Welfare System Shake-Up

The Federal Coalition is about to overhaul Australia’s social welfare system claiming there’s a “debilitating cycle of endless welfare dependence”.

The announcement of the hard hitting review comes from Federal Social Services Minister Kevin Andrews.

Minister Andrews flagged the idea last September, saying he  believed the system was ad hoc and needed to be simplified and reformed to encourage welfare recipients into work.

According to a spokeswoman for Minister Andrews, the welfare review will be ongoing and was based on the findings of the Department of Social Services report Income support customers: a statistical overview 2012.

The investigation will be led by former Mission Australia Chief Executive Officer and former  Aged and Community Services Australia (ACSA) CEO Patrick McClure.

The report shows that as of June 2012, 549,773 people were on the Newstart allowance however more recent figures in 2013 showed that 646,414 were receiving the allowance – a result of the changes to Parenting Payment Single allowance. It also showed that at June 2012, 827,460 people were on the Disability Support Pension compared to the 818,850 people in June 2011.

“This report shows a steady increase in income support recipients over the past five years, with more than five million Australians now receiving an income support payment like Newstart Allowance, the DSP and the Age Pension,” Minister Andrews said.

“Recent reforms to the Disability Support Pension have resulted in a drop in grant rates. But the number of people receiving this payment still rose by more than 100,000 people between 2007 and 2012.

“There were 132,000 more people receiving Newstart Allowance in June 2012 than five years earlier, a growth which has continued in more recent times.

“There is no doubt that income support payments provide a critical safety net for people who are unable to fully support themselves – but those who are capable of working must be better supported to do so, to break the debilitating cycle of endless welfare dependence.

“One in five Australians receives an income support payment. This costs the Australian Government more than $70 billion each year and this relentless growth in recipient numbers is not sustainable.

“We want a welfare system that is fair, simple and affordable—a system that targets payments towards those most in need and supports people who can work into employment.

“That’s why I’ve asked my department to review the social welfare system.”

The Not for Profit sector is cautiously optimistic about the review.

“I think the whole Not for Profit sector welcomes any review that better addresses the needs of Australia’s most marginalised people – if that’s the purpose of the review,” Community Council for Australia Chief Executive Officer David Crosbie said.

“What worries the sector is when the Government uses a review as a smokescreen to implement changes that have already been predetermined.

“This really is the first major review and we hope they adopt a consultation process that has genuine respect for the knowledge and expertise within the Not for Profit sector.

“It doesn’t matter what government of political party it is, it’s how the government engages and how they consult that’s critical in an effective working relationship between the Not for Profit sector and the government.”

Maree O’Halloran, President of the National Welfare Rights Network, said much had happened since Patrick McClure led a welfare review for the Howard Government in 2000.

“The social security landscape has changed dramatically since McClure’s report in 2000, with large numbers of people with single parents and people with disabilities on a Newstart payment of little more than $35 per day, a costly income management regime and decisions about payment increases seemingly made on the basis of who is the most deserving,” she said.

“Australia needs both a simpler and a fairer policy framework for improving participation and lifting people out of poverty.

“It is critical that the Government work closely with the community sector to get this important reform right and that people directly affected by any changes are heard in the reform process.”

National welfare peak body ACOSS says the review is welcome as long as it is open and transparent and results in positive outcomes for all people.

“We want to get around the table with the Minister to discuss what to do to make the welfare system work,” ACOSS CEO Dr Cassandra Goldie said.

“The challenge is to find ways to make sustainable budget changes.”