcare Tax Rebate should be replaced by a Child Care Benefit Guarantee, ensuring all families using approved childcare would receive a minimum of 30 per cent of the government recommended fee with some disadvantaged families receiving up to 85 per cent.

Childcare costs are rising at a much faster rate than CPI. The Government should review the current CPI linked method of indexing both the Child Care Benefit Guarantee and the Child Care Tax Rebate.

Family Tax Benefits

The family income test for the maximum rate of Family Tax Benefit Part A should be maintained at $40,000. Family Tax Benefit Part B should be means tested for ‘couple families', based on the combined income of the family.

Effective Marginal Tax Rates (EMTR)

Despite recent cuts to personal income tax rates, effective marginal tax rates remain high for people who combine part time work with benefits. More than one in eight unemployed people on income support has an EMTR of more than 50 per cent. To reduce EMTRs the Government could increase the Low Income Tax Offset. This would target people in greatest need.

Welfare to Work Evaluation

The Commonwealth Government must commission and fund at least one research project to evaluate the combined impact of welfare-to-work and ‘WorkChoices' for each of the four main groups of people affected - principal carer parents, people with disabilities, mature-aged job seekers and the very long-term unemployed.

Social Security Compliance and Financial Case Management

Catholic Social Services Australia opposes the eight week non-payment system. Non compliance usually indicates needs are not being met.

However if the Government persists with the eight-week non-payment period, eligibility for Financial Case Management should be extended to all people on income support who incur this penalty. Where an eight-week non-payment period is imposed, that penalty should be lifted as soon as the unemployed person meets his or her participation requirements.

People who fail participation requirements three times in a 12 month period should get access to escalated levels of services to identify any barriers to employment, and access to intensive services to address these barriers.

Marginal Financial Benefit from Employment

Many people, especially single parents and people with a disability, face high effective marginal tax rates when they combine part time work with benefits. Current policy requires single parents to accept work if their net weekly benefit will be as low as $50 after tax, benefit withdrawal, childcare and transport costs, and any increase in public housing rent. There is no equivalent policy for people with a disability.

The net amount a principal carer parent must gain from employment should be increased from $50 to $150.

Mental Health

Approximately 30 per cent of people on income support have a mental illness. This high prevalence coupled with the need to link people with a mental illness with broader social services was recognised by the Council of Australian Governments' National Action Plan on Mental Health. A mental health awareness training package should be developed for community sector front line staff who provide services to people on income support.

Dental Care

Over 30 per cent of concession card holders have not visited a dentist in the last two years, despite the fact that they are generally eligible for public dental treatment. Almost one in four non-concession card holders delays or avoids access to dental treatment because of the cost.

Timely access must be ensured for a free course of basic dental treatment for concession card holders. The maximum income limit for eligibility of low-income Commonwealth Health Care Cards should be increased for dental care.

Housing

The housing needs of low income people are being overlooked.

Around 100,000 Australians are estimated to be homeless on any given night. Demand for public housing has increased in the past ten years but the number of dwellings has fallen during that time, exposing more low income people to the private rental market. At the same time the private rental market is increasingly outside the reach of people on low incomes. Households whose incomes are in the lowest 20 per cent spend an average of 64 per cent of their income on housing costs.

Catholic Social Services Australia calls for a national public inquiry into the housing needs and housing solutions of low income households. As a first step the First Home-Owner Grant should be means tested to allow low income households to buy their own home, rather than having to rely on the rental market.

A full copy of Catholic Social Services Australia's 2007 Federal Budget Submission is available at http://www.catholicsocialservices.org.au/.

Catholic Social Services Australia provides services to over a million Australians each year.

8 December 2006

CONTACT Judith Tokley 02 6285 1366 / 0408 824 306