Welfare system – ABC AM
E&OE
TIM PALMER:
The Federal Government says the current rate of welfare payments in Australia is “unsustainable and relentless”, and more must be done to reduce the burden on the federal budget.
The Social Services Minister, Kevin Andrews, says a new report by his department shows one in five Australians received some form of income support in 2012, at a cost of over $70 billion to the Government.
Mr Andrews has already ordered a review into the broader welfare system, and flagged changes to one of the biggest payment areas, the Disability Support Pension (DSP).
Our political reporter, Naomi Woodley is speaking here with Kevin Andrews.
NAOMI WOODLEY:
Kevin Andrews, what does this report from your department show about the growth in income support payments over the past 10 years?
KEVIN ANDREWS:
The report shows that there has been a significant growth in income support payments. It’s gone to over 5 million people now in receipt of some form of income support payment or another.
NAOMI WOODLEY:
And do you believe that that burden on the federal budget is something that can be sustained, given the growth in population as well?
KEVIN ANDREWS:
Well, what we have to look at is the future in the medium to long term and if growth continues at this rate, in the context of an aging population in which there are going to be more aged dependents in particular and a significant slowing in the growth of the workforce then we have to be prudent about how we can sustain the system into the future and that’s why I’ve asked Patrick McClure, who headed up the report for the Howard government about a decade ago, to have another look at this area.
NAOMI WOODLEY:
He, of course, recommended then a single welfare payment with then top-up or booster payments for specific needs. Is that something that you’d be keen to examine again?
KEVIN ANDREWS:
We’re not looking at a single payment in the immediate future but what you raise is an issue that’s been there for governments for probably two decades now and that’s partly because the indexation system between payments of pensions varies so much so that there is a growing gap between the amount of money that people get on pensions and the amount of money they get on for example NewStart. That’s because they’re indexed at different rates and it creates a perverse disincentive for people to want to get onto for example the Disability Support Pension.
NAOMI WOODLEY:
After the Aged Pension, as you mentioned the Disability Support Pension is the biggest group of income support recipients. You’ve already flagged some changes, particularly for younger recipients. Should that be expected in this year’s budget or before then?
KEVIN ANDREWS:
Well, what we’re looking at once again is how we can encourage more Australians who are capable of working to actually work. Now the people on the Disability Support Pension are not one homogenous group of people. Obviously somebody that’s been on the DSP for a period of time is less likely to be able to work but if you could look at people who are going onto the DSP, not just treat them as a kind of set and forget payment which it has become, but to look at whether we can encourage them to do some work then I think that’s well worth having a look at.
NAOMI WOODLEY:
Are you at all considering how the DSP interacts with the National Disability Insurance Scheme, and the payments that people receive in that program?
KEVIN ANDREWS:
Well, the National Disability Insurance Scheme is something which we’re committed to. The Productivity Commission figures suggest that about 460,000 Australians will qualify for the DSP but there’s a much larger group of people, over 800,000 who are now on the DSP, the 460,000 would qualify for the NDIS, or DisabilityCare, in Australia.
So we’ve got to look at both of these groups. Obviously they are different categories of people but nonetheless there is a common theme and that is one of disability. But our point once again is that the best form of welfare is work and if we can encourage people who are capable of working to work then that would be a good thing for them and for the country generally.
NAOMI WOODLEY:
You’ve described the growth in these payments as relentless and unsustainable. Surely then you need to look at the biggest structural problem, which is the aging population and the Aged Pension. Do you have any plans to look or make changes there?
KEVIN ANDREWS:
Well, Mr McClure is not looking at the Aged Pension. At this stage we are looking at other income support payments but not the Aged Pension.
NAOMI WOODLEY:
How can you then though address what you say is a relentless and unsustainable burden on the budget if you’re not going to look at that biggest section of the welfare system?
KEVIN ANDREWS:
Well, it’s important I think that we do these things piece by piece. We can have a look at some of the other payments at the present time and they’re consistent with what McClure had looked at in the past, so that’s the approach we’re taking at this stage.
NAOMI WOODLEY:
If over $70 billion each year, which is your estimate of what, or your figures of what the current income support system costs the Federal Government – if that $70 billion figure is unsustainable, what is an appropriate figure in your mind for what the Government should be spending in this area?
KEVIN ANDREWS:
I don’t have a particular figure and I don’t have a fixed view about how we address these issues, but what I do know and what I think most Australians realise is that with the population ageing at the rate that it is, we’ve got to ensure in the future that we’re able to sustain the welfare system, otherwise we’ll find ourselves in 10 or 15 years time in the situation that some of the countries in Europe are in.
We have to do that and we have to also sustain a workforce so that we can continue economic growth into the future.
TIM PALMER:
The Social Services Minister, Kevin Andrews with Naomi Woodley there.