Government turns to automation to save $2 billion in welfare payments

Welfare recipients are again one of the biggest losers in the budget, with the federal government failing to raise Newstart and moving to save billions in welfare payments by automating income reporting.      

The Morrison government will look to bring in new data-matching technology that automatically reports employment income using a single touch payroll system.

Under the plan – expected to save the government $2.1 billion over five years – employed welfare recipients will report income fortnightly and have this checked with business payroll data held by the Department of Human Services.

The government believes this measure will lead to a more accurate reporting of incomes and help welfare recipients by greatly reducing the chance of them receiving an overpayment and being forced to repay it.

But anti-poverty advocates are fearful of this measure, especially given the chaos caused by an automated welfare approach with the Robodebt debacle.

Australian Unemployed Workers’ Union (AUWU) media officer Jeremy Poxon told Pro Bono News the emphasis on overpayments unfairly framed welfare recipients as dishonest when many were desperately struggling to survive.

“This government seems to be balancing the budget on the back of disadvantage in the community,” Poxon said.

“We are concerned by this [new measure] and are looking for more detail on what it would involve.”

ah, yes: what’s a Budget night w/out a new plan to drive even more unemployed Australians to homelessness & suicide https://t.co/TPZ3nzwePK

— jeremy poxon (@JeremyPoxon) April 2, 2019

He said automating welfare systems was incredibly dangerous.

“It shows the government haven’t listened to the concerns raised in the Jobactive inquiry last year. It shows that they haven’t been paying attention to the inquiry into the ParentsNext or all the other information and case studies we keep showing them,” he said.

“There’s mounting evidence that an automation approach is punishing people unfairly and driving people in homelessness such as we’ve seen with Robodebt. $2 billion seems like a nice healthy figure to the government, but all the pain, misery and suffering that goes along with it doesn’t seem to be getting through to them.”

Greens Senator Rachel Siewert was also suspicious of the measure, calling for more information from the government.

“I always smell a rat whenever I see savings measures coming out of our social safety net,” Siewert said.

As expected, the government failed to raise Newstart in the budget, despite the sector’s growing push for a $75 a week increase to the payment.

This year marks 25 years since Newstart was raised in real terms.

#Melbourne fam, if you’re:
1) angry about the budget
2) free this thursday (the 4th)
3) like cake
plz come along to @JoshFrydenberg‘s office in Camberwell. we’re giving the treasurer a special 25th birthday cake, to “celebrate” this occasionhttps://t.co/40RampP50g pic.twitter.com/0ahZBk0vXd

— jeremy poxon (@JeremyPoxon) April 2, 2019

Instead, the government has pledged $158 billion in income tax cuts as the centrepiece of the budget.

But the Australian Council of Social Service noted these tax cuts would not help those on the lowest incomes.

While people on $200,000 will save around $224 a week, this falls to $23 a week for those earning $50,000.

People on Newstart get nothing.

“The government confirms its vision for our country is cuts, tax cuts for people who don’t need them, guaranteeing more cuts in future to essential services and our safety net for people who rely on them,’’ ACOSS CEO Dr Cassandra Goldie said.

“None of the tax cuts benefit people on the lowest incomes, as one third of households, including low-paid workers, pensioners and people looking for paid work, do not have enough income to pay tax.”

#Budget2019
People on $200,000 will get over $224 a week
People on $50k will get $23 a week
People on $25,000 (on pensions) get a one-off payment of $75 (equivalent to $1.40pw)
People on $15,000 (on Newstart) get nothing. #KeepMyTaxCut #RaisetheRate #SaveOurServices

— ACOSS (@ACOSS) April 2, 2019

Anglicare Australia said this budget was a lost opportunity to tackle poverty.

Executive director Kasy Chambers said this year’s budget would leave unemployed and underemployed people worse off.

“If you were serious about making Australia fairer, you would not be doling out tax cuts to people who don’t need them or wasting unspent money from the National Disability Insurance Scheme,” Chambers said.

“You’d lift Newstart, put in place a jobs plan, and invest in housing for people in need.

“And you would be looking for the people who need your help, instead of ignoring them.”

Mission Australia CEO James Toomey added that the government’s commitment to welfare reform had stalled.

“As it stands, the current rates of Newstart and Youth Allowance don’t even remotely cover the cost of life’s basic essentials. The government must urgently address the adequacy of these payments, as well as Commonwealth Rent Assistance to address rental stress which is pushing far too many people into homelessness,” Toomey said.

“We are again left disappointed that people on the lowest incomes have been completely overlooked in the budget.”

In a positive development, the government’s one‑off Energy Assistance Payment – which offers $75 for singles and $125 for couples to help pay their power bills – will be made available to Newstart recipients.

In this year’s budget documents, the payment was offered for a range of welfare recipients but not those on Newstart.

But Treasurer Josh Frydenberg said on ABC Radio this morning that Newstart recipients will now be included in the scheme.

Our 2019 budget coverage is brought to you by Community Sector Banking.