Centrelink uses intimidation to impose the government’s will

By a Centrelink victim

There is no let up on Centrelink’s attacks on the innocent. On 18 January, the story of the suicide of Rhys Cauzzo broke. It was first published by The Saturday Paper. The Pen also published the story.

Centerelink’s response was that Rhys’s debt had not been made by the robo-debt system, but raised manually, as if this makes it all right, and that a $27,603.39 debt had been turned over to Dunn and Bradstreet to chase up.

Centrelink had alleged that Rhys had been overpaid. On 2 March, minister Alan Tudge’s office issued a media release implying Rhys had lied to Centrelink and justified the public disclosure of private matters in this context. The issues were not whether some debt was due, but the size of it and the handling of  the case, especially when Centrelink was aware that Rhys has mental health issues that were likely to be aggravated by heavy handed action.

“Where a person makes a false public statement about their dealings with the Department of Human Services, whether through the media or otherwise,” it said, “social security law and family assistance law enables the Department to disclose customer information to the extent that it is necessary to correct factual inaccuracies or potentially misleading information.”

No evidence a false statement has ever been produced.

A week later, private information about blogger journalist Andie Fox was given to Fairfax journalist Paul Malone.

These are the two best known cases. Many others have been pressured in some way too and continue to be so.

Andie’s case caused a furor. But it succeeded in delivering the message that if  you stand up, Centrelink will punish you, with the backing of the department, minister and ultimately the government.

The immediate likely purpose is to silence victims into not talking to the Senate inquiry, where it is already clear that advocacy groups find themselves compelled to speak for victims who are too scared to come out openly. The bullying is also aimed past this, to make it the standard to protect the government’s and Centrelink’s own interests and policy, regardless of morality, the harm it might cause, and arguably, in breach of the law. So far it has done so with impunity and is only being held back temporarily by the strength of public opinion and scrutiny from the Senate.

The deliberate use of intimidation by government is a threat not only to the rights of those on Centrelink payments. It threatens everyone and this is a good enough reason to resist.

The brutality of the Centrelink crackdown, its inaccuracy and dogged persistence to continue in the same way has caused growing public disquiet. Sympathy for the plight of Centrelink recipients has with it and the government has branded itself as heartless. Polls showing that more than half of Australians feel that more should be spent on social security provides evidence of this.

Mishandling of the Centrelink robo-debt issue and other Centrelink controversies is a major contributor to turning the government on the road towards being the most hated in Australian history.

It is not wages but other factors are driving up business costs

 By Joe Montero
Wages are not a major cause of rising business costs. This is a bold statement in the face of all the rhetoric claiming the opposite to be true. This does not make it less true.

One qualification must be made. Wages do figure highly in small business. But this diminishes as the size of the operation increases. What follows concerns big business. The focus is important because big business is the most decisive part of the Australian economy.

Note that this is not an exhaustive examination, but a brief sketch of what goes on.

Looking back over history shows that real wages tend around what it costs to raise an average family. This constant, was recognised by the landmark Harvester case in 1907, and regardless of whether it admitted or not, the truth of it shown  the need of the average household to use all of its income to maintain its accustomed position.  If real labour costs remain relatively constant, they are not likely to be the cause of rising real costs over the economy as a whole.

From time to time there is some departure from this rule, depending on the relative strength of the unions and employers and the short-term labour demand and supply factors. But over time, the norm asserts itself.

From the view-point of a business, operations are based on the overall costs of production. This does involve labour costs. It also contains the costs of providing the premises and equipment and materials needed to operate the business, plus taxes and other impositions placed by society. Only the first two are going to be considered here, because they are the most important.

Labour differs from the others in that the bigger the volume, in terms of units over a specified time period, the less the labour cost in each.  Put another way. If one wage produces 1 unit in an hour is made and if this is changed to produce 10 in the same hour, the cost of labour has dropped to one tenth of what it was. It is the reason why the cost of labour is called variable capital.

Conversely, the cost of the premises and the equipment (other less important inputs are left out for ease of explanation) used, cannot be spread out over a larger volume in the same way. The cost remains the same for each unit, regardless of the quantity. This is why economists call this fixed or constant capital, depending on the school of thought. Increasing the volume of business increases the cost of this capital proportionally.

Fixed or constant capital has another property that differentiates it from variable capital. Investment in variable capital can be changed easily. The other capital cannot. The premises and equipment used come in precise units and at a certain point reach full capacity. Shifting to a new place to do business, redesigning it, or buying a new machine is expensive. Further expansion requires major new investment, which adds considerably to the costs of running the business. Times of rapid technological change add further to this problem.

The pressure to contain costs is the major driver for business expansion. More so, when the market is tight, because it is the smaller players that are most likely to fall off the perch. It is this that pushes forward the imperative for increased productivity. Increased productivity simply means spreading a given quantity of labour used over more units.

In an economy that is in truth shrinking and business opportunities with it, the tendency is to exploit labour to cover the rising cost of fixed or constant capital. Hence the drive to remake the labour market through the creation of flexible casualised work, cut wages growth and attack penalty rates. The real wage is falling  in the present period. The degree to which this falls below the natural rate, marks the extent of a falling standard of living.

While some individual businesses may gain from this, in the aggregate it is another story. Putting wages below their natural real level contracts the economy further. This will translate into fewer business opportunities and a fall in the aggregate rate of profit. How this occurs is another story.

The final word is that rising costs is what is driving the call for assistance through less tax on business.


















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Pensioners to be target of welfare card cut

 By an age pensioner

A leaked federal government document shows the government’s intention to take concession cards from pensioners and it will cost an individual up to $49.10 per fortnight.

All welfare payments under $20.02 will be scrapped.  Retirees who do not qualify for the full pension because of superannuation or assets, but receive the nominal amount, will not qualify for the health care card.

For retires, the cost of health, including prescription drugs can be formidable. These pensioners will also lose the pension rate car registration, license and council rates etc. Most of these people are not wealthy. Many have already had their pension cut via the recent change to the assets test and are in financial stress.

Some people on disability support and carers also face the loss.

Australian Council of Social Services (ACOSS) chief executive Dr Cassandra Goldie warned the government against welfare changes, saying Australia already has one of the most targeted systems of ­income support.

“Once again, this kind of proposal targets people on low and modest incomes to make savings,” Dr Goldie said.

It is extraordinary that as the exposure of the treatment of welfare recipients through Centrelink continues to unfold, the Turnbull government is going for yet another measure to raise funds from some of the most vulnerable Australians. The government chooses to ignore the  evident public concern.

The suggestion that this is necessary to control the budget, convinces almost no-one. It is common knowledge that this comes at a time when the same government, refuses to act on corporate tax evasion and siphoning off funds to tax free havens. Practices that put a bigger hole into government finances that is saved by welfare cuts.

A good part of the reason for the demise of former treasurer Joe Hockey and why Turnbull replaced Tony Abbott as prime minister, was that they sighted the same target. Malcolm Turnbull promised then that his would be a more caring government.

There are a lot of Australian who feel let down by the betrayal of this promise.

Official site of the May Day Committee (Malbourne)