Sky News Beattie and Reith
Can I first of all just ask you a really simple question, and that is, look Australia seems to have got a hell of a lot richer in the last 15-20-30-odd years, if you like, and yet we seem to be spending a hell of a lot more money on welfare.
What is that? What are we going to do about it? Give us a bit of an entr?e to the issues that Australia is facing in the welfare area.
Well I guess there’s two issues there from the Turnbull Government’s point of view; the overall budget, which is about $160 billion is the welfare spend. That’s growing at about six per cent, and very recently of course that had added to it the National Disability Insurance Scheme.
So there is a responsibility to try and keep growth in the welfare budget within reasonable parameters, otherwise when you’re in a budget deficit, as you know Peter, you borrow money to pay for that growth, which means the next generation ends up paying not only for the welfare system of their time, but for the growth in our welfare system today.
So you have to try and keep that overall budget growing at reasonable and sustainable rates.
But also, inside that budget there are large numbers of people in definable and identifiable groups who are just being left behind. So the money flows to them, as it has done for decades, and lives just don’t seem to be improving.
You get these really long stretches of welfare dependence, which very sadly for certain target groups, end up being handed over to the kids in this never-ending cycle of dependency. So you have to look at the budget as a whole, but then you have to try and break it down, which is our new project, to work out how do you help groups inside the system that seem to get stuck and left behind.
It is interesting, because, obviously I don’t know anything about data etc, but it does seem that for the first time you’ve really been able to establish some sort of cohorts that you can look at parts of the problem, and see what you can do with parts of those problems as an entr?e, basically, to further reform.
What sort of people are you looking for, as a start off? I think you’re spending, what, $96 million I think, just as a bit of a trial situation.
And before I get onto that too, I should ask you, they are doing, apparently, quite a lot in New Zealand, and I think that is a really interesting starting point in one way, because if they can be doing it, well we should be looking at it as well.
We’ve borrowed very heavily from the New Zealand experience. And, I think in the observation of our government, they have been very successful in targeting groups with high welfare dependency and moving them out into employment, which is the end goal, and should be the end goal.
But looking at their experience, they have of course some quite substantial differences. So in New Zealand, as you’re aware, the same government that runs the unemployment benefit system also runs the child protection system. So they are able to have greater coordination across different levels of government, but that doesn’t mean there aren’t very significant lessons and learnings that we can draw from.
What we have done, is we have spent, and it has not been an inexpensive exercise, we’ve spent $33 million building an end-to-end data set which allows us to drill down and look at quite small defined groups in the system, and understand what their results will be going forward if nothing changes. We’ve then placed near on $100 million to be made available for groups outside government to come to us with ways to place these people into programs, or target policies at these groups, or new assistance or expenditure inside that envelope of $96 million, and we will use the data set in cooperation with the service provider to measure longitudinally – so over the next several years – on a very clearly defined KPI. Does the person who receives the service of the expenditure or the policy become more self-reliant through more employment? And a win is more employment, and that funding might grow, and that program might be rolled out further, but what we have to do is not keep on funding things that aren’t working.
I think everybody, regardless of their politics, would actually want to see people who are, for example, long-term unemployed, break that cycle. And we know there are communities in Australia where that is seriously an issue.
I had a look at your speech, and some of the data and you’re dealing with one key area which you’ve talked about. When you look at the $160 billion, obviously aged care is a large part, you’ve got families and disabilities all of which cost more than unemployment, I just wondered whether you’re going to follow additional programs using this data to target those areas? Some areas you obviously can’t make changes, like in disability and some of the aged areas, but do you have a strategy to deal with that part of the welfare bill as well?
Well we’ve certainly focused, first Peter, on identifiable groups with very bad long-term direct trajectories. And notably they’re younger groups, so young students, young carers and young parents. It doesn’t mean that the data can’t be used, and we’ve already had a look at some of the groups of slightly older Australians, particularly Australians who come into the welfare system, say NewStart in their 40s or 50s and then find it hard to leave the system. But as you point out there will be groups will not be a priority focus. I mean, the welfare budget of course includes the aged pension, it includes a whole range of people on Disability Support Pension who’s ability to work is very low, so what we are focussing on the young, the capable, the otherwise work-ready Australians that we seem to failing in a policy sense, and where the best prospects are, that if we can assist them early, lifetime trajectory from, say for instance a carers payment to NewStart to the pension, where you’ve got really significant groups who simply never leave the welfare system, if we can target those groups early, have them leave the system, then you have this really capacity to improves lives through employment with all of the dignity, the self-worth, the structure and break intergenerational cycles. So it’s not exclusively for the young, or not exclusively for the groups that we’ve identified, but they are the first point of focus for us.
Of course naturally enough you’ll meet the cynics with the proposal. And, that’s no reason of course to do anything other than, to get on with it basically, which is what you’re doing, which I certainly strongly support.
The trial is called Try, Test and Learn Fund, and I suppose though, some of the cynics are going to say, well hang on, this is just another way of putting together another dole scheme, or some other scheme to get somebody to spend some time in education, and somehow we don’t, we have the right idea, but we don’t seem to get the outcomes at all.
Can you say something, perhaps based on the New Zealand evidence, how different you can make it so that we really can expect and hope for really making the sort of breakthrough that you’re talking about?
Both of you would of seen this like I have in state and federal government, very often the central KPI around a service provision contract to a group that you’re trying to assist is in the satisfaction levels of the people who receive the service. And that is, I guess in part, interesting, but it doesn’t tell you anything about the longer term trajectory, which we now have the capacity to measure around what we think is the best single proxy for an improved life, which is self-reliance through employment.
So the data we’ve amassed looks at all of the categories of welfare, and all of the data we’ve kept on them over the last 15 years, and can allow us to project forward for the entire group in the welfare system, indeed all Australians, but right down to groups of 1500, as to what their likely trajectory will be.
Now the difference Peter is that that allows us to be slightly scientific about it, to have a control sample. So we can take a group, for instance of 1200 unemployment 18-25 year olds in Newcastle, apply a certain program to them and compare them against a relative control sample of a similar group who is in many ways as similar as we can find in Geelong or another place, and look at how they’re trajectory over the next several years develops.
Now if that group, to whom the project/program/expenditure is applied, has a better result than the average or the control sample, that’s a win. And whilst it might sound simple, it’s something that I think both of you would recognise in government, we have not been very good at measuring real outcomes on a year by year basis. This data, and the dataset by providing a predicted standard against which we can measure a victory, that gives us something new.
Previously, if I can be blunt about it, what governments of many stripes have done is said that the more compassionate you are the greater the victory, and compassion is measured on how much more money you spend.
So you’re in this cycle of virtue, where virtue is measured by compassion, which is measured by more money.
But what’s clearly happening is that in clear pockets, money is flowing and absolutely nothing is changing. So you might affect an inequality coefficient on paper for a couple of weeks, but whether or not a recipient of a fund or a program or a welfare payment actually has their life improved is not something we’ve been good previously at measuring.
Well on the politics we had a Medicare scare in the last, recent election – completely false of course, most of the claims. But what’s the sort of timing going to be from you, and are we going to end up with a Medicare version of what you’re proposing because people will want to know how you’re going to manage the politics of it. And have you got any chance of getting ACOSS on side? I did read some material of theirs and I have to say it didn’t look terribly friendly.
ACOSS’ response has been a little bit, somewhere between disappointing and dour I’d have to say. I mean this is new and we are using data in a way we haven’t used it before, and we’re inviting new ideas and it would be great if ACOSS had an idea that could apply for the Try, Test and Learn Fund, which targets a group that they share a concern with us about, but I think the politics can be managed, because we’re not suggesting cuts here. This is an extra $100 million, but what we are suggesting is that you should invest in priority groups early and try and shift a trajectory that we now know through the data, seems at the moment with the way that we’re doing things quite set.
That is about trying to not deal with the welfare system as an overarching budget, but trying to deal with groups of individuals and measure improvements to human lives, which surely has to be at the base of the welfare system, and the essential reason that we have welfare is to improve people’s lives.
So I think that this can be sold, and of course if we start to get results, as has been the case in New Zealand, than those will speak for themselves. But we’ll take applications from the Fund, we think very early next year, after co-designing how applications will work with the sector who will be helping us, and we should be able to measure those things in regular clips – 6, 18, 24 months thereafter – it also is part of the way in which we look at the overall system.
So we have 16 working age payments, which is unbelievably complicated, and inside the system we can identify about 400,000 otherwise capable, working aged Australians who are full of potential, who because of the different payment systems and criteria assessment basis, have no real mutual obligations put upon them to train or be ready, or indeed to search, find and maintain work. Now that can’t be doing that group any favours. So the data will allow us to target individuals, but also come up with better rules and system design to make the system more dynamic and less passive.
Christian, can I ask you two key questions here, that really will determine the effectiveness? I’ve had some experience in this area, which I won’t go through in a previous role, one of the issues you have in terms of unemployment and encouraging people is the fact that there are a significant number of people involved in alcohol abuse and drugs, so how are you going to target that? That’s the first question.
The second thing is providers. I know you mentioned KPI’s, but as we’ve seen in the vocational areas, the quality to this program that you’re doing will depend on how effectively the providers actually do the job that you’re asking of them. So how are you going to make certain that the providers actually roll out the programs you intend?
Look I think you make some very good points around alcohol and around some of the barriers that will exist on an individual by individual basis. I think we’ve come some distance, the Turnbull Government, in improving the contractual basis on which our job service, our Job Active providers, work and that is a significant improvement and we have to constantly look at the relationships there.
So for instance, my department is conducting a thorough growing review of the Disability Employment Services, where the outcomes have been nowhere near as good as we would want. And part of that is the way we’ve structured the contracts historically hasn’t changed very much, and not enough, so we need to look at the way those contracts with service providers work, absolutely.
But Peter, say for instance the three groups we’re targeting. I’ll give two examples – the young carers is a group of about 11,000 people who are being paid to fulfil fulltime care of often what is a family member, these are young Australians under 25. We wouldn’t expect that that group necessarily would show high incidences of difficulties with alcohol because in the relationship between the carer and the caree, it’s the caree who’s facing the challenge, the carer is bought into the welfare system by virtue of the need to provide care.
And yet, for that group we have these incredibly poor long-term results. So 1,800 of those 11,000-odd young carers will literally never leave the welfare system. So something is happening during that period of care which has a start and an end date, and perhaps not unsurprisingly they’re losing their contact with education, employment and training, their social networks, things that help deliver us all into later employment.
So that group will be quite different say from the group of single parents, who may in some instances have some of those individual barriers you’ve mentioned.
I guess the point is, if we tailor the programs to each of these individual cohorts based on what we know about them, and then measure those programs, we have the ability to adapt and change as quickly as possible to expend our effort, energy and resources into what’s working and that’s not a sort of agility that government has displayed really, over the last several decades.
But you’re right, contracts with the service providers always need to be looked at, and you have to always be aware of individual barriers to work.
Can I just ask one other sort of practical question, you’re talking about how you’re managing the programs, or I’m asking about how you manage the programs, do you have some sort of incentive system, whether its government or non-government in the way in which that is managed? Because I think that is a practical question. And can we go further and drill down a bit more into the New Zealand experience, because presumably they’re under way already, ahead of us are they in terms of time and getting things going? So can we see continuing collaboration with New Zealand, maybe adding a bit of extra on the political side as well?
Sure, I’ve been in regular contact with Bill English who is the architect of the New Zealand approach. We’re learning a lot from them. My Assistant Minister Alan Tudge, Human Services, has gone across, he’s just come back. If I survive the next lot of sitting weeks I’ll go across and have a look first hand myself.
So, we absolutely want to learn from the way in which they’ve structured individual service provision contracts with job providers and so-forth. But also, in terms of the overall reward inside of the Try, Test Learn model, where not-for-profit organisations and non-government organisations come to us and target on the identified groups that we want to focus on, the ultimate reward is that if they’re succeeding they’re program is likely to grow and receive further funding for greater and wider rollout.
And of course, there’s also the flipside to that, if people are expending taxpayers money through this fund in a way that we just can’t see measureable results in terms of self-reliance and employment, then they won’t be refunded.
There has been a tendency in government to be almost geological with this, and just add program to program to program, without really being quantitative and having proper analysis as to whether these things are actually working.
We saw that today Peter, with the VET Fee HELP system – when you look at what happens based on those 2012 changes, and you see the raw data about completion rates, and that involves some of the people that we’re trying to help through the Try Test Learn Fund, you have to base decisions on evidence.
I think you’re on an incredibly important task here, and I must say it’s really encouraging to hear a senior Minister getting on with his job and doing what you’re doing and raising the issues, talking to people about how you’re going about it – this is what we expect from good government quite frankly.
So I know it’s got a hell of a long way to go Christian, but you certainly seem to have what it takes, and you’ve had some real good experience in the political world. So I think I can say on behalf of Peter and myself, well done for where you are, appreciating the fact that you’ve got a hell of a long way to go.
I think a lot of Australians, and I really love this idea that we’re trying to help people, that’s what we’re trying to do. It’s not a matter of trying to take money off people or anything else. Trying to get people into a much better situation, and I think you’ve been saying that. You’re not really helping people the way it is.
One thing Peter, I’m absolutely sure of after a year in this job is we cannot go on doing things exactly the same way as we have done for several decades, because we are leaving people behind and that can’t be a good result.
That’s exactly right. Good luck Christian.
Good on you Christian and look forward to seeing you. Thanks so much