Sky News Sunday Agenda with Peter Van Onselen
Subjects: GST Distribution; Priority Investment Approach to Welfare
PETER VAN ONSELEN:
We are joined now by the Social Services Minister, Christian Porter, live from WA.
Thanks so much for your company.
Good Morning Peter.
PETER VAN ONSELEN:
Appreciate you being there at what is an early hour in WA obviously, but we’ve snuck in just ahead of daylight saving. So it makes it at least one hour easier.
Thank you so much.
PETER VAN ONSELEN:
This is all about welfare reform for the bulk of this interview, but let me just ask you about this story that we’ve reported on here at Sky News throughout the morning about an appearance of saying one thing to West Australians from the Prime Minister, versus another to Eric Abetz the Tasmanian Senator, when writing to him. There are reports that the Prime Minister has confirmed that it will be some years, at least, before any change to GST distribution would come into effect. That’s what he’s apparently written to a letter from Eric Abetz; yet a month ago he was over in WA telling your state conference that there was some imminent change likely on the distribution front. What’s going on?
Well I was there at the state conference when the PM made the announcement, and it was a most welcome announcement. But he didn’t put any timeframe on it. In fact, almost immediately after that announcement I gave some comments to a variety of news outlets noting that, in my observation, it would be likely 19/20 that you’d work towards as a target date.
But again, the Prime Minister put no timeframe on it. But what he announced, in effect, was a policy where you would have a floor put in place, but you would follow up the changing relativities. And for WA those changing relativities moving upwards are going to take some time.
So I must say I think this is a bit of a non-story. I don’t see any inconsistency in it at all. And the reason why the proposition’s been put by the Prime Minister to follow up the relativities as they improve and put a floor under them at the appropriate time, the reason’s that’s been offered is because that means that no state loses out in the out years of its budget cycle, no state would lose a dollar. But in the long run, all states get protected from a situation we’ve seen develop, where if you do have strong economic growth you can suffer very big losses in GST. So I don’t see any inconsistency.
PETER VAN ONSELEN:
Well probably the bigger issue actually is that a letter between one Prime Minister and one former Senate Leader, who was dumped to the backbench, Eric Abetz, how does something like that leak without it coming from one of the two parties?
Well, I don’t know. But the Prime Ministers correspond with more people than you can imagine. So look, I couldn’t comment on that.
But again, the content of the letter I have not seen. But the proposition that there’s some inconsistency between what’s been reported and what was said at the state conference, I can’t accept that. There was never a timeframe put on this, it’s about following up relativities as they improve, and that’s simply going to take a little bit of time.
Minister, what’s your response to the reaction you got during the course of the week, to the new investment orientated approach towards welfare that you outlined at the start of the week?
Largely, I must say Paul, the response has been positive.
There have been some people who have put alternative views. For those who wouldn’t want to see any change, and there’ll always be those people inside a complicated system like the Australian welfare system. I think their fundamental critique was that the numbers are very long-run numbers, so therefore are designed to have a quite confronting effect on people, and I don’t disagree with that, they are numbers that cumulate small groups inside the system who are suffering from welfare dependency and extrapolate those out over a course of 70 years. So they’re estimates and they do give rise to big figures. But I think that all that goes to show is that you will have very large liabilities, but also ruined lives in effect over long stretches of time unless you can focus on these target groups that we’ve identified.
As I put in the National Press Club, this is first and foremost about acknowledging that the way in which we’re transmitting welfare dollars to certain groups inside the system is doing absolutely nothing to build better lives for those people. And in fact, seems to be an administration of money which is flowing in a way where lives don’t improve, long term welfare is the result, and most terribly of all, that the welfare dependency, in very high statistical effect gets passed down onto the next generation of children.
These are just things that we should target – so not everyone loves the idea of change inside the system. But if we don’t change we’re going to get the same results, and they are very grim in a range of key areas.
How long do you think it will take before we can see some tangible change?
The Try Test Learn Fund that we’ve established, which is this $96 million pool of funds, where we will in effect receive applications from outside government as to how to target these three groups; young carers, young students and young parents under 18.
Those applications, I would expect to see starting to flow in December, and we’d make decisions on the successful applicants in January and February of next year, and then we start delivering the program shortly afterwards.
We would measuring it sort of, six monthly, twelve monthly and eight monthly clips. So I think that we can, at least on that side of this coin, get moving quite quickly.
But of course it’s not merely about this fund, and about getting non-government sector applications in as to how we deliver services better to our target groups. I mean, government itself, myself as the Minister, but across government, we can use this data to look at the rules, the responsibilities, the systems, the processes we have in place, and track those and change those in a way that we can measure the outcomes.
Paul, if I give you the one example, I think which is pertinent, is that we have 400,000 students that we pay $3.3 billion to study – they’re the cash payments to study, that’s not the public subsidy to education. And yet this data is showing us that at any given point over the next 60 years, 30 per cent of that group of 400,000 students will be inside the welfare system in that year, drawing welfare.
I find that an amazing and really unhappy result. You would expect that’s a group that would do a lot better. Now what we will do with that data is cross-reference it with education and other departments to work out what it is that helps people succeed, what it is that seems to be causes of failure, and trying to mend those through looking at system design and rule design.
I want to ask you this point directly. What you’ve argued off the back of the data is that the system at the moment is simply not working for a lot of people, that they are trapped in this welfare arrangement. What is the expectation you have from the welfare lobby itself, from organisations such as ACOSS? Do you expect them to respond constructively to this argument, and do you feel there’s a responsibility on them, including a moral responsibility to respond directly to this proposition?
I want them to be at least open-minded and to hear us out, and to thoroughly investigate the data.
One of the facts about the data system that we’ve put in place – and we spent $33 million through external consultants and experts to build a data system that for the first time ever gives us an accurate picture of the welfare system – and that data system will be an open data system. So preferred and registered users can come on, they can do the things that we will be using the data for, which is to identify groups, unpack and unlock some of the secrets inside the welfare system.
ACOSS, or any other group, academics, not-for-profits, anyone will be able to do that with registered user status, which is a very powerful tool.
So we are inviting them on this journey with us, to try and assist us, and I just expect them to be open-minded. I wouldn’t say that, necessarily inside the stakeholder and lobby group that everyone’s been enormously enthusiastic, but at least they’ve not dismissed it out of hand.
A point was made during the week, I think by my opposite number, Jenny Macklin, that we’re misconstruing the point of the welfare system. And she put that the point of the welfare system is to keep people out of poverty. Well, that’s not the entire point of the welfare system. In large part, the welfare system is about allocating assistance, a helping hand to make people’s lives better over time. To target them when they’re most in need, but don’t let that targeting become a draw into a system that locks them in, in some cases for life. So that’s what we’re trying to avoid.
PETER VAN ONSELEN:
On that, do you acknowledge that this is a bit of a ‘Mea Culpa’ by the Government, given that there was a slashing of programs in the 2014 Budget, which were designed to do exactly what you’re talking about – programs that would drive youth towards education and training for example, those sorts of programs were slashed. This looks like its dealing with putting more money into those sort of programs for the exact purpose that you’re talking about.
One of the difficulties that has arisen over decades is that we use the word program, as if we mean panacea, and yet we haven’t been measuring what the outcomes of programs are.
So for the first time, this Government, has done the really difficult, and quite expensive work, of putting a data set together that will let us evaluate programs for how they transition people out of the welfare system into a status of employment and self-reliance.
PETER VAN ONSELEN:
But just on that Minister, so one of them, Youth Connections, was slashed in the 2014 Budget. It has now had its funding reinstated, and it’s been retitled Youth Connect. I mean that’s a classic example isn’t it, where a decision was made by a previous Minister to slash funding to something without having first looked into whether it was performing a useful purpose or not.
You’ve now done the data search and it obviously is because the money’s been reinvested.
Well, those sorts of programs are the sort of programs that we will absolutely be measuring. For instance we spent millions of dollars on what’s known as a Carers Bursary Program, where the design is that it’s meant to try and transition carers, particularly young carers, into education so that their employment prospects are better.
But what I would say is that words like slash or cut – my budget is $160 billion, that’s the welfare budget. It is growing at a very high pace every year. So when we hear language like slash or cut, that gives people the impression that somehow the overall welfare budget is decreasing from one year to the next. The exact opposite is true…
PETER VAN ONSELEN:
In fairness though, let me just jump in, that’s not what I’m talking about here.
I’m talking here specifically about, in a sense I’m agreeing with what you are doing, you are doing the data and the analysis to decide which programs work and which programs don’t, and that’s a Mea Culpa isn’t it? Because in 2014 it was just a case of ‘cut’ for the sake of some budget bottom line without looking at those programs. And when you do look at those programs, like the one that I’ve talked about – Youth Connections – it’s slashed, but now it’s been reinstated because of the work you’ve done to decide which programs work and which programs don’t.
When a program like that is reinstated, at the present time we now can measure it, we couldn’t before.
But if you want to describe this as a Mea Culpa, then every government for the last 50 years is responsible for layering on rules, process, administration, new types of supplements, new types of payments, new types of programs without properly evaluating them. Now part of that problem has been that up until the modern age we haven’t had either the data or the capacity to put the data in one place in one form that allows us to use it. So I’m not pretending that this is a problem that is exclusive to any part of historical government, but we are on the cusp – as I said at the National Press Club speech – of getting a glimpse into the future as to how we can actually use evidence based data to measure the outcomes of policies on the ground.
And largely governments have been doing things on a well-meaning basis, based on instinct and sometimes emotion, but we don’t always know whether or not these things, overall, make people’s lives better. And when you look at the target groups that we’ve targeted, they’re being drawn in to the welfare system, seems to, to a very high percentage, almost guarantee that there’ll be lifetimes, decades spent inside the welfare system. And those people are robbed of all of the advantages that we feel from work – the self-worth, the dignity, the structure and the ability to grow economically.
Let’s look at the bigger picture here. You’ve pointed out the welfare budget is $160 billion – that’s about 80 per cent of what we raise through personal income tax. Are we in a situation where we really can’t afford to have the welfare sector expanding relative to the size of the economy beyond what it is? How sustainable is the current welfare system, and the current rate of growth of the welfare system?
Well in my observation we’re on the edge of that point of sustainability. So $160 billion at the moment is growing at around about six per cent, and that is with all of the internal savings that we’ve made over the last four years. So that’s still a very high rate of growth, for what is in effect the single largest part of the federal budget, and we need to watch that very carefully.
But of course, with the aging of the population, as time moves on you will invariably have growth in certain parts of the welfare system, that’s inevitable, but the point I guess is that if you are at the edge of sustainability, it’s incumbent on any government to ensure that they get the absolute highest level of efficiency and outcome for every dollar they spend inside the welfare system.
What has occurred previously is that governments have been too afraid to end one program and move money into another program because of the criticism they suffer. But at least if we have evidence, that might show that the new alternative will work better than the existing program, then that offers any government some kind of rational cover to go out an explain to people.
I guess Paul, also inside government already, we’ve not been afraid to say there are just better ways to expend welfare money. We’ve been quite open and transparent that we want to draw down and close Family Tax Benefit end of year supplements, and move that money into the childcare system. The view that we took was that the end of year supplements were devised for a reason. The payment of debts that really now, no longer accrue. But that was a passive receipt of money that was affecting nothing particularly of note inside families, inside the economy. But if that money were redirected to childcare, could reform childcare. Could make that system more sustainable, less expensive and better organised, then that, in the long run, would be much better for Australian families.
So we’ve not been afraid to make difficult decisions about reallocating funding inside a very tight budget, at the edge of sustainability, from one area to another where we think the second area is a more effective spend.
You’ve pointed out that we’re now at a situation where about 48 per cent of people don’t actually contribute to the tax system – they’re net beneficiaries. So this really suggests that, half the population is contributing to the system and half the population is the net beneficiary of the system. To what extent have we got ourselves in a structural trap here? Is this, again, a tenable situation in the longer term?
No. I think that structurally this is a situation that has to be addressed.
It’s not the fault of people who receive welfare receipts, any more than it’s the fault of the people who are paying into the system.
If I give this example inside the Family Tax Benefit system – there are literally hundreds of thousands of families who pay around about $12,000 in tax every year, and then receive that money back in the form of Family Tax Benefits – almost to exactly the same amount of $12,000. And you could imagine that that is an extremely inefficient and costly system, to in effect draw money from one group through tax and give it straight back to them with all of the administrative costs and loss that occurs in moving that money through government and back to the pockets of the people from whom you took it in the first place.
So there are quite deep structural inefficiencies in the system. It’s kind of grown in an ad-hoc way, and these are all things that we can also use this data to try and help us design better system rules to affect change.
But I mean, that is an enormous challenge isn’t it? The churn that you’ve just identified there, the sort of political difficulty involved in addressing that problem seems to me to be pretty significant. Do you think it’s actually feasible to begin to address that challenge?
The Family Tax Benefit system, when it was designed in its present form by John Howard and Peter Costello had always envisaged tax credits rather than direct transfer welfare payments. But for a variety of reasons, that didn’t occur at the time.
I think one of those reasons – I look back historically, was that the technology really wasn’t available to allow those types of systems to be put in place. But allowing people to keep more of their own money rather than taking money off tem, washing it through government with all of the expense and administrative burden that takes and then giving it back to them – the first situation of letting them keep more of their own money is far preferable.
Now in the not too distant future, in 19/20 we’ll be moving with the ATO to what’s known as a single touch payroll system, and just the information systems and the data that you have available is much better than it was when the system was originally designed. So we will have certain junctures in the future that are available to try and sort through a few of these very long-standing, very inefficient problems, and do it in a way that actually advantages recipients of welfare payments, rather than disadvantages them.
PETER VAN ONSELEN:
We’ve got a question that’s come in from a viewer wanting us to ask you about the increase in the refugee intake in the context of the reality that a lot of people that arrive as refugees need welfare support, that’s understandable initially on entry, and how can you be taken seriously, trying to crack down on the costs of welfare when increasing the number of refugees, which just adds further strain to the system.
Of course resettling humanitarian and refugee entrants has a cost attached to it, and it’s not inconsiderable. We probably do it better than any other country in the world, and part of that is – as Paul had as an introduction to the segment – that we have great confidence in our system, we have our borders under control, but when a humanitarian or refugee entrant comes to Australia there are language issues, there are job-search issues, there are all the basic things – housing, schooling and of course my department is the department that resettles – so it’s far from an inexpensive business. But we do it efficiently, there are improvements that can be made, and again a lot of those revolve around how we measure performance, particularly on English language tuition – which is something that myself and the Education Minister have been working on – large amounts of money are spent on English language tuition, and we’re not sure that we’re quite getting the results we would expect from that – but we think that this is part of an overall system. It is a humanitarian response of a very decent and generous nation to world circumstances.
PETER VAN ONSELEN:
I wanted to talk to you about the response from ACOSS to you National Press Club address, with some of the announcements in there – I’m talking to Cassandra Goldie tomorrow on Newsday – she was pretty scathing about what has been suggested. What’s your reaction?
Well we don’t agree with ACOSS on everything. And we try and point out our differences in as temperate and evidence based way as possible. But going back to the points that were raised earlier – we have a budget under strain, at the edge of sustainability. We’re not getting results we want, so we have said – let’s try and devise ways to target those groups at highest risk, that will involve a little bit of extra money, in this case $96 million, but let’s target that money and try and produce better results.
The alternative, I guess is on offer with ACOSS’s suggestion, they wish to increase the base rate of NewStart by $53 for every recipient of NewStart. That costs $7.7 billion or there about over four years. That is a massive amount of money, which we don’t have – which would either have to be borrowed, so everyone’s kids are going to have to pay it back in the future, or it would have to be raised through new taxes – and I think that is a perfect example of just applying massive increases in money to all of the same processes and systems. It’s just more money, massively more money, to more of the same, and it carries with it no guarantee that anything will change, that any lives will be improved in terms of their long-term progress. And I just don’t think that is an acceptable way to spend massive amounts of taxpayers’ money.
It really lacks imagination; it shows an unwillingness to do things a little bit differently. And maybe on those issues we will disagree from time to time with ACOSS
Are we having a frank debate about this though Minister? You said in your speech at the Press Club that only five per cent of NewStart recipients are limited just to that payment – that is that the overwhelming majority of them have other payments or other sources of income as well. Is that the point you are making, and why hasn’t this material been put on the table earlier on?
It’s a very interesting question. I think it’s because no-one’s asked that question. There’s been an advocacy for several years now to increase the base rate of NewStart. NewStart, when you track it down is about $38 a day – it’s not a very generous payment – but when I first came to consider that advocacy, I asked the obvious question – how many people of the 770,000-odd who receive NewStart, how many of that group actually just receive the base rate. Because one of the features of our system that Patrick McClure noted in his review is that there are 20 major sources of welfare, types of welfare, and at the time that he looked at it 55 different add-ons, supplements, bonuses, additional payments, so it’s actually quite rare to find someone in a welfare system as layered and complicated as ours who just gets one type of payment and nothing else.
It surprises me that the advocates for the increase of the base rate if NewStart proposition or policy, never actually seem to bother to ask this question. I did, and enquired, and what it shows is that about 75 per cent – so fully three quarters of people who receive NewStart receive two other payments, at least two other payments. Twenty per cent receive one other payment and only five per cent just receive the base rate of NewStart. And of that five per cent, 95 odd per cent move off the base rate of NewStart inside six months. So in those circumstances, when you actually know the facts, would you think it’s a good idea to borrow or tax to the tune of $7 odd-billion and just apply an increase in the rate of a payment across the system without anything that looks like change, or reform or effort to actually produce better long-term results for individual human beings who are trying to traverse the system, and most often than not trying to leave the system and become self-reliant.
I just accept that that is a very sound policy approach.
Given the argument that you’ve just made there, are you in fact saying that one of the design features of the NewStart allowance, which after all is relatively low, it’s a very modest payment that one of the design features of it is in fact to encourage people to move off NewStart as soon as possible?
NewStart has never been designed as a payment for the long term. There are people who are inside the NewStart system who represent long term unemployed. As those figures that I’ve given you show, more often than not they are in receipt of other payments such as Family Tax Benefit, or a range of other payments – there’s a very long list.
With respect to that five per cent, who only receive NewStart, I mean it’s quite a remarkable figure that 95 percent of that five per cent move off NewStart in six months. And one of the things that we do find inside the NewStart system is that there are jobs out there, people are moving off the system, a very large number of people stay on NewStart for only very short periods of time.
And of course, that’s what the system is designed to do, is to provide a safety net, a transitional payment to keep someone during a period in which they’re searching for employment, having either just moved from one job to the next or coming into employment for the first time. This is why we are quite happy to still argue the case around an appropriate waiting period for NewStart for young people, which would focus only on the most ready, willing and able group to achieve employment. The group where all of the evidence shows can move into employment very quickly.
The reason why it’s important to try and encourage that group through any means possible to seek employment first and NewStart second is that statistically speaking, once you are drawn into the welfare system, the chances of you staying in for long period increases very dramatically. Whereas if you can be diverted at the first point, a gateway point of entrance, then that’s a much better outcome for you.
So, there are parts of the system design that do work fairly well, and with respect to NewStart, there’s a high movement into employment.
I wanted to ask you about another government policy, and this is the proposed four week wait for young people before they move onto unemployment benefits. This has been criticised very much. What is your justification for that policy position?
So, the four week wait would apply to young Australians. The concept is that you cannot make it perfectly seamless between leaving school or education, or family support and moving onto NewStart. Particularly for a group inside the system, as we know as a matter of evidence have the capacity and historical ability to move into employment very quickly, you want to place every mutual obligation upon that group at the first instance to move into employment.
Paul, the policy targets around 75,000 people, and allows about 85,000 to be totally excluded. So there are actually more people excluded from the process and the policy then there would be that would be subject to it; and those that are subject to it are what we know as ‘Stream A’ jobseekers. So these are the people that have, historically and statistically and as a matter of evidence, the absolute best chances of finding employment very quickly. Inside that four week period, very similar to the New Zealand system, you would be required to go through what’s known as a ‘rapid connect plus’ process where you have intensive support and tuition and assistance to do all the things you need to find a job.
So the point of this policy is not to make life any more difficult than it needs to be for anyone. But knowing what we know based on evidence and data, if we can ensure that every single effort is made in those critical first four weeks to choose the path of employment rather than to go onto NewStart for periods while you look for employment, your long-term chances of being a successful, contributing, self-reliant Australian are greatly increased.
PETER VAN ONSELEN:
But what are they supposed to do though for that four weeks if they can’t find a job, and if they don’t get any support?
Well prior to that four weeks, of course people have been in all sorts of arrangements with their families and social networks that allow them to exist without NewStart. To have a slightly longer wait period than just finishing school, or finishing your education and training we think is reasonable in all the circumstances, particularly with respect to the group we’re targeting, which we know is the group that can and do find employment quickly.
When a very similar policy was adopted in New Zealand, what was shown to occur, again through the sort of data tracking that we’ve now got available, is that people did make the right decisions for themselves, and they went out at very high rates and found employment.
How committed are you when it comes to mutual obligation to have an arrangement under which payments are going to be tied to people ensuring that their children attend school.
I don’t think that that can be answered perfectly in the theoretical or the principle. That has to be answered by looking at whether or not that process would work.
My instinct is to think that you could design processes there that would make that work, and I say that because we designed a process of retaining Family Tax Benefit and childcare payments from certain families if they did not immunise their children, because we’d had alarming drops in immunisation rates below what the experts call ‘herd immunity’, and the design and the careful construction of the policy that said you must immunise your child to receive these payment had the effect of radical increases in immunisation rates.
This policy has been a success even beyond the most optimistic measures that we would have had. That says to me that there are other areas in the system where you can assist people to make the absolute best decisions for themselves and their children through some of the levers that you have available in the social services space in the welfare system. Now, that would need to be done very carefully, by careful design, I’m pretty sure you would need to trial that. But I think this is a conversation worth having.
For instance Paul, the opposition, to my raising this even at the level of conversation or theory or consideration from the Greens is that you can’t do that because it’s paternalistic. Well you know, it’s just a word, what if it actually could be shown in the right places at the right times to work so that you had much better school attendance from young children, which gave them, as we know, much better opportunities to be productive, self-reliant, happy members of the community.
We should focus not on ideology or words like ‘paternalism’, but on whether or not these things could be made to work to produce better outcomes for human beings inside the system. My instinct is to think that you could design trials around this which could show good results, but you wouldn’t have broad roll-out until you could show good results.
PETER VAN ONSELEN:
What about the issue that, no matter how job-ready you can make large cohorts of unemployed, if there aren’t the jobs there in a difficult economic environment than it will all come to naught anyway?
Well the really interesting thing Peter about the data that we’ve now assembled is that it shows, if I can broadly put it to you, that it’s not necessarily the difficulty of finding the job, the difficulty seems to be maintaining long stretches of continuous employment for people. Because there’s this very swift movement amongst certain groups in and out of the welfare system, and particularly in between different payments in the system.
The proposition I’d put to you is that last year we created 220,000 jobs, compared to the last year of Labor in office, that was 86,000, we’re creating jobs at a three to one rate.
Jobs are being created, and very interestingly they’re being created in the types of industry sectors and service industries where we would expect there is a natural fit for people transitioning into first time employment.
So the food and entertainment industry, tourism, transport industries, and one particular example is caring. Good figures suggest that we could expect in excess of 100,000 jobs in disability care, aged care and child care between now and 2020, and yet at the same time that there’s very heavy job growth in these caring industries, we’re finding it very difficult, in terms of our structure, to transition people out of a caring arrangement, so a welfare benefit paid to allow them to care for someone, when that stops we’re finding it difficult to transition them out into employment. That suggests that there’s something wrong with the system design, with the rules, with the administration and with some of the programs that we might have been running, perhaps ineffectively.
I don’t accept that we don’t have a healthy, robust job market. We do, and it’s robust in the areas where it will suit first time transitioners into employment, but something is being lost in translation, if I can put it that way.
PETER VAN ONSELEN:
Let’s talk about the Senate if we can, they are the permanent elephant in the room, no matter what you come up with, no matter how well you structure it, no matter how data-focused it is, nor how well you sell it in the media, ultimately you need to get it through the Senate.
I mentioned off the top of the program that it looks like Jenny Macklin is steering the Labor Party towards opposing a lot of what you’ve put in place already at this point in time, which then leaves the Greens and the cross-benchers. Are you already in discussions with them? It strikes me that buy-in for them early on is absolutely crucial if you’re going to get the numbers.
We’ll give very heavy briefings, and detailed briefings to all of the crossbenchers. I met with the Nick Xenophon Team and with some of the One Nation people around some of these issues, but particularly about existing policy we’ve got, so that will be an on-going process.
Some of the things that we’re trying to do, obviously with our Try Test Learn Fund and targeting what is new expenditure on groups that we know have bad results, that can be clearly done administratively, and there are other things that can be done administratively.
If there are some design changes and rule changes that we think the data shows are absolutely necessary to produce better long-term results, then we just have to argue that case. I guess saying that there are always going to be difficulties in the Senate is like saying that you get wet when you go out for a surf, it shouldn’t stop us from getting out on the waves.
PETER VAN ONSELEN:
The other issue that I wanted to talk to you about – I just want to go back to this issue of the gap that can exist. I talked to you about this before, the four weeks that Paul Kelly raised, before people are eligible for their assistance after leaving school, for example. Are they guaranteed to be still on the old scheme, like if they were on some sort of school-based assistance before they then move on to unemployment assistance? Or is there always a four week gap there?
A school-based assistance is only going to be paid whilst you’re studying, so if you were on some form of welfare beforehand there would be a gap, but again what we’ve done…
PETER VAN ONSELEN:
Can I just asked about that, I’m philosophically on board with work for the dole, I’m philosophically on board with all forms of mutual obligation, I like the idea of the data driven analysis that shows that there are people receiving multiple amounts of assistance, so any analysis that narrows to what NewStart is and how liveable or unliveable that is only applies to a small cohort of the unemployed – I’m on board for all of that.
But I can’t for the life of me see how it’s acceptable to leave people with a four week gap and just hope that they’ve got savings or people that will help them out.
Well it’s not just hope. What we’ve said is that, in a pool of about 150,000 people, there are ways in which we can identify the people that we think can cope with the four week wait, and the ones that can’t.
The ones that can’t cope, number in our estimate of about 85,000, they’re stream B and C jobseekers, so people who have particular familial challenges, particular disadvantages, and then there are a whole range of exceptions, anyone who’s had difficulties of domestic violence or a mental health issue – all of them excluded.
So what we’ve tried to do is target the policy just at that group that we think, based on all the best evidenced we have available, can cope with that four week waiting period, because of family supports and other ancillary parts of their own lives, but who would benefit most from the firm but fair approach of requiring intensive job-search during that four weeks to try and prevent them from coming into the system in the first place.
I accept what you’re saying, that even the best targeting is not going to mean that there won’t be small groups of people who might not find that challenging, even with the targeting that we’ve gone through, but it must be stressed that we’ve targeted this policy to those who are absolutely best able to cope with it, based on best evidence that we have available to us.
You’re clearly trying to redesign the politics of welfare. The Coalition Government has paid a high political price over the last few years for some of its proposed welfare initiatives, but particularly in 2014. What is the essence of the new political approach that you’re attempting to put forward in order to get up these sorts of welfare reforms?
I think it goes back to that question about the purpose of welfare and the purpose of the welfare system. If it is merely to keep people out of poverty, as was suggested by Jenny Macklin, then that is a particularly unambitious, unimaginative and not very helpful way in which to conceive the system.
Of course that’s part of it, but surely a large part of the welfare system is about trying to have systems in place that not only assist during times of need, but are structured in a way that they’re not ‘set and forget’ so that you apply taxpayer money to people in need in a way that gives them the absolute best opportunity themselves to become taxpayers, to enjoy all of the experiences of structure and vibrancy and social networks and self-worth that you get from employment.
So, as part of rethinking the rules, the systems, the programs – that should all be directed to the central question, how do they all and the system promote self-reliance and promote employment?
That’s not always going to be possible in all circumstances, there will be groups inside, for instance, the disability support payment system who will never have any mutual obligations placed upon them because they don’t have the appropriate capability to seek and hold employment.
However, amongst the very complicated, 16 different types of working aged payments we have for Australians who are not in employment – 400,000 instances arise where there aren’t really any mutual obligations placed upon the recipient of a payment.
Now, that structure may do what is suggested, ie keep people out of poverty, but it is not a structure, where you have 400,000 people with no mutual obligations on them whatsoever, it’s not a structure that actually assists those people, make the best decisions for themselves, prepare for employment, search and find employment and live better, happier more productive lives.
So this is about the way in which policy affects real Australians on the ground.
PETER VAN ONSELEN:
Social Services Minister Christian Porter – we appreciate you finding the time to talk to us this morning, thanks very much.
Thanks to both of you.