Quotes of the Week

"We truly hadn't ever considered that people could just be really evil." [Cloudflare CEO Matthew Prince in Gizmodo on 1 December 2017, on why this service provider company protects virulent neo-Nazi website The Daily Stormer]

"Some families, some communities, some cultures breed strife. Governments cannot always fix it. Compulsory contraception for those on benefits would help crack intergenerational reproduction of strife." [NewsCorp journalist and newly appointed  head of the Australian Charities and Not-for-profits Commission, Gary Johns, in BuzzFeed, 19 May 2015]

Pauline Hanson - bad taste personified

As part of One Nation’s 2017 Queensland state election campaign the tin-eared Pauline Hanson (who consistently supports Turnbull Government punitive social & economic policies in the Senate) has a so-called 'battler bus' on the road…..

She is launching a ‘battler bus’ with champagne. YOU CAN’T MAKE THIS UP. pic.twitter.com/9CyaZ85wY1

— Sam Dastyari (@samdastyari) November 6, 2017

Cashless Debit Card problems ignored by Turnbull Government

“For example, data is provided which shows that 55% oftransactions on the cards failed due to insufficient funds (Orima 2017: pA6). That is nearly 21,000 transactions,where people were unable to purchase what they wanted.However, only 1% of failed transactions related to trying to use the card for prohibited purchases. This indicates some hardships and poverty and/or the problem that people did not know what their card balance was, indicating the challenge of money management using this card. Another reported problem related to the need to access phones and internet to find card balances, which can cause many problems for those without phones, phone credit, internet access, or not being in a mobile phone or internet server area.” [Hunt, J, T h e  C a s h l ess  D e b i t  C a r d  Tr i a l  E va l u at i o n : A  S h o r t  Re v i e w]

Yet another voice expressing concerns that the Turnbull Government is ignoring problems with the Cashless Debit Card system.

Opening remarks in Dr Janet Hunt’s (Centre for Aboriginal Economic Policy Research, Australian National University, Canberra) submission to the Senate Community Affairs Legislation Inquiry into the Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, 2 November 2017:

Thank you for the opportunity to make this submission. I write as an experienced social science researcher with over 30 years of experience in the fields of international and Indigenous development. I am as concerned about the situation of Indigenous people in Ceduna and the East Kimberley as anyone, and very much want to see their lives improve. I am also very much driven by evidence about what works, and as a social science researcher am concerned that the evidence provided for policy making is the most robust and credible as possible. This is both in order to get the best outcomes, but also to ensure the greatest efficiency in public expenditure.

The proposed legislation seeks to make possible the extension of the Cashless Debit Card trial in Ceduna and the East Kimberley and facilitate the expansion of this program geographically. My concern is whether the evidence of the trial evaluation supports this continuation and expansion, and whether the considerable cost of this program is reaping commensurate benefits. In public policy there are always opportunity costs of any expenditure. In other words, my concern is whether this program is the best way to spend limited public funds to reach a desired outcome or if there are more cost efficient and effective alternatives.

My interest in this was sparked when the Wave 1 Report was released in March this year, and I decided to look at what the evaluation said. I was shocked when I read the report, as the Minister had already announced that the trial was a success and would be continued indefinitely. When I read the report, I discovered that it was extremely flawed and did not provide adequate evidence to draw the conclusions that had clearly been drawn. As I was extremely concerned at the poor quality of the evidence on which the Minister had made his decision, I wrote a critique of the Wave 1 Report, which was peer-reviewed and published by CAEPR. It is this Wave 1 evidence which the Statement of Compatibility with Human Rights relating to this Legislation uses to justify the proposed legislation. I argue that this evidence is flawed, and does not provide a sound basis for continuing the Cashless Debit Card Trial (CDCT) program. Whilst superficially appealing, a careful analysis of the evaluation reveals many problems with the purported findings.

Given my concerns about the quality of the Wave 1 Report and the Minister’s interpretation of data from it, I was naturally interested to read the Wave 2 Report. Just before the report was released, the Minister issued a Press Release which hailed the success of the trial without qualification. But once the Report was public it was clear that the Report’s authors had in fact qualified their positive findings with many caveats which have been completely ignored by the Minister in his public statements about the evaluation. So while I have serious problems with the evaluation design and the data presented, I am also aware that the Minister has ignored important reservations about some of the findings that the Report’s authors did make clear.

This submission outlines many of the shortcomings of the evaluation, both Wave 1 and Wave 2.

Read the full submission here with attachment.

So how much Centrelink client debt was not debt at all in 2015-16 & 2016-17?

Australian Minister for Social Services Christian Porter is quick to point the finger but often very slow with concrete answers, so it is always a boon when annual departmental reports are published.

In September 2017 the latest DSS annual report was published.

Although carefully disguised in the wording "waived or written off"; by adding the 2016-17 annual report's financial statements together with the previous year’s annual report, one finds that the admitted amount of false client debt generated by Centrelink’s disastrous attempt to match Australian Taxation Office data with its own client records could possibly be as high as $264.645 million over a two financial year period.

As challenging a Centrelink debt letter was a distressing and often extremely difficult obstacle course for many welfare recipients, these hundreds of millions of dollars represent the determination of hundreds of thousands of ordinary Australians to fight back against false claims made on their wallets by government and the besmirching of their reputations.

On 26 October 2017 The Canberra Times reported that; Human Services official Jason McNamara told a Senate estimates hearing that in 202,000 cases where the department finalised the debt amount, 49,000 welfare recipients who received letters since the 'robo-debt' program started in July 2016 were found to owe nothing.

That means that 25.25% of these 202,000 debt notices were false claims as the Centrelink client was found to owe nothing.

In July and August this year Centrelink sent out a total of 114,000 debt letters.

At least est. 28,785 of these letters will probably represent a false claim of debt.

I hope all Centrelink clients who received one of these letters are querying each and every one.

BACKGROUND

Dept. of Social Services Annual Report 2016-17

Dept. of Social Services Annual Report 2015-16

News Corp joins Turnbull Government in bashing welfare recipients yet again

A report released by the Federal Government's Australian Institute of Health and Welfare [AIHW] on 19 October 2017 states that welfare spending in 2016 reached 9.5 per cent of Australia's Gross Domestic Product (GDP) having been increasing on average by 0.09 per cent or est. $4 billion annually over the last ten financial years.

Some of this increase is inevitably due to population growth over the same period - between 2006 and 2016 the national population grew by 3.18 million people to reach a population total of 24.20 million.

However, the media suitably primed began to discuss welfare costs principally in terms of cash transfers to Centrelink clients.

But does such discussion take in the whole picture of welfare costs in this country? 

According to the Australian Taxation Office (ATO) there are a large number of concessions, offsets and rebates available to working and retired individuals, active businesses, family trusts and superannuation funds.

These can reduce the annual tax payable by an individual, business, trust or fund – sometimes as low as zero dollars.

Along with universal education and health services, Centrelink and Veterans’ Affairs pensions, benefits, and concessions; these ATO concessions, offsets and rebates are a form of government welfare.

So when the Murdoch media trumpet statistics like “Last year, more than 733,000 people received unemployment benefits, costing $10 billion” with est. 68 per cent of recipients moving off this payment within a year - remember that Australian Government tariff, budgetary assistance and tax concessions to primary, mining, manufacturing and services industries totalled $15.1 billion in 2015-16 and, based on past performance, an estimated 33 per cent of all businesses would probably have paid zero tax in that year.

Put simply, Australian Government welfare directed at industry cost taxpayers est. $41.3 million per day in 2015-16.

And when these same News Corp megaphones go on to state that “more than 100,000 jobseekers who were on the dole for at least five years had cost taxpayers $15 billion over the past decade” – readers might like to recall that the Australian Government spent in the vicinity of est. $96 billion on industry assistance in the six years commencing 2010-11 and ending 2015-16.

[Australian Government, Productivity Commission Annual Report Series, Trade & Assistance Review 2015-16]

If a similar level of government assistance were to continue for another four financial years then government welfare received by industry would reach est. $156 billion over ten years.

That's over ten times the quoted amount in welfare payments outlaid on the long term unemployed in a decade.

However, when the likes of Liberal Minister for Human Services Alan Tudge, Liberal Minister for Social Services Christian Porter, Liberal Senator Eric Abetz or One Nation Leader Pauline Hanson talk about the cost of government welfare programs they rather strangely neglect to look at the full range of federal government financial assistance across all sectors of the economy – preferring instead to target vulnerable groups of people with little ability to fight back against their distorted, punitive and highly politicised world views.

Australian Human Rights Commission does not support expansion of the Cashless Debit Card Trial

Excerpts from Australian Human Rights Commission (AHRC) submission to the Senate Standing Committees on Community Affairs Senate Inquiry into Social Services Legislation Amendment (Cashless Debit Card) Bill 2017:

Human rights concerns

As a form of income management, the Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 raises a number of human rights concerns, specifically around the right to social security, the right to a private life and the right to equality and non-discrimination. [my yellow highlighting]

The Commission has previously reported its concerns about the cashless debit card (also known as the Healthy Welfare Card) in our submission to the Inquiry into the Social Security Legislation Amendment (Debit Card Trial) Bill 2015 and in the Social Justice and Native Title reports for 2015 and 2016. ²

The Commission has particularly been concerned about the effects of these income management measures in relation to Aboriginal and Torres Strait Islander peoples, whom we have previously identified to be a group that are disproportionately impacted by such measures.³ As at September 2016, 75% of trial participants in Ceduna and 82% of trial participants in the East Kimberley were Indigenous.⁴

Whilst the Explanatory Memorandum acknowledges that trials of the cashless debit card are already underway in areas with high Indigenous populations, it proposes that future sites will give priority to locations with lower proportions of Aboriginal and Torres Strait Islander peoples.⁵

The Commission remains concerned that the measures will continue to disproportionately affect Aboriginal and Torres Strait Islander people, not just in the existing locations of the East Kimberley and Ceduna where Indigenous populations are high, but also in future locations.

This is the case because the measures proposed in the Bill target a section of the population who are receiving income support payments.

Hence, whilst the measures may not directly target Aboriginal and Torres Strait Islander peoples, their practical effect will unduly impact upon them, as government pensions and allowances are a main source of income for approximately 46.9% of this group.⁶

There are therefore concerns about whether the measures are inconsistent with the Racial Discrimination Act 1975 (Cth) and guarantee Aboriginal and Torres Strait Islander peoples equality before the law.

The Commission considers that the measures are not proportionate to the benefits sought by the Bill because their purpose could be achieved through other, less restrictive means and emphasises what it considers to be the preferred features of a system of income management:

* an approach that enables participants to voluntarily opt-in, rather than an automatic quarantining model (which then relies upon individual applications for exemptions)

* an approach that utilises income management as a ‘last resort’, particularly for targeted risk areas such as child protection (that is supported by case management and support services), similar to the Family Responsibilities Commission model in Queensland

* measures that are applied for a defined period and in a manner proportionate to the context.⁷

The Commission does not accept the arguments in the Statement of Compatibility with Human Rights that the measures justifiably limit the right to social security, privacy and non-discrimination and equality in pursuit of the objectives of Part 3D of the Act.⁸

As non-voluntary measures, they are applied to all income support recipients of working age in the trial areas,⁹ including those who do not have any issues with drugs, alcohol or gambling.

For the reasons outlined above and in the Commission’s previous submissions, the Commission does not agree with the assessment that the Bill or existing cashless debit card measures are compatible with human rights standards.¹⁰……

It is difficult to attribute the reported positive effects to the current trials as distinct from other factors such as increased support services, and other policy interventions.¹⁵ This is further exacerbated by the self-reporting nature of the report’s findings, which the evaluation itself states should be interpreted with caution and are subject to desirability bias.¹⁶

However, it is important to consider that where people have experienced modest benefits as a result of income management, when compared to its stated objectives,¹⁷ that these need to be weighed against its significant drawbacks.

The Commission does not accept that it is appropriate to extend these measures to additional sites in order to “build on these positive findings, and offer an opportunity to continue to test the card’s effectiveness in different settings and on a larger scale”.¹⁸ There is limited evidence to demonstrate that previous income management efforts have been effective and this is confirmed by the findings from the Orima report.

The Commission is therefore of the view that these measures unjustifiably impinge on the rights of trial participants, for little substantive benefit…..

Conclusion

Human rights protections are inadequately addressed in the Bill, the Explanatory Memorandum and in the Statement of Compatibility. The Commission is particularly concerned about the non-voluntary nature of the measures, and the disproportionate impact on Aboriginal and Torres Strait Islander peoples and those income support recipients who do not have drug, alcohol or gambling concerns.  [my yellow highlighting]

The Commission is of the view that income management measures which are imposed and not community-driven lack efficacy.

The Commission is of the view that less intrusive measures aimed at changing behaviour rather than limiting access to and use of income will be more effective. It is for this reason that the Commission welcomes the investment of support services into these communities, but hopes that the appropriateness and level of engagement with such services improves.¹⁹

In light of these views, the Commission does not support the expansion of these measures as outlined in the Bill.

_______________________________________________________________________

2 Mick Gooda, Aboriginal and Torres Strait Islander Social Justice Commissioner, Submission to the Senate Standing Committee on Community Affairs, Inquiry into the Social Security Legislation Amendment (Debit Card Trial) Bill 2015, 6 October 2015, At http://www.aph.gov.au/DocumentStore.ashx?id=14a9925c-245c-4a2e-9bfa-eeb6c843e505&subId=403485; Mick Gooda, Aboriginal and Torres Strait Islander Social Justice Commissioner, Social Justice and Native Title Report 2016, 88-97, At http://www.humanrights.gov.au/sites/default/files/document/publication/AHRC_SJNTR_2016.pdf; Mick Gooda, Aboriginal and Torres Strait Islander Social Justice Commissioner, Social Justice and Native Title Report 2015, 55-58, At http://www.humanrights.gov.au/sites/default/files/document/publication/SJRNTR2015.pdf.

3 Mick Gooda, Aboriginal and Torres Strait Islander Social Justice Commissioner, Submission to the Senate Standing Committee on Community Affairs, Inquiry into the Social Security Legislation Amendment (Debit Card Trial) Bill 2015, 6 October 2015, 5.

4 Mick Gooda, Aboriginal and Torres Strait Islander Social Justice Commissioner, Social Justice and Native Title Report 2016, 91-92. See also Orima Research, ‘Cashless debit card trial evaluation: final evaluation report’ (Department of Social Services, 2017), 38, showing similar proportions as at June 2017.

5 Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, Statement of compatibility with human rights, 4, 7. 

6 Productivity Commission, Overcoming Indigenous Disadvantage Report 2016, 9.31. At: https://www.pc.gov.au/research/ongoing/overcoming-indigenous-disadvantage/2016/report-documents/oid-2016-chapter9-economic-participation.pdf.

7 Australian Human Rights Commission, Submission No 76 to Senate Standing Committees on Community Affairs, Inquiry into the Welfare Reform and Reinstatement of Racial Discrimination Act Bill 2009 and other Bills (10 February 2010), 26.

8 Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, Statement of compatibility with human rights, 7-8.

9 Orima Research, ‘Cashless debit card trial evaluation: final evaluation report’, (Department of Social Services, 2017) 3.

10 Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, Statement of compatibility with human rights, 8. 

16 Orima Research, ‘Cashless debit card trial evaluation: final evaluation report’, (Department of Social Services, 2017) 118.

17 Department of Social Services, Guide to Social Security Law [11.1.1.30] http://guides.dss.gov.au/guide-social-security-law/11/1/1/30. 

18 Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, Statement of compatibility with human rights, 3.

19 According to the Orima report, only 19% of those surveyed indicated that they used the drug and alcohol support services provided. Orima Research, ‘Cashless debit card trial evaluation: final evaluation report’, (Department of Social Services, 2017) 8. 

National Party President Larry Anthony is not happy and neither are a good many Australian voters

On 30 September 2017 Lawrence James "Larry" Anthony (pictured above) was not happy and here’s the reason why:

Media reporting of The SAS Group

The Directors of The SAS Group note reports in Fairfax newspapers today which refer to our firm.  The SAS Group prides itself on achieving outstanding results for our clients.  That has been our track record since our inception almost a decade ago, and we make no apology for the fact that we give our clients the best advice and guidance to help them achieve their business goals.

At all times we operate in accordance with the Federal lobbying laws and code of conduct, and we will always do so. We note that the Fairfax journalist has made no allegation of impropriety, and was not able, when asked, to point to any breach of the relevant code.

We are unbothered by the baseless implications upon which the news story is founded.  However, we are deeply offended that our hard-working staff and consultants should have their achievements debased in this way.

The SAS Group has risen to be one of Australia’s leading strategic communications consultancies because our consultants have a breadth of experience in media, government and a range of industry sectors.  We value the outcomes achieved by our personnel, and we – and our clients – understand that the firm’s success is derived not from the standing of one director, but from the efforts of our entire team.

The media report in question can be found in The Sydney Morning Herald of the same day, Nationals Interest: Larry Anthony, the party president who runs a lobbying firm.

On 30 September 2017 thousands of voters across Australia were also not happy and here’s their reasons why:

The Catholic Leader, 27 September 2017:

THE plan to rollout cashless welfare cards to thousands of residents on the dole in Hervey Bay-Bundaberg has sparked a fierce backlash from opponents claiming the cards will cause social segregation, stigmatise job seekers and entrench poverty.

“The people of the Hinkler region (Hervey Bay-Bundaberg) are feeling threatened, scared and worried for their financial futures and inclusion in our communities,” Hervey Bay’s Kathryn Wilkes, who has launched an online petition opposing introduction of the Federal Government scheme early next year, said.

The scheme is based on a suggestion by Western Australian mining billionaire Andrew Forrest, that 80 per cent of welfare payments be cashless and only available via an electronic debit card that cannot be used for alcohol or gambling.

“The insults that we cannot manage our funds, that we are all drunks, druggies and pedos are unjust and not true,” Ms Wilkes said.

“The cashless welfare debit card will completely destroy people on so many levels and we don’t have the mental health services to cope with the loss of self and autonomy.

“The card does not care what colour your skin is, your religion, or your circumstance; it is about profits for private business.”

The Guardian, 18 September 2017:

A new research paper has issued a damning assessment of the quality of the report the Turnbull government has been using to promote its cashless welfare card trials, saying the report shows the program is not working.

Janet Hunt, the deputy director of the centre for Aboriginal economic policy research at the Australian National University, says the government has ignored serious flaws in the Orima Research report, which it released this month.

She said the report showed the government’s cashless card trials had not actually improved safety and violence figures in the two trial sites in Ceduna and the East Kimberley, despite that being the point of the card.

Her findings support the work of social researcher Eva Cox, who has already found significant problems with the design of the report, including the way interviews were conducted in Indigenous communities and the ethics of the process.

“Indeed, the authors qualify a number of their apparently positive findings with various caveats, but, at the same time, the evaluation itself has serious flaws, so even these findings are contestable,” Hunt says in her report, The Cashless Debit Card Evaluation: Does it Really Prove Success?

ABC News, 14 September 2017:

A researcher studying the impact of the cashless welfare card has linked the Federal Government's welfare program to the issue of youth suicides in the Kimberley.

Coroner Ros Fogliani is examining the suicides of 13 children and young adults in the Kimberley, and is this week hearing testimony in the town of Kununurra.

Among those to give evidence was Melbourne University researcher Elise Klein, who is midway through a study on the effects of the implementation of the cashless welfare initiative in Ceduna and the west Kimberley.

All of the suicides being examined in the inquest took place before the cashless welfare card trial began in the East Kimberley in April 2016.

But Dr Klein argued the program would add to the disempowerment felt by Aboriginal people in the region.

"It has become a symbol of not having control over one's life and of state intervention over people's lives," she said.

Questioned on her findings so far, Dr Klein said local people and the community as a whole felt weakened by being subjected to the mandatory spending restrictions.

"Maybe the relevance to this inquest is that the kind of atmosphere that this feeds into is extremely disempowering for people.

Dr Klein was scathing of the implementation of the cashless card program, saying there was no proper consultation in Kununurra or Wyndham, and inadequate explanation as to how it worked.

"People were given a manual, that was full of technical language that was difficult to understand, so people had a lot of difficulty using the card," she said.

"When the trial began there was a fair amount of chaos.

"People were directed to a mobile app to check their balance, but some people didn't know how to use the internet, never mind have a mobile phone."

What connects all this unhappiness? Well it’s the SAS Consulting Group of which Larry Anthony is a founding director and part owner through Illalangi Pty Ltd as Trustee for the Anthony Family Trust and Indue Limited a financial services corporation established in 1999.

Anthony is listed as an owner, as well as a contact person for and employee of the SAS Consulting Group on the current NSW Register of Third-Party Lobbyists.

In my opinion this is a blatant work-around of the Australian Government Lobbying Code of Conduct at s8 & s10, because the NSW Lobbying of Government Officials (Lobbyists Code of Conduct) Regulation 2014 allows for more wriggle room.

From 17 February 2005 to 30 October 2013 Larry Anthony sat on the Indue board as a director and, for much of that period he was also Senior Vice President Australia of the National Party.

The Australian Government Register of Lobbyists shows that Indue Limited is one of the 19 clients on whose behalf SAS Consulting lobbies. Indue has been reportedly a client since mid-2014.

Indue Limited has the federal government contract to supply the cashless debit card and associated financial/banking services.

All welfare recipients, excepting age pensioners, have been placed on the cashless debit card in Ceduna SA, Kununurra and Wydham WA.

By January 2018 it is expected that all welfare recipients under 35 years of age who receive unemployment or single parent benefits and live in Goldfields WA or Hervey Bay Qld will also be placed on this income management scheme.

It is likely that within the next five years an est. 24,633 people on Centrelink income management as of 25 March 2016 will also be transferred onto the cashless debit card program.

Larry Anthony can expect to see more media articles in the future which make him uncomfortable, now his relationship with Indue Limited has begun to be scrutinised.

BRIEF BACKGROUND

SAS Consulting Group Pty Ltd talks up Larry Anthony:

Larry has had a distinguished career in both business and politics and is the current President of the National Party, one half of the ruling Coalition Government. 

He is the founding Director of the SAS Group and prior to his current commercial career was a former member of the Australian Parliament and served between 1996- 2004 in the Howard Government. During this period, he held numerous Ministries:  Children and Youth Affairs, Minister for Community Services and Parliamentary Secretary for Trade.  Larry also served on House of Representatives' Standing Committees on Financial Institutions; Public Administration; and Corporations and Securities. 

Larry was the longest serving Minister responsible for Centrelink with an annual budget of over $60 billion and is widely regarded for his achievements in social policy reforms.  In trade, he was responsible for driving export market development programs. 

Larry is the third-generation Anthony family member in the Australian Parliament - the only family in Australian history where each elected member served as Minister of the Crown and collectively served 56 years in the Australian Parliament.

Prior to entering Parliament, Larry was a stockbroker and investment banker with Potter Warburg and Merrill Lynch.

Larry is a professional company director with a keen interest in information technology, finance, media and human services sector.

As Minister for Community Services in 2000 Anthony introduced a Centrelink pilot data matching program which compared data held on welfare recipients with data held by the Australia Taxation Office and the Australian Investment & Securities Commission.

Larry Anthony held the seat of Richmond for the National Party for over eight years and lost it at the federal election on 9 October 2004.

Anthony became National President of the National Party in September 2015.

Larry Anthony's professional profile.

Indue Limited on North Coast Voices at http://northcoastvoices.blogspot.com.au/search?q=indue

#cashlesswelfare on Twitter.

More evidence that the far-right in politics and industry are determined to drive working class Australians into generational poverty?

The Sydney Morning Herald

Wage fraud, wage freezes, cuts to penalty rates and companies scrapping enterprise agreements will reduce the retirement savings of millions of workers by $100 billion by the time they retire, a report has found.

The report, the Consequences of Wage Suppression for Australia's Superannuation System by the Australia Institute's Centre for Future Work, says the government will pick up more than one third of the cost, equivalent to $37 billion in lost taxes due to lower super contributions and higher age pension payouts.

It estimates that three million people, or one in four workers, have experienced some form of wage suppression, which will adversely impact their super payout.

The author of the report, Jim Stanford, describes wage suppression as an economic "time bomb". He says while individual families are grappling with the immediate impact of wage cuts, the long-term impact when they retire is yet to play out.

[THE CONSEQUENCES OF WAGE SUPPRESSION FOR SUPERANNUATION, p.9]

Centre for Future Work at the Australia Institute, Jim Stanford, Ph.D., The Consequences of Wage Suppression for Australia’s Superannuation System, September 2017, excerpt from Summary:

Wages and salaries in Australia’s labour market are exhibiting their weakest growth in the history of the relevant statistics. Hourly wages are growing at less than 2 percent per year, and real wages (adjusted for consumer price inflation) are stagnant or falling. The unprecedented stagnation of wages reflects many factors, including chronic weakness in labour demand and the erosion of traditional wage-setting institutions (such as minimum wages and collective bargaining). But it also reflects, for millions of Australian workers, the aggressive efforts by employers (both private- and public- sector) to deliberately suppress wages below normal levels. These wage-suppression strategies take many forms: from the imposition of temporary wage freezes, to the unilateral termination of enterprise agreements, to the outright theft of wages through below-minimum payments. These pro-active measures to suppress labour incomes, breaking the normal link between labour incomes and labour productivity (which continues to grow at over 1 percent per year1), impose great harm on affected workers, their families, government budgets, and Australia’s macroeconomic performance.

There is another important consequence of these wage suppression strategies that is often not sufficiently understood by workers, employers, policy-makers and regulators: their flow-through impact on Australia’s retirement income system. When workers’ wages are unduly suppressed, then the normal flow of employer contributions into their superannuation accounts is also constrained. They will have smaller superannuation balances when they retire, and will consequently experience a lasting reduction in post-retirement incomes. Moreover, governments will share a significant portion of the resulting damage: they will collect less in taxes on superannuation contributions and investment income, and will pay out more in means-tested Age Pension benefits (since workers’ superannuation incomes will be smaller). These significant, lasting consequences from wage-suppression strategies should be documented and considered. They provide a powerful motive for all stakeholders to challenge employers’ wage-cutting initiatives. They also should be of direct concern to superannuation trustees and administrators – since the capacity of the superannuation capacity of the superannuation system to provide decent, secure retirement incomes for its members is being undermined by this growing pattern of wage suppression.

This report presents results from several quantitative simulations of the impact of wage suppression on superannuation entitlements of affected workers, their long-run retirement incomes, and corresponding fiscal effects on government. The report considers several specific scenarios, corresponding to different instances of pro-active wage suppression strategies that have been experienced by Australian workers in recent years. It traces through the impact of those policies on workers’ wages, superannuation accumulations, and retirement incomes. The simulations also describe the spill-over impacts on government (arising from reduced taxes collected on superannuation contributions and investment income, and increased Age Pension payouts). The simulations confirm that:

* Wage suppression undermines superannuation accumulations by automatically reducing employer contributions. Moreover, the damage is compounded over time due to the subsequent loss of investment income.

* Even temporary wage restraint measures (like temporary wage freezes) have lasting negative impacts on superannuation balances, by altering the trajectory of a worker’s wages for the rest of their career.

* The most dramatic instances of wage suppression – the termination of enterprise agreements by employers, and resulting large wage reductions as workers are placed back on minimum award conditions – can reduce the superannuation balance of a retiring worker by as much as $270,000.

* More modest wage suppressing policies (such as temporary nominal wage freezes, producing real wage reductions that are then sustained through a worker’s remaining years of service) reduce retirement superannuation balances by $30,000 or more.

* Government bears a share of the resulting losses, through both reduced tax collections before affected workers retire, and increased Age Pension payouts after they retire. In the worst-case scenarios, governments can experience fiscal losses of over $50,000 per worker (in real 2017 dollar terms).

* Millions of Australians have been confronted with one or more of these forms of wage suppression from their employers, so the aggregate impacts across the economy are enormous. Based on plausible estimates of the number of workers confronted with each form of wage suppression, the aggregate loss of superannuation balances on retirement (if the pattern of wage suppression is maintained) could ultimately exceed $100 billion (in real 2017 dollars) by the time affected workers retire, and the aggregate fiscal cost to government could reach $37 billion (in real 2017 dollars)………..

1 A recent Department of Finance research paper on productivity trends confirms that labour productivity continues to grow at typical historical rates – advancing at an annual average rate of 1.8 percent over the last five years alone. See Simon Campbell and Harry Withers, “Australian Productivity Trends and the Effect of Structural Change, “ August 28 2017, http://treasury.gov.au/ PublicationsAndMedia/Publications/2017/ Australian-productivity-trends-and-the-effect-of-structuralchange

[THE CONSEQUENCES OF WAGE SUPPRESSION FOR SUPERANNUATION, p.10]

Centrelink sent out 19,980 incorrect debt notices in just eight months

Australian Parliament, PARLWORK, Question Details:

Question asked of the Minister for Human Services and Liberal MP for Aston Alan Tudge on 31 May 2017:

How many Centrelink clients who were notified of a debt or the likelihood of a debt with Centrelink through its Online Compliance Intervention system, have subsequently had their debt (a) reduced, and (b) cancelled completely.

Could he provide a breakdown of parts (1)(a) and (b) by (a) state and territory, and (b) postcode.

One hundred and three days later the Minister deigned to reply:

THE HON ALAN TUDGE MP - The answer to the honourable member’s question is as follows:

1(a), 1(b) and 2(a) The number of debts reduced to zero and reduced but not to zero in total, by State and Territories as at 31 March 2017:

State	Debt Reduced to Zero1	Debt Reduced but not Zero1, 2
ACT	100	169
NSW	2,234	3,644
NT	40	79
QLD	1,665	2,718
SA	630	1,142
TAS	247	397
VIC	1,894	3,306
WA	646	1,069
Total	7,456	12,524

¹The month the change is reported is the month the reassessment or review of the debt was completed which may be different to the month the debt was raised.

2Debts can be reassessed multiple times. This is recorded each time as a reassessment in the appropriate month.

2(b) The breakdown by postcode is at Attachment A. To protect individuals’ privacy, cell sizes of less than five are represented as “<5”.

What it has taken the Turnbull Government so long to admit is that 37.31 per cent of the 19,980 incorrect debt notices sent out between 1 July 2016 and 31 March 2017 were manifestly false debts.

In the same period a further 62.68 per cent of the 19,980 incorrect debt notices had amounts owed reduced – sometimes to under $20.

What these figures do not reveal is the total number of people who received a debt notice over these eight months and the number who paid the original amount listed on the debt notice because they were afraid to challenge Centrelink even though they personally doubted that any money was owed.

Nor is there any indication of how many Centrelink clients were referred to aggressive private debt collectors by the department.

What is known was that 1,569,911 people were sent debt notices in the 2016 calendar year alone [Commonwealth Ombudsman—Department of Human Services: Centrelink’s automated debt raising and recovery system].

Of these 20 per cent were admitted by the Dept. of Social Services to be false debts and 80 per cent were recoded as debts against a Centrelink client resulting in $300 million repaid by welfare recipients over a six month period [Minister for Social Security and Liberal MP for Christian Porter, transcript, 4 January 2017].

A total of 216,000 debt notices were generated in the three months leading up to Christmas 2016 and 133,078 alleged debts were recovered.

The Turnbull Government expects to claw back a total of $4 billion from welfare recipients by 2021.

The number of suicides as a result of a Centrelink debt notice is also unknown to date, although at least one recorded death had Centrelink debt as a contributing factor.