Welfare 'Window Dressing' Hides Unemployed and Regional Disadvantage

On Sunday 3 December the Australian Local Government Association launched the State of the Regions 2000 Report, prepared by the National Institute of Economic and Industry Research. Confirming the lived experience of many families and regional communities, the Report reveals that the real unemployment rate is in fact substantially higher than the Government claims, and that the employment situation in the most impoverished regions is especially dire.

Mr Toby O'Connor, Executive Secretary, said "State of the Regions 2000 has shot holes in Government claims of dramatic improvements in unemployment rates. The Report finds that social security policy changes made by Governments over the 1990s, particularly large scale shifts of unemployment benefit recipients into other forms of social security support and tightened work activity tests have, 'artificially lowered the national and regional unemployment rates, especially in high unemployment regions'. Much of the decline in the official unemployment rate has reflected Government 'window dressing', the Report argues. Participants in mutual obligation schemes, such as work for the dole, are not considered as officially unemployed.

"The Report reveals that once corrections are made for deceptive social security policy changes introduced since 1991, the national unemployment rate has in fact remained above 10% for much of the past decade and that in June this year the real unemployment rate was actually 9.4% - in contrast to the official national average of 6.6%.

"More disturbing yet, the Report provides confirmation of the Commission's findings in its recently published Regional Australia in a Globalised Economy discussion paper, that policy is failing to reverse growing inequalities between regions. In more than half of the nation's regions, the real unemployment rate was above 10% in mid 2000 and some regions endure unemployment rates at double the official level. While inner metropolitan Sydney may be enjoying full employment, regions including Eyre, Yorke, Northern Adelaide, Northern Rivers of NSW, Gippsland and all of Tasmania have unemployment rates in excess of 14%, with Mersey-Lyell in Tasmania currently at over 21%. With the exception of Sydney, virtually all of the nation's regions now have unemployment rates that are the same or worse than they were in 1991.

"These findings, which identify regional communities that have fallen into a 'vicious cycle' of disadvantage, confirm the Commission's conclusions that:

q As an essential part of the current Welfare Reform process, the    Government must meet its social obligation to address the real structural and regional-level factors generating the scourge of unemployment. Indeed, this accords with the McClure Report on Welfare Reform which recognised that 'much social and economic disadvantage is clustered in particular communities'

Policies extending mutual obligation and harsh penalties to all income support recipients, including sole parents, are unlikely to provide a just solution to the problems Government cite as justifying welfare reform.

q Concern for entrenched regional disadvantage must become integral in designing economic policy which, as State of the Regions 2000 maintains, is currently 'inimical to regional development'. The Report confirms that despite the many laudable regional initiatives, these lack coherence and effectiveness. The fundamental problem remains that regional development is relegated to a position 'on the margins of economic policy'. While Government pursues the so-called main game of structural economic reform, persistent and localised disadvantage is dealt with by typically ad hoc, if well intentioned, regional initiatives. Again, the Commission urges the Government, in co-operation with the States, to make a comprehensive and convincing response to the situation of our nation's most disadvantaged regional communities.

"The Government's version of mutual obligation in this appalling, regionally divided labour market send the unemployed to seek out non-existent jobs, punishes them when they fail and then (statistically) denies their very existence", Mr O'Connor concluded.