Disability Support Pension – Sky News PM Agenda with David Lipson
E&OE
DAVID LIPSON
Well, every year in this country, right now, about 800,000 people receive the disability support payment, and it’s worth about – or up to $400 per week. It also is a huge impost on the budget, about $15b right now at a time when the Abbott Government is looking in every corner for cuts and savings, saying that everything is on the table.
Also, over the past ten years, we’ve seen a 20 per cent growth in the number of people receiving the disability support payment. Well, joining me now to discuss and other matters is the Social Services Minister, Kevin Andrews – joins us from Melbourne. Thanks very much for your time this afternoon.
KEVIN ANDREWS
Good afternoon David.
DAVID LIPSON
Why has there been such a big growth in these payments over the last decade?
KEVIN ANDREWS
It’s difficult to precisely know, and that’s why I’m having my department look at it at the present time. But as you say, a 22 per cent growth in a decade, more than 800,000 people on the DSP – if those trends were to continue we could have close to a million people on the DSP, which is a very significant number, given the population of Australia.
DAVID LIPSON
So does it need to be capped – the spending on the DSP?
KEVIN ANDREWS
What we’re doing is having a look right across the board, but we’re most interested in why people are coming onto the DSP. We know that one of the large growth areas has been people with psychological disease or psychological illness, we want to look at that again, as to why that’s the case. But, in particular, we want to try and avoid the DSP being a kind of dead-end payment; that is that once people are on it they’re basically left there for the rest of their working life.
Instead, particularly for younger people, we want to see whether or not we can work on the ability or the capacity that they have, rather than concentrate on the incapacity, and ask whether or not, with some further assistance, they may be able to work – if only part time.
DAVID LIPSON
But have you been asked by the Prime Minister or the Treasurer to find a way to stop this growth, to put any downward pressure on the growth or to cap it, as I asked?
KEVIN ANDREWS
I haven’t been specifically asked by the Prime Minister or the Treasurer to do that. What concerns me is if we’re going to maintain a welfare system in Australia – which I believe we should, and we should have a safety net for those people who are genuinely in need – then we have to make sure that the welfare system is sustainable. And this sort of growth points to unsustainability rather than something that we can maintain into the future. And that’s against the backdrop or the context that we’ve got a rapidly ageing population, we’re going to have twice as many people over the age of 65 in 10 or 15 years, and we’ve got a huge contraction in the growth of the workforce – the working age population.
So that demographic trend means that we have to seriously look at the sustainability of our welfare system, otherwise we’ll find ourselves, in a decade or so, in the position that some of the European countries find themselves in today.
DAVID LIPSON
Okay so you’ve flagged the possibility of a two-tiered system, where you have people who will receive the disability support payment permanently, and then those who will only perhaps receive it temporarily. First of all, that’s not Government policy at this point, is it?
KEVIN ANDREWS
No, there’s been a whole range of options put to us, and this is what I have the group looking at. One of those options is to have a two-tiered approach to say that from the outset, a person doesn’t automatically get qualified or categorised as having a permanently disability, but that we should start with them having a categorisation of a temporary incapacity, and look at whether or not – with some assistance – we can actually help that person to find work on the basis that the best form of welfare, ultimately, for most people is a job. A job brings not only financial rewards but also has a lot of psychological benefits as well.
DAVID LIPSON
But how do you differentiate between someone who needs temporary payments and those who need permanent?
KEVIN ANDREWS
Well that’s why you have doctors and experts to look at these things. And this is one of the suggestions – it’s not the only suggestion – the Government at this stage hasn’t got a fixed idea about what we will do, but we are determined to have a close look at this because, as I said, we have to have a sustainable welfare system in Australia, and some of these trends are pointing worryingly in the wrong direction.
DAVID LIPSON
For people with disabilities though, if they’re put on a temporary – or given payments on a temporary basis, that’s going to put some pretty serious pressures on them that could blow out in other areas of their lives, couldn’t it?
KEVIN ANDREWS
Well that’s what we’ll have to have a look at. As I said, we haven’t got a fixed view about this. What we do know though, is that the trends at the moment are not the desirable trends, and therefore we need to have a look at all of these issues. I also remind you that when we did welfare reform under the Howard Government, it actually cost us money upfront. Any benefits or savings to the budget tend to be in the medium or long term, not in the immediate term.
DAVID LIPSON
Ok. So, at the time – the same time as going ahead with the paid parental leave scheme, which pays up to $75,000 for mothers earning $150,000 or more, Labor says that there’s no justification for trying to make savings from people with disabilities. What’s your response to that?
KEVIN ANDREWS
Twofold. Firstly, paid parental leave is a work-related measure, and in fact there’s a parallel between looking at the DSP and paid parental leave, because in both instances what we’re concerned about, against the backdrop of the rapidly ageing population, is how we can maintain more people in the workforce in Australia. In one case, parents, and to try and make sure that they maintain an attachment to the workforce; and in the second case with disability, where people have some capacity to work, to actually ensure – if we can give them some assistance – that they can work.
But the Labor Party made changes themselves to disability, and we supported those changes and in fact anything that we do will build upon their changes, which in turn built upon the previous changes of the Howard Government. So, I don’t think this is a place for, sort of, party politicking on the part of the Labor Party. We’ve got to be sensible otherwise we won’t have a sustainable welfare system.
DAVID LIPSON
Can you rule out paring back the total envelope, if you like, of disability support payments?
KEVIN ANDREWS
Look, I know that’s a favourite question of journalists David, with the rule this out, or rule this in or whatever – look, I’m not even in a position where I’ve got a report in front of me at the moment. What I’ve done is I’ve commissioned some research, I’ve commissioned some work on this. I’m involving Patrick McClure, who headed up an inquiry for the Howard Government into participation and people in the workforce. It’s about 15 years since he did that, so it’s timely to ask Patrick to review that as part of this process. Then, I hope, that we’ll have a series of options which we can have a serious look at from the point of view of the Government.
DAVID LIPSON
And are there any other areas of welfare that you are putting particular attention on when it comes to potential savings?
KEVIN ANDREWS
Well, again, this is not about savings as the primary vehicle, this is about how do we maintain a sustainable welfare system, and how, with a significant contraction in the growth of the workforce, how do we maintain a workforce into the future that can actually provide for a growing group of dependent people, many of whom will be older. So that’s the primary motivation.
If you go back to 2005 when the Howard Government made significant welfare reforms, which I oversaw then as the Employment Minister, we tackled three areas: disability, sole parents, and the unemployed – and particularly the long term unemployed.
I think we were quite successful in terms of sole parents, and the numbers have come down very significantly since then. But the disability numbers have grown, and there’s still a very significant number of people on long-term unemployment.
So, they’re obvious areas that any Government concerned about the sustainability of welfare will have to look at.
DAVID LIPSON
Mm. Just on health insurance. Most families these days have it, the Government’s approved a rise of 6.2 per cent on average in premiums for next year. That’s more than last year’s 5.6 per cent increase, and it’s almost three times inflation for this year. Why is there such a big increase?
KEVIN ANDREWS
Well these are things which the Health Minister Peter Dutton looks at very carefully. And both sides of politics have had to adjust these figures year by year when they look at private health insurance. Again, a majority of people look to private health insurance in terms of providing in part for their healthcare in the future.
But these funds also have to be sustainable, and Peter Dutton has made a careful assessment of that, and then approved these particular rises.
DAVID LIPSON
It will be quite an impost on families though next year, won’t it?
KEVIN ANDREWS
And that’s why we’re concerned about other things that have an impost on families. Now if we can get rid of the carbon tax, well then we can reduce some of that impost on families.
So, we’re concerned about the cost of living, obviously. And that’s why we’ve got certain measures before the Parliament, including the abolition of the carbon tax, in order to try and reduce that pressure on families at the present time.
DAVID LIPSON
Kevin Andrews, Minister for Social Services. Thanks very much for your time this afternoon, and Merry Christmas.
KEVIN ANDREWS
Pleasure David, Merry Christmas to you and all the viewers.