Welfare spending; welfare reform; Cabinet positions
E&OE
Subjects: Welfare spending; welfare reform; Cabinet positions
SAMANTHA MAIDEN:
We’re going to take you live though now to a discussion with the Social Service Minister, Christian Porter, who joins us in Canberra.
Thanks for coming in. I’ve just been having a look at all your fantastic facts and figures on welfare. More headlines today saying that there’s this huge welfare bill; that the cost of families currently on welfare could be $2 billion; can you just unpack that statistic for us a little bit?
CHRISTIAN PORTER:
Well yes, so this is what we’ve been talking about, really, for the last two years. The imperative of the Government is moving people from welfare to work, and we want to do that, obviously, because that improves individual lives and it also ensures that generational welfare isn’t handed on to kids. But when you measure the lifetime costs of everyone in the welfare system, you get this very large expenditure that the taxpayer is responsible for. So as you improve individual lives and move more people from welfare to work, you do a great service to the taxpayer over the very long sweep, and we’re trying to measure these things now, not just in a budget-to-budget cycle, but if you look at all of the people in the welfare system now, if you can’t decrease that amount going forward, how much is that going to cost the Australian taxpayer over several generations?
SAMANTHA MAIDEN:
But it’d be more than a billion, wouldn’t it? What does that- because your welfare bill is way more than that now, so does that billion-dollar figure attach to a family or, surely can’t be a family. It seems like it’s both too big and too small. That’s what I’m trying to work out.
CHRISTIAN PORTER:
So, the yearly expenditure on welfare is quite close to $160 billion, and that represents now about 80 per cent of all of the income tax collected in Australia. It comes in and is spent on the welfare budget. Now, under the Labor …
SAMANTHA MAIDEN:
So we’re working just to pay the welfare bill.
CHRISTIAN PORTER:
Correct, but under the Labor Government in the previous six years when they were in office, at one point they were spending more than 100 per cent of the entire personal income tax take on welfare. Now, the second figure is about if you look at that group of Australians who presently receive welfare and then calculate how much that welfare will cost over the entire lifetime of that group, then we start reaching not into the billions but into the trillions of dollars of expense for the taxpayer.
We also know that there’s a high likelihood that if someone spends a long time on welfare as an adult, that that outcome actually gets handed over to their kids, to a far greater proportion than in a family who have a history of a working life. So what we have targeted all of our policy around – so this is why we’re doing new things like the cashless welfare card, drug testing; this is why we’ve been far firmer on compliance – because if we can break those cycles of welfare dependency, we improve the individual life of the person who’s now working, which is always the best form of welfare, and we decrease the prospects of a child spending long times in the welfare system very significantly. Now, the outcome of all of that has a very significant financial impact for the taxpayer, but the first reason that we do this is to make peoples’ lives better.
SAMANTHA MAIDEN:
It’s tough love, but in relation to this, there’s two things that I think are really interesting.
One is all of the issues around how likely you are to remain in a cycle of dependency on welfare if you grow up in a family where people don’t work, and there’s terrible statistics of the thousands of Australian children that are living in families where no parent works. So that is obviously something that you want to address, and I think that it’s really interesting, some of the reforms that you’ve been looking at in relation to New Zealand about early intervention, actually targeting these people because you know that they’re more likely to be on welfare 10, 20 years down the track.
CHRISTIAN PORTER:
So let me use this example. Recently, some academics last week, using data that my department provided, indicated that a child who grows up in a family where there’s long stretches with the parents on welfare is 50 to 80 per cent more likely themselves to end up inside the welfare system. So that’s a very significant transfer of intergenerational welfare dependence.
Now again, we’ve worked very hard to get the growth in actual numbers and expenditure on a payment like Newstart down. So, under six years of Labor, the Newstart bill every year – so the unemployment welfare benefit bill every year – was growing at an average each year of 13.5 per cent – every single year for six years. The actual average growth under us since we’ve been in government is 3.7 per cent.
What does that represent in human terms? It represents more people moving off Newstart and into employment quicker. And again, if you can do that with the sort of innovative policies that you’ve just noted, not merely are you improving the lives of those people who are on Newstart today, but you are increasing the prospects that their children are going to have prosperous, happy, employed lives by very high percentages.
SAMANTHA MAIDEN:
It’s really interesting, but I’m wondering, and it’d be great if it works, and there’s some evidence that it works in New Zealand, but you’d have to say that it’s really at a pretty early stage of experimentation, what do you know now about what you should do for a kid who is living in a family where both parents aren’t working when they’re seven, eight and nine? What can you actually do to help that child?
CHRISTIAN PORTER:
Well, the first and foremost thing, and I think that all of the good research shows this, the best thing you can do for that child is make sure that the parent moves from welfare to work. If the parent is working and leading a structured life …
SAMANTHA MAIDEN:
Why is that? Is it about modelling, role modelling? Role modelling?
CHRISTIAN PORTER:
Well, welfare, in effect, represents a level of disadvantage itself. So, if you grow up in a family, just imagine this, where you grow up in a family where you’ve never seen anyone get up, shower, prepare for work, drive to work, lead a structured day, come home from work, tuck you in at bed at night, and you have had that experience for five or 10 or 15 years.
SAMANTHA MAIDEN:
You’ve got no frame of reference.
CHRISTIAN PORTER:
Correct, then you have never been in a lived behaviour where you understand the normalcy and primacy of work.
SAMANTHA MAIDEN:
I remember discussing with Scott Morrison once, and he told a really sad story that he had come across occasionally when he visited places, where younger people who were looking for work or trying to get into the workforce, where they had other family members that weren’t working, would actually, like, belittle them for it.
CHRISTIAN PORTER:
Well, I mean, in some communities you do hear these stories. You see it with your own eyes on occasions, and then there’s anecdotes about it. But this is why we come back to the fundamental point that the first and best form of welfare is a job. So I was asked a question in a media conference not that long ago; whether or not, given our new stronger compliance regime, someone who, say, had trained to become an aeronautical engineer should be happy if they could only achieve a job in retail or tourism. Now, whether that person’s happy is up to the individual, but what I can absolutely assure everyone is that a person is always better off earning money from their own endeavours than they are receiving money passively from the taxpayer. And so our priority has to be to stop the passive receipt of welfare. It’s to be used as a generous safety net. Two-thirds of people on Newstart move off within six months, but what we’ve identified is a group of about 100,000 who persistently miss key important appointments, like a job interview.
SAMANTHA MAIDEN:
But you don’t really ping them. There’s all this evidence that you don’t actually do much about that, despite what’s on the books.
CHRISTIAN PORTER:
Well, that’s the state of play now, which is why we’ve got a 200 page Welfare Reform Bill before the Senate that totally restructures the compliance regime and moves from a very complicated, hard to understand, quite sloppy regime that doesn’t have enough clear, enforceable penalties..
SAMANTHA MAIDEN:
They’ve got all the excuses under the sun, but just before you go quickly, what’s the status; one of the big stories out of the Budget was the drug testing idea – that really looks like it’s toast now. How do you plan to proceed with that if it’s going to be blocked by Parliament?
CHRISTIAN PORTER:
I’m very confident that we will move that through. Now, we’ve got a 200-page Welfare Reform Bill and it does a variety of things, including fix that compliance regime which is an absolute priority. So we’re moving from this complicated, hopeless regime to a very simple demerit point system, like your licence, where you move into a phase of three strikes; one strike, you’re out for a week; two for two weeks; three for a month. Very simple system. That’s an absolute priority. It’s 200 pages worth of reform.
No secret that we’ve been in negotiations with the Nick Xenophon team; they’ve got reservations around drug testing. So if it comes to a crunch decision where we need to decide whether to get most of the Bill through, we’ll make that decision when that arises. But let me say, we are absolutely committed as a Government to trying new things.
SAMANTHA MAIDEN:
So even if you have to split the bill, you’ll bring the drug testing stuff back?
CHRISTIAN PORTER:
We will not be giving up on drug testing, just like we didn’t give up on the cashless welfare card, just like we didn’t give up on No Jab, No Pay, which were both policies that a whole range of people said we shouldn’t institute; experts very often said we shouldn’t institute and that wouldn’t work. And yet we persisted with the cashless welfare card, and you know what? It’s actually working to improve the lives of people in the communities of Ceduna and the East Kimberley, and we’ve got two more trials rolling out soon.
We persisted with No Jab, No Pay, where we tied Family Tax Benefits to the requirement to get immunised. That’s improving kids’ health, and particularly Indigenous kids’ health.
SAMANTHA MAIDEN:
The vaccination stuff is really popular. I mean, it’s really fascinating work. Are you sure you want to give it all up to become the Attorney-General, as we’re told that you’re going to do if George Brandis leaves?
CHRISTIAN PORTER:
Well, my mind is on this job because I absolutely feel that it is the greatest endeavour that any government can engage in, is moving people from welfare to work. Having the employment bill grow by 13.5 per cent under Labor should’ve been the front page of every newspaper in the country. Somehow or other it kind of went under the radar, and it was a massive failure for all Australians who want to give their kids better lives by earning income and making sure that their kids get into good jobs when they turn 18 or 21, whenever they finish their studies.
(ENDS)