Australia's Mutual Obligation Policy Revisted: A Brisbane Study

The Government in Australia, under its Mutual Obligation policy, increased surveillance, obligations and breach penalties that are brought to bear on ever-widening groups of welfare beneficiaries. During the 2000-2001 year, 386,946 breach penalties were applied to welfare recipients. This represents a trebling of breach penalties compared with 3 years ago. 56 individuals who had breach penalties applied were surveyed in Brisbane, to compare their experiences with the Government's stated expectations.

The escalating Mutual Obligation regime implemented by the Howard Coalition Government in Australia is reviewed in the context of high unemployment. Breach penalties are defined and the increased usage of breach sanctions is set out. The findings from this Brisbane survey are compared with the Howard Government's stated expectations for its Mutual Obligation policy. The paper concludes with a discussion of the ethics of Mutual Obligation ideology and the likely impact of this policy on new groups of people who receive welfare payments. Pensioners with a disability, single parents and refugees holding temporary protection visas are now being included in this punitive breaching regime.

Prime Minister Howard asserted that the Government should assist those in genuine need. He also noted "it is the case that -- to the extent that it is within their capacity to do so -- those in receipt of such assistance should give something back to society in return, and in the process improve their own prospects for self-reliance." "Giving something back to society" is compulsory and can include specified job seeking or volunteer work, study to improve employment prospects or participation in unpaid workfare programs.

The Howard Government expected Mutual Obligation would be an effective and robust compliance regime ensuring that unemployed people would actively seek work and move "off-benefit" quickly. However with few jobs available, unemployed people are now subjected to more surveillance, duties, and punitive measures than previously. Unemployment payments are no longer a right, but are conditional upon compulsory participation in workfare programs.

The Howard Government is now using computer driven automatic reporting systems designed to pressure and compel people to urgently look for work and engage in compulsory workfare programs. The Government sees this activity as politically expedient. It promotes the Mutual Obligation compliance process by inciting public and bureaucratic opprobrium against unemployed welfare beneficiaries. Ministers manipulate community attitudes.

For example, the Deputy Prime Minister claimed that people accepting welfare payments but not looking hard enough for work were "deliberately shirking work" which was "not the Australian way." Various Ministers, using palpably derogatory terms, imply that many welfare recipients are "dole bludgers" and "cheats" who need to be "flushed out."

Government rhetoric also influences attitudes of Department of Family and Community Services bureaucrats about how they treat customers, as evidenced particularly by the diminution of fair treatment and due process. Two senior officials within the Department conceded that significant rises in the breach rate coincided with the implementation of Mutual Obligation initiatives that resulted in government staff becoming "more willing to impose breaches."

The system now concentrates excessively on achieving high breach rates and penalties, which have come to dominate the entire compliance system which is already among the harshest in the world.

Initially only jobless young people were targeted for compulsory workfare. But soon other groups were included. People up to age 50, then all people of working age up to retirement. Government Activity Test requirements will include single parents with school age children who are in receipt of support benefits.

New legislation has been presented to enable some people who have disabilities to lose their pension eligibility, have their payments reduced and be treated as unemployed job seekers. Such people will be obliged to job search and meet Activity Test requirements, subject to the breach penalties mandated under Mutual Obligation. The Government is now canvassing the notion that single parents on welfare need to undertake compulsory "parenting training" in order to avoid their children succumbing to "welfare dependence" across generations.

Indicative of the obsessive nature of the Howard Government's punitive attitude towards the most disadvantaged Australian welfare recipients, it has introduced into Parliament a special Bill seeking to expose holders of Temporary Protection Visas (TPV) to Activity Testing and Mutual Obligation provisions. TPV holders are refugees who had to prove that they suffered persecution in their homeland in order to qualify for their temporary visa.

Given the cultural and language differences of most refugees, breach applications resulting in reduced income support payments will become commonplace, and are unnecessarily cruel. The Government is aware of this degree of "punishment" for refugees. It claims these rules commonly apply to Australian citizens, without reference to the existence of a less harsh set of rules, currently before Parliament, that will apply to other Australian welfare recipients who are deemed to be "more deserving."

It is obvious to many commentators that there are simply not enough jobs for everyone who wants one. Professor Quiggin asserted, "recent developments in the labor market provide clear evidence of the failure of the economic policies adopted since the election of the Howard Government."

Ongoing fiscal pressure for balanced budgets and neoliberal economic fundamentalist restructuring continue to exacerbate the unemployment problem, and in the expanded Mutual Obligation environment the number of breach penalties issued has trebled over the past 3 years. The Australian Council of Social Services (ACOSS) produced an interim extrapolated estimate of expected breach numbers for 2000-2001 in Table 1.

Table 1: Government Breach Penalties Issued from 1997 to 2001

Source: Sydney Welfare Rights Center


However, the responsible minister subsequently admitted that the actual number of breaches issued in 2000-2001 was 386,946, even higher than estimated when compared with the total number of 722,000 unemployment benefit recipients in 1999-2000.

When the magnitude of these numbers became clear, several inquiries, both independent and governmental, were launched. This intensely critical focus obliged the responsible minister to admit that breaching "could be too harsh on vulnerable people."

However, immediately following that admission, the Minister announced draconian new rules that allow indefinite and arbitrary suspension payment of benefit to anyone judged to be "at risk" or "likely" to not comply with Activity Test requirements. Such payment suspension is designed to oblige people to come in to face additional scrutiny in tough new face-to-face psychological assessments, to determine if their payment should be reinstated or reduced by a breach penalty.

Breach penalties are part of a compliance control strategy, designed to police compliance with Administrative or Activity Test requirements imposed under Mutual Obligation. There are more than 56 test breach "reasons." The Activity Test program extends to breaches of the requirements of publicly funded, privately owned employment training and placement providers contracted to the Government.

It has been admitted that non-government personnel often do not understand the legalities or consequences of their recommendations to apply breach penalties.

Activity Test penalties reduce payments differentially. Typically the first penalty attracts an 18 per cent reduction in payment for 26 weeks, a total penalty of AUS$863. The second penalty is higher, and the third and following penalties result in no payment at all for eight weeks. ACOSS pointed out that a third Activity breach aggregates to a total "fine" or loss of benefit of AUS$3,384. This amounts to a higher "punishment" than is applied for many Australian criminal offences.

In order to examine the lived experiences of people who had been breached, a small qualitative questionnaire type survey was undertaken in Brisbane. This survey was designed specifically to compare those experiences with the stated policy expectations of the Howard Government.

33 questions were framed to elicit data about breaching experiences and outcomes for individual respondents. The responses gathered from 56 participants are essentially people's accounts of their individual perceptions of what has been happening to them.

Below, the numbers of people breached in the survey are shown from 1999 through to the first four months of 2002, enumerated by gender, age and whether breaches were issued before or after one year of receipt of benefit.

Some response figures stood out:

· 95 percent of respondents (53 people) thought that, when breached, the Government was unfair.
· 93 percent of respondents (52 people) felt their self-esteem had decreased after being breached.
· 91 percent of respondents (51 people) did not realise beforehand, that they were to be breached.
· 21 percent of respondents (12 people) needed to move into less desirable accommodation.

Mutual Obligation's main objective is "to maintain a strong deterrence for failure to meet reasonable requirements." The Howard Government thought that rigorous application of Activity Test requirements would coerce serious engagement in the job market. However Professor Pearce, the ex-Ombudsman who conducted the Independent Review of Breaches and Penalties in the Social Security System, believed that breaching was counter productive, because a "beating up" inducement is wrong. It actually creates disincentives to seek work, contrary to the Government's policy wishes. In this survey 32 out of the 56 respondents felt they could not look any harder for work.

The Howard Government expected that compulsory job search activities would be accepted as "useful" and "reasonable" by recipients of unemployment benefits. However this survey found 73 percent of respondents, 41 out of 56 people, believed that they were not more likely to get paid work because of any compulsory activity undertaken, which would suggest the requirements were viewed as unrealistic and unreasonable. The Government's expectation that one breach would deter people from being breached again was also wrong. Most respondents reported that getting breached was of no help to them in avoiding further breaches. 56 percent were breached more than once and 14 percent had third breaches

The Prime Minister outlined the Government's "fairness" by providing "equality of opportunity" for unemployed people who comply with Mutual Obligation, because compliance improves their "prospects for self-reliance" and self-esteem. However an overwhelming majority (95 percent) believed that the Government was being unfair to them. This survey found that most respondents (91 percent) did not realise beforehand that they were about to be breached, which suggests that customer's rights, due process and procedural fairness were neglected. The Government argues that compliance with Mutual Obligation requirements "leave people with a sense of pride and belonging" with heightened self-esteem. However this survey found most people (93 percent) reported a loss of self-esteem and many felt pressure was put on them to go "off-benefit" permanently.

Another Government policy, typical of neoliberal agendas, is to drive welfare recipients "off-benefit" by forcing them to seek support for their survival elsewhere. This locates responsibility for welfare provision back to community welfare and religious organisations and the recipient's families. In this survey, 23 people indicated that, once breached, they obtained assistance from family, 15 people indicated being helped by charities and seven indicated that their church was of help.

A very serious consequence of being breached for welfare recipients, noted in the literature, is that they often can no longer afford to pay for their accommodation. In this survey, 12 people out of 56 (almost 22 percent) reported needing to move into less desirable accommodation. Three respondents reported moving "onto the streets" with another reporting a "men's homeless shelter."

The Government is aware that many people who are breached become homeless, but it has not altered its breaching policy. One of the three locations where the survey was conducted was in a comparatively lower socioeconomic area. Almost one half of respondents there, six out of 14 people, needed to move into less desirable accommodation. Thus very vulnerable, low-income people are driven into substandard housing.

The Howard Government's expectations for Mutual Obligation policy contrast markedly with the lived experiences of the 56 respondents to this survey, and in many aspects may be considered policy failures. However, the survey findings do not complete the analysis. This study found that people who were breached had their lives seriously affected in other important areas, such as being dealt with unjustly and unethically.

Dr Pamela Kinnear examined Mutual Obligation for The Australia Institute, and found that "the ethical foundations of the Howard Government's Mutual Obligation policies do not stand up to scrutiny."

The Government had unjustly relied on creating joblessness to sustain economic growth and its belief that unemployed people have some control over their joblessness, and therefore a choice about accepting welfare benefits is wrong, given there are still ten job seekers for every one job vacancy. Professor Goodin noted the lack of choice about accepting welfare, and argued that the notion that beneficiaries should agree to sign activity agreements under duress or starve by losing benefit payment was analogous to the highway robber's demand of "your money or your life!" which lacked moral force.

The unethical harshness of the Mutual Obligation regime raises the possibility that the Howard Government's intent is to treat all unemployed welfare recipients of working age in a different manner to other people. For example, the Commonwealth Ombudsman found that the Government was "too quick to breach" and applied breaches "without due process."

As noted, breach penalties often exceed the value of fines imposed for many criminal convictions and 95 percent of respondents to this survey believed that they were treated unfairly. Commentators agree that most people, including people who have disabilities, want to work and actively look for it. External circumstances rather than laziness prevent people from gaining paid employment.

In an international context, commentators argue that the Howard Government's Work for the Dole program is in breach of Article 8(3)(a) of the International Covenant on Civil and Political Rights: "No one shall be required to perform forced or compulsory labor."

Australia has signed and ratified this Covenant. Ironically, also in an international context, the Howard Government's paranoid belief in mythical "welfare dependency" is unfounded. In a seminal 1999 study conducted over 10 years in the United States, the Netherlands and Germany, academics Goodin, Heady, Muffels and Dirven found an "exceedingly small percentage" of people remained on welfare indefinitely, in any of those national welfare systems, and that negative rhetoric about "welfare dependency" in those countries, as in Australia, is unfounded.

The findings of this small survey are consistent with the literature and Australian welfare agency experience. In the current climate of entrenched high unemployment, it is evident that the Howard Government's coercive Mutual Obligation policies have not been successful in delivering the Government's stated intention. The Government reluctantly admits that a minuscule proportion of participants in its compulsory workfare programs find jobs, and many who move "off-benefits" into community and family support are soon obliged to return to welfare support programs again.

This survey found that people who were breached did have their lives seriously affected negatively. Mandatory Activity Test requirements under Mutual Obligation policy did lead to people being unjustly breached, experiencing financial hardship and frustration and having feelings of decreased self-esteem with strong resentments about unfair treatment.

The proportion of people who needed to move into less desirable accommodation or onto the streets is alarming. This accommodation outcome confirms a need for further research into this area and provides evidence that Mutual Obligation breaching practices strike at the most vulnerable, least advantaged group of Australian citizens, and those people surveyed were not registered as having a disability or specific disadvantage, such as refugees might have.

The new welfare groups now being included may be even further disadvantaged than the survey recipients, whose plight presented a different picture of their life circumstances than Prime Minister Howard's rhetoric seeks to conjure. He boastfully proclaims the effectiveness of the Government's "safety net" for protection of people who are "genuinely in need" and deserving of welfare support. The reality is that welfare recipients, dependent on their entitlements, can feel the safety net being pulled from under them.

by Simon Schooneveldt (Queensland University of Technology, Australia)

Selected Further Readings

Burgess, J.; Mitchell, W.F.; O'Brien, D.J., and Watts, M.J. (2000), The Developing Workfare Policy in Australia: a Critical Assessment, The Journal of Socio-Economics, Vol. 29, pp. 173-188.
Goodin, R.E. (2001), False Principles of Welfare Reform, Australian Journal of Social Issues, Vol. 36, No. 3, pp. 189- 205.
Goodin, R.; Heady, B.; Muffels, R., and Dirven, H.-J. (1999), The Real Worlds of Welfare Capitalism, Cambridge University Press: Cambridge, UK.
Howard, Cosmo (2003), The Promise and Performance of Mutual Obligation, in C. Aspalter (ed.), Neoliberalism and the Australian Welfare State, Casa Verde: Hong Kong
Kinnear, Pamela L. (2000), Mutual Obligation: Ethical and Social Implications, discussion paper, The Australia Institute: Canberra.
Kinnear, Pamela L. (2003), The Idea of 'Mutual Obligation' in Australian Social Security Policy, in C. Aspalter (ed.), Neoliberalism and the Australian Welfare State, Casa Verde: Hong Kong