Welfare system – ABC Newsradio
E&OE
SANDY ALOISI:
Well, as we’ve heard, the Federal Government is flagging a crackdown on welfare payments with the Social Services Minister, Kevin Andrews, warning that the current system is not sustainable. A new report to the Government by the Department of Human Services states that one in five Australians, more than five million people, now receive income support payments. For more on moves to reduce that number, Marius Benson is speaking to the Minister, Kevin Andrews.
MARIUS BENSON:
Kevin Andrews, the numbers being reported on welfare today are that $70 billion a year is being spent and that one in five Australians is dependent on some sort of income supplement. Are they the numbers being given to you?
KEVIN ANDREWS:
The numbers from the department, of a ten year review by the Department of Human Services show that more than five million people now are in receipt of one form of welfare or another.
MARIUS BENSON:
And do you believe that’s unsustainable?
KEVIN ANDREWS:
Well, what I believe is that we must have, in a critical way, a safety net for people who can’t care for themselves, the people who can’t get a job, are in necessitous circumstances, but at the same time we have to ensure that over time in the long term the welfare system remains sustainable.
MARIUS BENSON:
Is there evidence that people are now receiving welfare who might otherwise be independent of welfare and should be independent of welfare?
KEVIN ANDREWS:
Our view is that the best form of welfare is work. If people are capable of work and if work’s available, then we want to encourage as many Australians as possible to work. That’s why we’re putting in place measures such as payments for those who go off welfare and get a job for 12 months, to get an extra $2500 if they’re under 30. If they stay in a job for two years, they get an extra $4000 and even more if they’ve got a family. That’s why we’re providing measures whereby if you move from, say, a metropolitan area to a regional area to get a job, then there’ll be an extra payment. That’s why we’re also providing for employers who take on older employees who have been on welfare for over $3000 if they remain in that job for six months or more.
MARIUS BENSON:
Do you believe you can make a significant difference to the number of people dependent on welfare and the amount being spent each on welfare, or are you just tinkering at the edges?
KEVIN ANDREWS:
Look, it’s critical that we continue to review that. We made some very significant changes back in 2005 in relation to parenting payments and also in relation to the disability support pension. These are things which are sensible to review again and that’s why I’ve asked Patrick McClure, who headed up a previous review for the government to look at this again.
MARIUS BENSON:
But again, can you make significant differences do you believe, or are you just tinkering?
KEVIN ANDREWS:
Well, that’ll depend on what Mr McClure reports to the Government. He’ll look at it again in light of what he recommended back 10 years or so ago and what’s happened since then and we’ll have a good look at what his recommendations are.
MARIUS BENSON:
It’s been reported you’re looking at a plan for one universal welfare payment with top ups as some sort of rationalisation of the multitude of payments now. Does that appeal to you?
KEVIN ANDREWS:
Look, we’ve got no immediate plans to do that, but one of the difficulties in the system is that the payments such as Newstart, the unemployment benefit is indexed at a different rate to what the pensions like the disability pension is, and that provides, in some instances at least, a perverse incentive for people to want to get onto the disability support pension. Now, those sorts of things have been growing over time. The gap between the two payments is becoming larger and larger each year and that’s something which any government that’s prudent about these things and sensible will at least have a look at.
MARIUS BENSON:
Is the bottom line that welfare – the annual welfare bill has to be cut?
KEVIN ANDREWS:
This is not so much about what we do immediately, it’s about the sustainability of the system in the future. I believe that we should have a welfare system, I believe that we should look after people who need to be looked after, and that’s the mark of any civilised government, but at the same time we have to make sure, particularly in the context of an ageing population that this is sustainable over the medium to long term.
MARIUS BENSON:
A question being asked by some of your critics is if you’re trying to cut the numbers of people relying on government handouts, why are you increasing the number of people in that situation by introducing the paid parental leave scheme which directs money to people on up to $150,000 a year?
KEVIN ANDREWS:
Well, the paid parental leave scheme is actually a work related payment. This, again, is in the context of the ageing of the population. We have a very significant shrinkage in the growth of the workforce in Australia. We have a very significant increase in the number of dependents, particularly aged dependents, and that will increase over the next 10 to 15 years. So the question for Australia is how do we do two things; how do we have enough workers who are going to be able to provide particularly for a growing dependent group in the future, and secondly, how do we still have a birth rate which is going to be sustainable in terms of our population? Because birth rates alone or population growth alone worth probably a quarter to one third of economic growth.
MARIUS BENSON:
But the paid parental leave does come from the taxpayer. It does increase the overall welfare bill.
KEVIN ANDREWS:
Well, not every payment from the taxpayer should be appropriately regarded as welfare. If it’s a measure which ensures two things, one is we continue to grow our population, and secondly, we continue to have enough workers in the workforce, and that’s very much an economic matter related to the future economic growth of the country.
MARIUS BENSON:
Kevin Andrews, thank you very much.
KEVIN ANDREWS:
My pleasure.
SANDY ALOISI:
That’s Social Service Minister, Kevin Andrews, speaking there to Marius Benson.