Government to ‘Revolutionise’ Approach to Welfare Spending

The Coalition has revealed a new plan for social security spending with the aim of ending welfare-dependency among at-risk groups, but it has already drawn criticism from community organisations.

Social Services Minister Christian Porter, who will provide further details at the National Press Club on Tuesday, said in the past welfare was simply about spending money.

He said the new approach would spend money in a targeted way to help people end their welfare dependency. For the first time, the government will use data to evaluate which programs result in successful outcomes for welfare recipients.

The government said those programs which are not successful would be discontinued.

“True welfare reform is about much more than making the budget numbers sustainable, however important that sustainability might be to the next generation,” Porter said.

“The data we have now assembled tells us that in too many areas the welfare system is not making life any better for the Australians caught in that system and too often it seems to make life worse over the long run.

“There is absolutely nothing morally superior or progressive about just applying more money to more of the same approaches where they don’t seem to be working without trying something different.

“Breaking entrenched cycles of welfare dependency will require a move away from the idea that it is good enough just to provide entire classes of welfare payments without actually bothering to make a clear and honest assessment about what else might be needed to really improve individual Australian lives.”

The first stage of the Australian Priority Investment Approach to Welfare, announced in the 2015/16 budget, focuses on young carers, young parents and students.

Future iterations to be released over the next three years will target other specific, at-risk groups.

The Coalition said access to “unprecedented levels of data” and predictive modelling on how people move in and out of the welfare system showed there are significantly poor outcomes for young people.

For 11,000 young carers, it is expected, on average, they will access income support in 43 years over their future lifetime.

More than 4,300 young parents are expected to access income support for 45 years over their future lifetime.

A small group of 6,600 students are also expected to access income support for 37 years over their future lifetime.

Overall, the analysis shows the total estimated future cost of the welfare system for Australia’s current population is $4.8 trillion.

Porter said there was a “moral imperative” to move away with approaches that “just say spend more money” without making lives better.

“The foundation measure of success going forward must not be whether more people get more money but whether we can change the system for key at risk groups to improve individual’s prospects for a better life made meaningful by employment, community contribution and self-reliance,” Porter said

“We already spend $160 billion [a year] on direct welfare payments and what this new data is telling us is that for too many people inside the system the money flows but nothing changes and lives are not improving.

“The key has to be new programs, new approaches and new rules designed to target those groups that the evidence shows have been passively in receipt of welfare in a way that has developed into long term dependency for them and often for their children.

“The data we have points to the obvious fact that something must be done. We must move away from entrenched parts of the system that have seen the passive receipt of welfare rob people of the challenge of finding and maintaining employment that allows them to contribute to their communities and their families.”

Part of the government’s investment approach, which was recommended by the McClure review, includes a $96 million Try, Test and Learn fund, for the social services sector, academics and other stakeholders to put forward ideas.

However, community service organisations have expressed concern about the government’s approach.  

CEO of St Vincent de Paul Society Dr John Falzon said the government had the “wrong starting point” for assessing welfare dependency.

“We are beginning from a false assumption that unemployment is a personal choice, that poverty is a behavioural rule or structural or social issue,” Falzon said on the ABC Monday night.

“Secondly, if we are serious about getting people into jobs, let’s look at the job market rather than looking at individuals and pretending that the deficit lies with them. Let’s look at the deficits, let’s look at the failures in the labour market and let’s not dress up a labour market failure as a personal failure.”