Centrelink’s #FakeDebt Disaster Proves Why We Need To Overhaul Our Welfare System

Is it time for a universal basic income?

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The #FakeDebt fiasco has highlighted major problems with Centrelink’s debt recovery system. But even if the government somehow manages to deal with the fallout, we need to do some soul-searching about how we can build a fairer welfare system and an unconditional safety net for everyone.

Many have decried the supposed mass debt recovery as an error-ridden attack on Australia’s poorest and most vulnerable citizens. The automated system appears to be sending the message to a large chunk of current and previous welfare recipients that they are not only a burden on the system, but frauds and cheats as well.

But if we entertain the idea that a fraction of the widely-contested debts are justified, is there a way we can ensure the structure a fairer system? Could we reduce the administrative spend, without resorting to robodebt?

Perhaps it’s time that the Universal Basic Income (UBI) was seriously considered for Australian citizens. The concept of the UBI is that everyone is entitled to a base payment, regardless of employment status or income. There are different concepts on how much the payments would be. Some suggestions include a percentage of the average income, a liveable wage set anywhere between $10,000-$40,000, and welfare could either be abolished entirely, or treated as a ‘top up’ depending on someone’s health, age and potential disabilities.

For Australia, it’s a huge cultural leap, considering one of the nation’s favourite pastimes is demonising people on welfare.

We Need To End The Country’s Obsession With “Dole Bludgers”

In Australia, the great myth of the “dole bludger” persists in part thanks to the relentless media obsession with a small minority of people supposedly misusing the system.

An article in New Matilda published last year chronicled The Daily Telegraph’s fixation on Newstart and disability support pension recipients, documenting their inflammatory yet catchy headlines like “Dole Shirkers Shun Work” and misrepresentation of statistics.

While Australians are broadly supportive of welfare as a system, a 2015 study of data collected from the Australian Survey of Social Attitudes showed a negative attitude towards welfare recipients as individuals, with the majority of respondents agreeing that welfare is too easy to access and most people accessing welfare are not trying hard enough to get a job.

But it wasn’t always this way. The turn towards welfare recipients being viewed as undeserving beneficiaries of taxpayer money really took hold in the 1970s, after the global oil crisis of 1973 that triggered inflation during a period of worldwide recession. As a result, unemployment began rising rapidly, and neoliberal ideas of welfare payments as ‘discrimination’ against workers, ‘taxation as theft’, and ‘trickle-down economics’ began to take hold. In 1976, Liberal MP John Hodges compared receiving dole money to ‘shoplifting’.

It’s these economic principles that have shaped the punitive approach to welfare we have now — not some kind of technical desire to crackdown on widescale rorting as you might be led to believe. Despite the increasingly difficult requirements to receive payments that are still well under the poverty line — long waiting periods, obligatory “job seeking” appointments, and spending hours on hold — it’s rare to see the government discuss any welfare measures without stoking the flames of “bludger-phobia”.

Economically, many US studies demonstrate that welfare payments are associated with a decrease in crime, which makes sense anecdotally, given that people who have no other option to feed or clothe themselves may turn to crime. And economists argue that, dollar-for-dollar, money invested into reducing inequality (such as through unemployment benefits) is better for the economy than tax cuts, because it is spent, rather than hoarded. Some research suggests that even just the presence of welfare programs can encourage entrepreneurship in the US, as people are likely to take more business risks if they have a back up.

So there’s a lot of evidence in favour of a strong welfare system. But what could it look like?

Is It Time For A Universal Basic Income?

That’s where a UBI comes in. It would provide every citizen with a safety net in case of hardship without forcing them to jump through the bureaucratic hoops of a government touting a simplistic ‘lifters and leaners’ approach. But what about the cost? Fairfax economics editor Peter Martin argues that abolishing the tax-free threshold might be enough to cover it.

The reality is, every one of us could end up in a financial crisis not of our making. The hardest selling point for establishing a UBI in this country is the idea that people deserve something for ‘nothing’ — or the wild idea that people ought not to starve because of their economic fortunes.

Perhaps our anti-welfare ideas are motivated by jealousy as well. Research in the US from 2011 showed that people were happier and had better mental health outcomes when unemployed, than when working in jobs they hated. This raises serious questions about the inherent value of work for work’s sake.

The UBI could in theory force employers to raise morale and incentives in their workplaces so that people stay in jobs they enjoy. It would also mean more people might have the option to contribute to society in other ways — through volunteering, art, science, caring or technological innovation.

This might all sound like a complete fantasy. But Finland is set to begin a trial of a UBI for a random group of citizens this year, and Utrecht in the Netherlands will do the same. A small-scale program of a UBI in Kenya showed “large increases in psychological wellbeing” of recipients.

With the world workforce marching towards the prospects of increased automation, self-driving cars and robots, we might have to have this conversation whether we like it or not. But the biggest challenge for Australia, and especially our politicians, will be letting go of the spectre of the narrative that has haunted us for over 42 years — that of the “dole-bludger”.

Amelia Paxman is a Brisbane-based doco filmmaker and writer.