Speech by The Hon Mal Brough MP

Social Innovations Dialogue

Location: Hunter Valley


I would like to preface my remarks by thanking Patrick for the opportunity to speak at this significant event and to share my thoughts on what I consider the most important element of our society: the family. The success or failure of this fundamental building block of our Nation to function effectively, to prepare our children for the challenges of the future and to instil a set of values and principles in a safe and loving environment will not only determine the individual journey of these young people it will determine Australia’s future.

Most Australian families have strong relationships and values which underpin the communities they live in. It is the strength of these families that makes Australia strong.

Most Australian communities are cohesive and supportive and they provide the opportunities needed for people to pursue fulfilling lives.

Strengthening the family by helping with the cost of raising children is the best way any government can reinforce social cohesion and stability in a changing world, and this government has done a great deal to assist families directly.

The provision of the FTB is supporting families and providing them with better work and family choices. It has been instrumental in allowing parents to set their own priorities when it comes to raising their children.

Record spending on FTB, record numbers in work, real wages growth in excess of 16%, and doubling of net household wealth over the past 10 years are all significant achievements that have a positive and lasting affect on families.

However the reality is that there are still a small percentage of children that does not receive the necessary support, nutrition, education and life skills from their parents or carers despite the provision of considerable financial and practical support from the Federal Government.

This can be seen by some children having to attend school breakfast clubs because there is no food in the home, (of course not all children attend for this reason) persistent truancy, poor health, young people wandering the streets at night and criminal behaviour often involving drugs and alcohol.

The reality is that these children are often in homes where alcohol and drug abuse is common, irresponsible gambling strips the family of the cash to maintain a functioning household and domestic violence is a regular occurrence.

There are a myriad of essential support programs provided by State and Federal governments as well as the community sector. However, these programs don’t address a fundamental issue for the dysfunctional families I have described, where the greatest temptations are created by available cash.

It is cash in the form of welfare payments that provide choices for parents in these situations to choose to gamble before buying food, or purchase drugs rather then clothe their children. It is, in fact, the payments that are provided by society to uplift these families and, in particular the children, that provide the substances to fuel the violence and destruction. Society then picks up the pieces at the hospitals, prisons and morgues.

Many of you will be familiar with the circumstances that I speak and have no doubt devoted considerable thought to how to address these challenges.

The Chair of the National Indigenous Council, Sue Gordon, has witnessed some of the worst of society and is speaking out on the distressing situations she has witnessed in indigenous communities. She calls for extra effort to see real change in both attitudes and actions of both governments and individuals.

Noel Pearson has also shown real leadership in advocating for a change in the way welfare is delivered in Cape York. His first hand experience of the distress in his communities has led him to search for answers. To that end, I announced earlier in the week that the Federal Government had committed funding to the Cape York Institute to undertake research into fresh approaches to delivering welfare. I wish Noel well with this important work and look forward to seeing the results.

My own experience in visiting Aboriginal communities and listening to their concerns has also convinced me of the urgent need to look for a better way to target assistance to this small group of vulnerable Australians and ensure that welfare payments build stronger families, not inadvertently provide the means to destroy them.

It is important to acknowledge here that whilst the suffering that Noel and Sue speak of is very graphic, concentrated and visual in some remote communities the reality is that domestic violence, drug and alcohol abuse, irresponsible gambling and criminal behaviour are not isolated to these communities. They are, in fact, present in a small minority of families throughout Australia.

This is a not a problem unique to Aboriginal communities.

It is for this reason, that I believe that any solutions must apply to all those Australian families that face the same problems and not to just one group in society.

I am sure we all agree that the overwhelming majority of Australians make very good use of the money they receive in the form of Family Payments, Newstart and Parenting Payments and that any solution should not impact on these people. I certainly have no intention of interfering in the legitimate decisions most parents are quite capable of making in the best interest of their families.

In searching for answers, I have examined other aspects of Government policy such as the much publicised voluntary school attendance trial in Halls Creek. Here is a situation where a parent attends a voluntary interview with a Centerlink officer and discusses personal options for their family. Parents have elected to have $30 per week direct debited to the school tuckshop from their Centrelink payments. This pays for breakfast, morning tea and lunch five days a week. The result is greater attendance at school, a better fed student that is more likely to learn and less discretionary income for the family to spend on negative and destructive temptations.

Another example of a voluntary scheme is the Family Income Management initiative currently running in the Cape. Once again, by using the Centrelink direct debit system (Centrepay), families are paying for essential services, housing and other basic family needs ensuring that financial support provided by the Federal Government is used for the intended purpose. Of particular note is a nutrition initiative operating through the school and paid through Centrepay that is improving the health and wellbeing of the participating children.

This system of payments has had a second extraordinarily beneficial outcome. As the discretionary dollars within these families and communities have reduced so has the violence, drug and alcohol abuse.

All of this was achieved without increasing by one dollar the payments received by these families.

Unfortunately, not every family will take up these initiatives voluntarily and consequently many children will continue to live with the challenges we have discussed.

It seems to me that we have the evidence that proves that reducing discretionary income and ensuring payments are directed to their intended purpose makes a real and positive impact on those we are seeking to assist.

The question, therefore, is how do we achieve this more widely?

I believe that it is time to take the tough decisions and move to a system that requires certain welfare recipients to have part of their payments directed specifically to the benefit of their children. Basic food, clothing, health, education and housing should comprise the allowable categories for these payments. By requiring these targeted welfare recipients to participate in an interview with Centrelink and arranging for direct debits of their welfare payments to these areas of expenditure, we can make a real difference to the quality of life of the children and ultimately their families and the wider community.

Some people may argue that it is not possible to identify these families. I disagree.

For example, School Principals know the children who are regularly absent, welfare workers are only too well aware of the families that require their attention and the police and courts have the difficult task of having to address both domestic violence issues and other criminal activity.

In fact, the families can be identified, what we must now decide to do is to act.

I believe we can’t afford NOT to act.

There is no good reason for not taking this course of action. It is technically possible. I have had preliminary discussions with the country’s largest grocers and I am assured that the EFTPOS system could be used to deliver targeted welfare via a debit card. Even unsophisticated operations such as school tuckshops can be part of the scheme, as we have seen in Halls Creek.

I recently announced that the Government would legislate to allow non-resident parents who were concerned about how the money they pay to their former partners to provide for the benefit of their children was being spent. They will be able to elect to make up to 30% of their child support obligations in-kind as opposed to cash payments in order to ensure that their children benefit from the payments made on their behalf. I am advocating a similar principle for a limited number of welfare recipients.

Few people begrudge parents receiving financial assistance from the taxpayer for genuine need. However many resent seeing the money wasted while children go without.

I believe that it is reasonable for an amount in the order of 30% of the welfare payments to be directed in this way for welfare recipients who are identified as failing their children.

The adoption of this proposal would have a dramatic and positive impact on some indigenous communities. It could have an equally positive impact if applied more widely.

I am not pretending for a minute that this is an answer to all of society’s woes. However, I believe it would greatly benefit those who need our assistance most.

Ladies and Gentleman, the inspiration for the approach I have outlined today came from visiting distressed Aboriginal communities and listening to their concerns and fears. One common sentiment expressed to me was that “sit down money” was no good, it is destroying families. Of course, it is not the money that is doing the damage but rather what it is being spent on. While many different concerns were raised the constant was the misuse of this discretionary income.

As you would understand, my thoughts today are my own, and are not Government policy. Having given considerable thought to the issue, I will travel to Alice Springs and a number of remote communities next week and share my thoughts with these people and gauge their reaction. I will subsequently discuss the outcome of those discussions with my colleagues.

I believe this is a debate we must have and that change must happen if we are going to ensure welfare works for and not against, the most vulnerable.

Thank you.