January 28, 2014

The view from Billinudgel

Is Australia’s social welfare bill unsustainable?

By Mungo MacCallum

Australia’s social welfare bill is unsustainable. Everyone knows it, and what’s more it is going to get more unsustainable as the population ages and a smaller proportion are actually in the workforce and paying taxes.

So clearly something has to be done about it, and cometh the hour, cometh the man – the man being our seriously unlovable Minister for Social Service, Kevin Andrews. Andrew said it again just last week: the relentless growth in spending on welfare is unsustainable. So which bits is he going to cut?

Well, obviously not parental leave – in fact Tony Abbott’s pet scheme is set to add a few extra billions to the bill. And the government has already promised to scrap the means test on the health insurance rebate, which gives it another hefty boost.

But perhaps we could start with some of the hand outs of the Howard years, the family tax benefits that go mainly to those who don’t really need them, the archetypal middle class welfare? No, perhaps we couldn’t, because that would make an awful of Coalition supporters very unhappy indeed.

So we’ll turn to the pensioners. The obvious targets are the aged pensioners, who cost as much as the rest of them put together. But they are a strong voice, and what’s more they overwhelmingly vote for the Coalition.

So we’ll move on to the powerless, the disabled and the unemployed. Surely they could do more to pull their weight. We can’t actually reduce their pensions, particularly not  for the unemployed (who now include single mothers); they are already scraping along on the poverty line.

But we can make it harder for them to get anything at all. Currently the unemployed only have to apply for work within a ninety minutes travel of their place of residence to get the dole; we could scrap that piece of molly coddling, although since unemployment overall is predicted to rise, it mightn’t actually save much.

And the disabled – well, some of them are only a bit disabled. There would have to be some work they could do. For instance, almost all of those who have mental disorders have some lucid periods – surely they could take part time jobs? It might be a little hard to convince employers to take on staff who are likely to fly off the handle at any minute, but it could be worth a try. 

But really, messing around with those already on benefits is a bit too risky; instead, we’ll concentrate on making them harder to get for new applicants. From now on the rules will be stringently applied. And if that adds, to overall homelessness, poverty, crime and misery, well times are tough. As everyone knows, Australia’s social welfare bill is unsustainable.

But is it really? The OECD, which has no reason to fudge the figures, says that the average level of spending on welfare last year among its 34 industrialised members was 13 percent of national economic output. For instance Britain spent 12.2 percent, and the United States, normally seen as a brutal, uncaring country where welfare is concerned, spent 9.7 percent. In Australia the figure ws just 8.6 percent – ahead of only Iceland.

Crisis? What crisis? But Australia’s social welfare bill is unsustainable. Everybody knows it.

Mungo MacCallum

Mungo MacCallum was a political journalist and commentator. His books include Run Johnny Run, Poll Dancing, and Punch and Judy. Much of his work can be found here: The View from Billinudgel.

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