November 2014


Much obliged

By Richard Cooke
Much obliged

Joe Hockey. © James Croucher / Newspix

The poor face onerous rules while rich corporations avoid tax with impunity

Australian politicians love the idea of mutual obligation. But the disparities underlying it are becoming more and more extreme. Welfare recipients are painted as getting “something for nothing”, and pushed into more and more restrictive versions of the social contract. Meanwhile, corporate citizens are happy to take subsidies and shirk tax, and can expect little or no punishment if they break the law. Some are trying to excise themselves from society altogether. The government has talked tough about tax and regulation at the G20, while gutting enforcement agencies at the same time. Don’t expect that to change.

“NO PORNOGRAPHY” is what the blue signs used to say, alongside “NO LIQUOR”. To make them more “respectful”, the pornography part was changed two years ago to read “PROHIBITED MATERIAL”. The most important part – the “PRESCRIBED AREA” at the top – stayed the same. There are hundreds of these warnings spread across the Northern Territory, most on the outskirts of indigenous communities, but some placed seemingly at random. Near the town of Emu Bore, there’s one on the lonely road leading to a single family’s property, reminding them again and again of the proscriptions. Outside Yuendumu, the locals have placarded their own counter-suggestion: “IF U WANT PORN GO TO CANBERRA”. These signs don’t just delineate the areas affected by the Northern Territory Emergency Response, better known as the Intervention. They also mark another border: the farthest reach of the idea of mutual obligation.

Like the term “economic rationalism”, “mutual obligation” is a piece of Third Way political nomenclature that Australia has made its own. Both concepts were pioneered by the Hawke–Keating governments, before being fully realised by their successors. By 2000, John Howard could tell a Today Show interviewer that “mutual obligation is an Australian concept” and expect no argument. Politicians and government literature now often refer to the idea as being intuitively comprehensible, a kind of common sense. The principle that welfare recipients are expected to provide something in return for their payments has been normalised, especially if the alternative is “passive” benefits.

A love of mutual obligation unites even bitter adversaries in the political class. Policy engineers from Tony Abbott (“Although most people don’t choose to be on welfare, once they’ve become accustomed to it, it’s easy enough to find reasons why going back to work is too hard”) to Mark Latham (“aid the unemployed by developing their skills and reconnecting them with the benefits of work and active citizenship”) have endorsed it. The Liberals use the language of incentives, and the ALP the language of empowerment, but their end points are not so different. Before the last election, Julia Gillard’s reduction of the single-parent payment was given a familiar rationale. While admitting that the Newstart Allowance was too low, the then prime minister made her priorities clear: “I want to see everybody have the benefits, choices and essential dignity that comes with access to paid work.”

Few other kinds of contracts operate like those implicit in mutual obligation: the terms are not negotiable, duties can increase even as payments decline, and one party must fulfil its duties on pain of poverty and homelessness. Its political appeal causes strange ideological inversions: even dry conservatives suddenly become fans of the statist nudge of behavioural economics. But its most eerie power is to make its adherents, of whatever political stripe, junk all the modern information we’ve accumulated about unemployment in favour of conceptions that are centuries old.

Whether or not paid work has an essential dignity rather than a conferred one is open to argument. As the British journalist Jeffrey Bernard put it, “If there was something romantic about [work], the Duke of Westminster would be digging his own fucking garden, wouldn’t he?” But that argument is over for almost everyone in the Australian political class.

Workers are virtuous, but those on welfare are depicted as dole bludgers, job snobs and disability-pension rorters. This is a picture that has little relationship with reality. Unemployment in Australia is almost always a transient and unwilled state, and workers have little control over it. Most of the jobless have worked in the past, and will work again. The official unemployment figure is around 800,000 (and an even greater number of people, almost a million, are classified as underemployed). Total job vacancies in August this year numbered less than 150,000. All the virtue in the world can’t overcome a disparity like that.

Compared to other countries with our level of development, Australia’s spending on unemployment benefits is already low and well targeted. So is our social-security spending. When the Australian Bureau of Statistics released a compendium of relevant data recently, it showed that regardless of age, household demography, income, wealth, or income source, Australian households in 2011–12 were less dependent on welfare than they were in 2003–04.

There was no revelation here, nothing new. The reality of welfare in Australia has been known for a long time. But in the media, and even at policy level, anecdotes and age-old taboos about shirkers rule.

The template for today’s policy thinking on welfare is so old, it can be pulled almost verbatim from a 200-year-old book. Here it is in Alexis de Tocqueville’s Memoir on Pauperism:

Man, like all socially organized beings, has a natural passion for idleness. There are, however, two incentives to work: the need to live and the desire to improve the conditions of life. Experience has proven that the majority of men can be sufficiently motivated to work only by the first of these incentives. The second is only effective with a small minority. Well, a charitable institution indiscriminately open to all those in need, or a law which gives all the poor a right to public aid, whatever the origin of their poverty, weakens or destroys the first stimulant and leaves only the second intact.

The Liberal backbencher Ewen Jones produced a fresh formulation on this just last month. “Is it better to have someone earning and learning?” he asked. “Or is it better to say to them, ‘There’s your dole, go home, eat Cheezels, get on the Xbox?’”

For the current government, “job snobs” are a modern variation on the idea of “sturdy rogues”, the able-bodied vagrants who resisted work in medieval times. They were contrasted with the genuinely needy “impotent poor”. Despite its information-gathering powers, the government isn’t interested in how many of these largely mythological figures clog Centrelinks around the country.

“There are clearly some job snobs around,” Senator Eric Abetz told Lateline in July. “I’m not going to put a figure on it, but we do need to encourage them, for their own sake, for their own benefit.” The employment minister and others believe the best way to encourage them is through work for the dole, a program that has been shown to be spectacularly ineffective. A study by Melbourne University economists Jeff Borland and Yi-Ping Tseng found the Australian variation actively prevented people from seeking long-term employment, locking them into dead-end positions with limited prospects. Jobseekers in Adelaide have found themselves building dioramas of World War One battlefields for RSL clubs. How they were supposed to market this skill on “graduation” is unclear.

The reality is that the assumptions underpinning work for the dole are not economic, but moral. As former Liberal leader John Hewson told the Saturday Paper, the program “is more about prejudice than it is about policy”.

If you’re a welfare recipient, especially an indigenous one, your obligations are devised to be onerous to the point of humiliation. Recently the Coalition mooted plans to no longer accept “reasonable excuses” for missing an appointment with a job agency. Only “extreme” excuses would do, like a bushfire or the death of an immediate family member. Being mentally ill wasn’t an extreme excuse. Being assaulted was, but only if you were assaulted the day before the interview. “Someone subject to an assault a week before their failure would not have a reasonable excuse,” the Australian reported, as it would not “directly prevent them from meeting their requirement (unless they were still incapacitated as a consequence of the assault)”.

Earlier this year, authorities used armed police in riot gear to remove children deemed at risk from an Aboriginal family. The children were later returned to their parents. The Intervention, a multi-million-dollar, multi-agency effort operating from a framework of new legislation, partly implemented by the military, was put together in just six days. By contrast, simply repairing the water supply of the Aboriginal community of Utopia took more than three months.

The government routinely investigates welfare fraud using powers it originally sought to target terrorism. Centrelink now accesses more personal metadata than any other enforcement agency, more often even than the New South Wales Police Force. It’s a simple procedure: a Centrelink agent fills in a form, gets approval from elsewhere in their department, and is authorised to tap into personal phone records and email history. The subject is not informed.

So far there’s not much evidence welfare fraud is out of control. Between 2006 and 2010, Centrelink conducted an average of 4 million compliance reviews each year, which covered 60% of its “customers”. The yield of cases referred for prosecution was on average 0.04%, or 3192 people. In 2012, fewer than 1500 people were referred for welfare fraud.

The Newstart Allowance, always set well below the poverty line, has now become so low that even groups like the Business Council of Australia say it should be increased. Government has so abandoned the unemployed that even employer groups feel compelled to advocate on their behalf, a situation that may be unique in the developed world. According to the current minister for employment, the ideal environment for a young unemployed person is one in which they apply for 40 jobs per month regardless of how many real vacancies are available, work 25 hours per week on menial tasks, and receive nothing in return for six months in every twelve.

One of the ironies of mutual obligation as it’s now conceived is that the vulnerable receive tough treatment, while the powerful are regarded as delicate, unstable and easily upset.

Humiliating job-seekers is supposed to build their moral character, but even tepid criticism of business might lead to “uncertainty”. Tony Abbott gave his own formulation of this at the Rocklea Markets in Brisbane in 2012, arguing that “government … create[s] the sort of stability and certainty which is necessary for confidence and which, in turn, is necessary for prosperity to grow. Stability breeds confidence. Confidence breeds prosperity.” For individuals, on the other hand, the uncertainty that would come from a six-month period of unemployment with no income was a good thing. It’s this inversion that has allowed the concept of mutual obligation to encompass such glaring disparities.

If employment is a necessary pre-condition of moral citizenship, then employers are not just economic actors, but gateways to social legitimacy. Despite the best efforts of the treasurer, Joe Hockey, the term “job creators” has not made an easy transition from American political rhetoric to ours. But the concept has arrived all the same. Ironically, as global competition makes jobs more contingent and precarious, simply being a for-profit entity has taken on a kind of sanctity among the political class, and a corporation fulfils its social obligations simply by existing – while proper regulation, pursuit over unpaid tax, and even prosecution for criminal acts are painted as threats to the moral order.  That is, if any of these things could “cost jobs”, which they seem always on the verge of doing.

So while the most disadvantaged are being surveilled and constrained like never before, the social contract’s claim on the privileged has rarely been looser.

Multinationals assert their right to government assistance, both direct and indirect, avail themselves of legal systems, infrastructure, political influence and the many other benefits of civil society, and at the same time often assert that they’re not really participants in society at all. In 2009, Apple Sales International’s accounts stated, for example, that “the company is not tax resident in any jurisdiction”. Its average tax rate across all jurisdictions in which it operates is 4%. In Australia, it claims among other things to be a part Bermuda-based, part Singapore-based company selling second-hand Irish electronics. Last year this arrangement let it pay $36.4 million in tax on more than $6 billion in revenues. The then financial services minister, Arthur Sinodinos, “declined to criticise their actions”, according to the Australian.

The American economist and Nobel laureate Joseph Stiglitz is less reserved. There’s an asymmetry, he says, between corporations taking benefits from legislation, subsidy and other government actions, and their willingness to contribute. “That kind of asymmetry is, I would say, understandable, because they’re trying to hide any income. They’re acting on behalf of their shareholders – but, we might say, rob the rest of the society to do it.

“You can see that across the board. Apple in the United States, its very existence almost depends on the internet. Things like the iPhone wouldn’t exist without the internet. And that was created by the government. The company uses American institutional infrastructure, the legal system, the courts – and it doesn’t pay taxes.”

The company now has greater cash reserves than the US government itself. Apple’s huge war chest is the result of an aggressive form of tax minimisation referred to as base erosion and profit shifting (BEPS). There are different kinds of tax architecture that multinationals use to pare down their bills, but perhaps most common is a complex system of profit shifting and reporting known as the “Double Irish Dutch Sandwich” technique. Take Google, for example. The billions the tech company earns from advertising in Australia are paid to a company called Google Ireland Limited, which then pays them to a Dutch subsidiary, which then pays the money back to another Irish company. Google is an Irish company, except when it is in Ireland, where it is a Bermudan company.

“I am very proud of the structure that we set up,” Eric Schmidt, the company’s executive chairman, told Bloomberg. “We did it based on the incentives that the governments offered us to operate … It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”

I asked Google’s operations in Australia about its tax arrangements. They expressed less pride in the “structure”, and went back to a familiar line about jobs.

“For financial year 2013 we paid $7.1 million in corporate taxes and $15 million in payroll and other taxes in Australia as part of our investment in a local workforce of over 900 people,” their statement read. “We believe international forums like the OECD are the right place to decide tax rules for multinational businesses because everyone would benefit from a simpler and more transparent system.”

It must be pointed out that if employing people were a legitimate excuse to avoid paying company tax, there would be no such thing as company tax. In Australia, the community has agreed that companies should pay tax, and the rate is set at 30% of profits.

Google also noted, with some justification, that while technology corporations inspire most of the excitement around base erosion, profit shifting and transfer pricing, there are plenty of companies in Australia that pay even less tax than they do. Old-school companies in industry and finance are some of the worst offenders.

According to a Tax Justice Network report, a third of ASX200 companies pay less than 10% tax, while 57% operate subsidiaries in tax havens. Not only does Australia miss out on an estimated $8 billion in annual revenue because of these fudges, but many of those taking the most tight-fisted approach are only too happy to unclench a palm when a government handout is available.

Take James Hardie, still making a strong claim to being one of the worst companies in the world. It has deliberately underfunded a compensation fund for asbestos victims that it was forced by the government to set up (its directors were given minuscule fines as a result). Now the fund is unable to meet its liabilities and will have to draw on a government loan facility to make payments to the dying. James Hardie is now arguing that the payments should be made in instalments. In the past two years, it has paid out $600 million in dividends to its shareholders. In the past ten years, the company has paid an average of $0 in corporate tax. In 2012, it won a tax case against the government, which now owed it $300 million.

Andrew “Twiggy” Forrest is the chairman of Fortescue Metals, and the man whose welfare review for the federal government called for “an end to paternalism” while expanding welfare quarantining. In 2011, Fortescue Metals admitted it had never paid corporate tax. “We have not cut a corporate tax cheque to date, no,” was a spokesman’s elegant formulation.

I asked Forrest about his conception of mutual obligation. Even he seemed surprised by how much emphasis the media had placed on the punitive aspects of his report.

“I don’t look at mutual obligation [as] trying to get value for money out of welfare, that is not my purpose … When it comes to welfare, it’s an opportunity for someone to upskill and to become a more valuable member of their community, a more contributing member of their family. There’s an opportunity to grow from that experience.”

I asked him about how people on welfare might come to view their role in the social contract, when they saw highly publicised stories about companies taking research and development tax credits while paying almost no tax. Wasn’t that also a kind of “something for nothing”?

“That’s a hard one, which I’d probably ask Ministers Hockey and Turnbull to turn their minds to. I would suggest that if the Australian government is trying to encourage research, then those companies who do the research have every right to claim it. But if it then leads to artifices which are beyond the spirit of the law, then, yes, I think those companies should be looked at with serious rigour.”

That is happening, at the G20. Google’s dream that these issues be looked at an OECD level has come true. Joe Hockey has been triumphant. “We are determined to improve the integrity of the global tax system by addressing the erosion of our collective tax base through work undertaken by the OECD,” he said, while announcing a Common Reporting Standard for the automatic exchange of financial information. The Australian Tax Office (ATO) itself would be leading one of these new collaborative investigations. Australia would be at the forefront of a new co-operative age of tax collection and transparency, and the twilight of BEPS.

But inside the ATO itself there is a very different impression. The government might be talking tough on tax collection, but its enforcement is weak and getting weaker. When he was still shadow treasurer, Joe Hockey’s main criticism of the ATO was not that it was ineffectual in its collection duties, but that it was “overly aggressive”. It had an “insular and inward-looking culture that has put it at odds with taxpayers”.

“Taxpayers are not the enemy,” he told the National Press Club. “They should be respected.” He mooted a possible break-up of the ATO’s functions, and upon taking government, announced plans to hasten layoffs of 4700 staff over four years. Strangely, for a government that was to renew focus on transfer pricing, the specialist team within the ATO taking aim at multinational tax evasion was disbanded.

The staff cuts were said to be part of Hockey’s deficit-reduction treatment, though that explanation is baffling. Cutting funds to the tax collection arm of government may be the single most inefficient form of austerity there is – each dollar spent on enforcement brings in around six in additional revenue.

So if the rationale isn’t economic, what could it be? “They’re trying,” says Stiglitz, “to give a free ride to rich people.”

The government’s sabotage of its own efforts to go after multinationals caused the normally staid ATO to start leaking in earnest. Senior staff, or former senior staff, describe a transitory, junior bureaucratic culture, where the emphasis is on short, relatively simple investigations, preferably cases that can be cleared in 90 days or less. Often the crudest tactic in company tax avoidance is the most effective: time-wasting.

“There was also an absurd clear-out of senior transfer-pricing staff about two years ago, so there is very little likelihood of the ATO ‘manning-up’ on multinationals any time soon,” an anonymous former tax official told the Fairfax business reporter Michael West. “The best chance of that happening is if the revenue collapses and the government asks the commissioner to explain how that happened.”

To make matters worse, the nation’s big accountancy firms have skimmed off the best of the ATO’s former staff, turning them from gamekeepers into poachers. Armed with intimate knowledge of the inner workings of the ATO, their clients have become more adept at disguising their moves.

It’s not just compliance and enforcement that’s the issue. In practice, the government has offered no policy response to reduce corporate tax avoidance. Despite Hockey’s belligerent talk about tackling the problem, the government has no legislative agenda to rein in tax avoidance, other than to water down measures introduced by the previous government. Having opposed the Senate inquiry into corporate tax avoidance, Hockey seems to be pinning his hopes on brokering a unanimous, comprehensive and enforceable agreement at the G20.

The ATO is not totally toothless, though. In July it used a combination of big data techniques and coercive powers to commence a new hunt for tax evaders. “This data matching program will assist the ATO to identify taxpayers that may be operating outside the taxation and superannuation systems,” said ATO Assistant Commissioner Darryl Richardson.

He was talking about the Music Industry Royalty Payments Data Matching Program. The taxpayers “outside the system” were musicians.

Joe Hockey has earnt a reputation as being sympathetic to high finance. “Around the big banks and financial services industry – they love him,” the writer Joe Aston told the treasurer’s biographer. Hockey’s legacy of a tax-enforcement regime that’s both more enervated and collegial looks like it will cement that loving relationship.

The chasm between how the government treats the most powerful and the rest of us does not apply only to tax affairs. Consider the record of the Australian Securities and Investments Commission (ASIC), Australia’s chief corporate regulator. Like other Western enforcement agencies, its response to the global financial crisis was to do almost nothing. In the five-year period up to February 2014, it prosecuted just 32 insider-trading cases. It boasts failed or non-existent prosecutions in some of the biggest episodes of fraud and collapse in Australian corporate history, among them Securency, Banksia Securities, LM Investment Management, Storm Financial, RAMS and the AWB scandal.

Most recently, it refused to press charges against former Trio Capital executive Jack Flader, claiming it would be “irresponsible”. Flader is the mastermind of the largest superannuation fraud in Australian history; Trio collapsed in 2009, with executives stealing at least $180 million. Government paid the jilted investors $54 million in compensation. It took ASIC three years to interview Flader, leading the Sydney Morning Herald to describe him as a “poster boy for regulator indifference”.

Even in the mundane paperwork it oversees, ASIC itself concludes there is an “unacceptably high level of non-compliance with the financial reporting obligations by administrators of insolvent public companies”. Gina Rinehart’s Hancock Prospecting failed to lodge its annual financial reports on time for seven years. Not only were “reasonable excuses” acceptable, no excuses were necessary. With that kind of attitude to filing forms, Rinehart could find herself in trouble if she’s ever unemployed.

Budget cuts to ASIC are unlikely to improve this situation: 12% in 2014 alone, $120 million in the next five years. Almost 200 of its barely 1800 staff will be laid off. Again the excuse was budgetary, but the animus was openly ideological. In May, the parliamentary secretary to the treasurer, Steven Ciobo, told a post-budget breakfast that “the government thinks that there is scope for the financial services industry, and for all the other industries, to self-regulate more … There will always be (as a general statement of principle) our preference for self-regulation over the need to have a regulator [that is] taxpayer funded.” In response, ASIC admitted that it might be unable to perform its most basic consumer protection functions.

Chairman Greg Medcraft has made some disquieting comments. In 2013, he told a forum that experience has taught him “disclosure doesn’t work, in many cases”, that auditing often does more to hide corruption than expose it, and that “we can’t have cops on every street corner”. More recently, he said that Australia is a “paradise” for white-collar crime and that penalties are “not strong enough, not tough enough”. In June this year, a Senate inquiry concluded that, even accounting for ASIC’s limited powers and resources, “it appears to miss or ignore clear and persistent early warning signs of corporate wrongdoing or troubling”.

Hence, presumably, the new emphasis on self-regulation. It’s a philosophy that works in many ways, and has long been supported within ASIC. For instance, a secretive secondment program brings external corporate lawyers into the bosom of ASIC’s operations. James Wheeldon, a whistleblower who worked with the regulator on fee disclosure before he left in 2005, describes the process as “tainted by corruption”. Not only was his advice routinely ignored in favour of the interests of big banks and super funds, but he was also asked to take instruction from a lawyer on secondment from the fund manager MLC. The lawyer was helping to prepare ASIC’s response to a lobbying submission from MLC. He had helped to draft the original submission, and was now writing part of his own reply.

Nothing symbolises ASIC’s comical misallocation of resources better than the way it now conducts raids. Usually it doesn’t conduct them at all, and the most high-profile bust of 2013 wasn’t on a house or an office, or even a building. It was a tent, the abode of activist Jonathan Moylan, who sent out a hoax press release, ostensibly from ANZ, as part of an environmental campaign against Whitehaven coal. Investigators raided his campsite, seized his computer and phone, and quickly put together a criminal prosecution.

Compare that to what happened during the Commonwealth Bank’s financial planning scandal, where predatory advisers scammed an unknown number of customers out of millions of dollars. ASIC was handed evidence of widespread criminality by internal sources – it responded with a year of paralysis. Then, instead of prosecution or investigation, it reached a “settlement” with the bank, a compensation package that amounted to a fraction of the amount taken. The CBA apologised for its “defensiveness” on the issue, which included having consumer advocates tailed by private security firms, inducing the defrauded not to do media interviews, promoting advisers (including the infamous Don Nguyen) who had forged signatures, and giving huge bonuses to the executives who oversaw the toxic divisions. It claimed a “small number” of customers had been given “poor advice”. This number was later revised to a possible 400,000.

After all this, ASIC praised the CBA for its “co-operative and consultative approach”. The CBA explained that it had promoted Nguyen in 2008 so he would be “subject to higher levels of supervision”.

It’s this kind of behaviour that shows the illusory nature of the social contract that mutual obligation is supposed to be based on. The CBA isn’t exactly a rugged free-marketeer. Deemed too big to fail, it benefits from an effective subsidy estimated to be as much as $4.5 billion a year. The government rushed to guarantee the bank’s loans during the financial crisis, and funnels billions in compulsory superannuation its way every year. The minimum expectation in return is that it avoids rampant fraud. It can’t, and even the expectation that this criminality might be punished looks pathetically naive.

“I want a regulator that is feared, not a wimpy group of bureaucrats,” said Nationals Senator John Williams, a key figure in the Senate inquiry into ASIC’s failings, and almost alone in the Coalition in making such criticisms. More representative of his party-mates is Senator David Bushby, chair of the Coalition Economics Committee. Bushby absented himself from Senate hearings where the victims of CBA scams gave evidence. He then produced the sole dissenting report from the inquiry, which otherwise called for a royal commission. Part of his reasoning was emotional. A commission “could protract the emotional strains on victims of malpractice over a longer time period, without the advantage of offering additional remedies beyond those that are already being worked through”. Unwilling to listen to the victims, he was happy to speak on their behalf.

Bushby also stressed the importance of waiting for the outcome of the banking inquiry headed by David Murray, while also suggesting that the banks had learnt their lesson. This dissent, six pages in a 547-page report, was taken up by both Tony Abbott and the finance minister, Mathias Cormann.  

The truth is that the banks have learnt their lesson: they know that the people supposed to hold them to account will believe almost anything they say. No matter how many times regulators, judges, politicians or even sections of the media encounter fraud and wrongdoing, it seems a fresh shock every time.

After evidence of endemic fraud, ASIC still trusted the CBA to run the compensation program itself with no oversight, and was so credulous about the CBA’s claims that it cribbed material from the bank for its own submission to the Senate inquiry. Full of lies, it had to be pulled and amended. 

“I think it is fair to say that the level of trust and confidence was misplaced by us,” said the ASIC chairman.

The response from the financial industry itself was robustly frank.

“No shit,” wrote John Addis, the director of Intelligent Investor Share Advisor.

Limiting the ban on one of Australia’s most disgraced businessmen to seven years, Administrative Appeals Tribunal member Geri Ettinger said: “I am mindful that there is no allegation that Mr Nguyen engaged in dishonest conduct.” His document-forging was never mentioned. 

“The CFP [Commonwealth Financial Planning] outcome reverberated around the financial advice industry,” said Greg Medcraft, as he gravely delivered a slap on the wrist, “and sent a very clear message that ASIC is deadly serious about lifting standards.” The only reverberation was from laughter.

Another Senate inquiry, pushed by the Greens and lacking the support of the government, will examine large-scale tax evasion. There will be well-meaning declarations made at G20. But within the ATO, few expect significant changes. Now the emphasis isn’t on enforcement but “settlement”, avoiding litigation in secret. Not threatening any jobs. More like an agreement among friends.

That suits the government. You might call it a “general statement of principle”. Besides, their attention is elsewhere. is running stories on scam welfare recipients again. Under the headline, ‘It’s so easy to fudge a bludge: Online guides used to con doctors into giving out disability support pensions’, the yarn outlines how web forum users share information about how to maintain benefits.

On the web forums themselves, most people are trying to figure out how to get by. “If you do a bit of volunteer work, a bit of study, do some part-time work, you cut your own throat,” wrote one “con artist”. That’s apparently one of the more common kinds of scam among the disabled – trying to work.

Richard Cooke

Richard Cooke is The Monthlys contributing editor. 


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