A wide-ranging review of Australia’s welfare system – to stop what Social Services Minister Kevin Andrews has called “unsustainable” spending – is likely to make it tougher to qualify for government payouts, and fix the imbalance between Newstart and the Disability Support Pension.
Mr Andrews says that income support – which is currently costing the government $70 billion a year – is unaffordable in the long-term and overdue reforms are needed.
However the minister has sought to allay concerns over the age pension which cost $36 billion in the last financial year, saying the pension would not be examined in the review.
The review team led by former Mission Australia chief Patrick McClure is likely to put the Disability Support Pension (DSP) and the Newstart allowance high on the reform agenda.
Last week, the reviewers held ‘soft’ consultations in Melbourne with the community sector, with Guardian Australia reporting that stricter conditions on carer pensions and single mother payments – as well as changes to youth payments – are being flagged as likely recommendations.
The Abbott government has also flagged plans to send unemployed people on benefits into aged care homes to help with maintenance as part of an enhanced ‘work for the dole’ scheme.
Meanwhile the government is looking at reforms implemented in other OECD countries as a possible model for Australia.
In 2013 New Zealand completed a raft of changes to its welfare system, which include ensuring all sickness beneficiaries, sole parents and widows without children under 14 seek full-time employment like other unemployed people.
New Zealand has slashed $4.4 billion off its welfare budget and its citizens are spending less time on welfare as a result of the changes.
With one in five Australians receiving an income support payment, Leader of the Opposition Bill Shorten has voiced concerns over the government’s plans.
Mr Shorten, who has said he would take a constructive approach to possible budget cuts, claimed the government had the age pension in its sights.
“The Abbott government is proposing to reduce the rate of increase of the age pension,” he told Sky News.
It is an accusation firmly denied by Minister Andrews – who says the age pension and family tax benefits will be quarantined from the review.
Some commentators suggest that through the review the coalition has acknowledged what Labor refused to acknowledge when in government: that having Newstart and Disability Support Pension indexed at different rates is unsustainable.
Opposition Federal MP Maria Vamvakinou concedes the point. “You’d have to agree with that sentiment,” Ms Vamvakinou told Neos Kosmos.
“There was a lot of debate when we were in government that Newstart was very low. It was a difficult area for us. There’s no doubt that being indexed so vastly different, it’s something we need to acknowledge,” said Ms Vamvakinou.
“It provides an incentive for people to try and put themselves under disability support. We need to look at that.”
The federal member for Calwell says increasing Newstart allowances must be a priority.
“We need to acknowledge that unemployment benefits under Newstart are not viable for people to be on. This review is going to require the government address the gap between Newstart and the Disability Support Pension.
“Any government would have to look at that. These are decisions that are going to have to be made,” said Ms Vamvakinou.
Jenny Mikakos, Victoria’s Shadow Minister for Seniors and Ageing, and Community Services – who has been highly critical of the Napthine government’s reforms in relation to the privatisation of residential care facilities, said: “Liberal governments always target those who can least afford it: the elderly, migrant communities, the disadvantaged, single parents or the unemployed. Tony Abbott is no different.”
The welfare reform review is due to be handed to the federal government in February.