Social services minister Christian Porter has signalled that welfare dependency will be a focus of reform. At a recent address at the National Press Club, he introduced a “priority investment” approach, based on predictive models of lifetime income support for specific groups.
Some of the points seem valid, but they are mixed with a few peculiar premises. For instance, it is hard to disagree that increasing welfare expenditure is a concern. But it is being inflated by demographics, not loose income support targets.
The subsets identified in Porter’s speech – young carers, underage parents and students – are small. Whatever support they receive is outweighed by the age pension, which is nearly twice the cost of family payments and more than five times the cost of unemployed assistance.
Part of the reason we are even worried about the size of welfare expenditure is because we have structural revenue problems that the federal government is still unwilling or unable to resolve. It seems disingenuous to problematise income support without also owning the problem of an entrenched system of fiscal incentives for asset-rich individuals.
The Grattan Institute has long been pointing out the necessity of superannuation reform in any budget repair, along with age pension adjustments. The status quo cannot be sustainable, where up to 80 per cent of mature-age households with a net worth of $1 million are eligible for more than $200 in weekly benefits.
While Mr Porter reckons our welfare system does not serve its purpose – that it keeps people from “a life made more meaningful by employment, by community contribution and through self-reliance” – the numbers say otherwise.
According to the recent Household, Income and Labour Dynamics in Australia (HILDA) longitudinal survey, the proportion of individuals aged 18-64 who lived in a household that received income support in 2014 is lower than it was in 2001, at 31.6 per cent from 37.8 per cent. The proportion of the population reliant on welfare for 50 to 90 per cent of their income is also lower. On both measures there has been a trend decline since 2007, respectively down to 10.1 per cent and 4.8 per cent of working-age Australians, despite post-financial crisis unemployment rates.
The level of young, “idle NEETS” (neither in employment, education, training nor looking for work) is the lowest it has been in 30 years.
Such figures might be due to tighter eligibility requirements than lessening need. In any case, government assistance makes a difference: 85 per cent of welfare-reliant people are out of poverty in three years or less. The level of young, “idle NEETS” (neither in employment, education, training nor looking for work) is the lowest it has been in 30 years at six per cent. The drop in absolute poverty from 12.9 to 3.9 per cent (2001-2014) also suggests that the safety nets work.
As Greg Jericho recently put it in The Guardian: “Not only is our welfare system already extremely targeted, as a result of the increasing desire to continually ‘better target’, it means those who remain dependent are almost exclusively the very needy.”
The persistence of such neediness may not actually be an effect of the welfare system but a confluence of other factors – things like job scarcity, low educational attainment, racial or gender discrimination, housing insecurity, poor mental health or trauma, and inaccessible childcare. The minister is perhaps on track in asserting that income support is an inadequate mechanism for empowering people. But it does not necessarily follow that he should then reduce or take it away. For some households, it may be the only thing securing their survival.
Rather than cutting welfare as if that extracts people from disadvantage, what if governments took seriously the cumulative nature of that disadvantage?
What if, rather than framing welfare as a problem of intergenerational dependency, it is framed as a problem of intergenerational mobility?
But of course, politicians could hardly do that. It is much easier to tinker with welfare architecture than overhaul a society that penalises current and future generations with little sociocultural and economic capital.