Disability support pension and Newstart to be main focus of reforms, says social services minister Kevin Andrews

This article is more than 6 years old

This article is more than 6 years old

Australia’s welfare system is to be overhauled, with only the age pension exempted from potential reforms announced by the social services minister, Kevin Andrews.

Andrews has used the latest figures available, 2012’s statistical overview of income support customers, to label the country’s welfare system “unsustainable”, the Australian reports.

The two main areas of focus of the welfare reforms are the disability support pension – which he labelled a “set-and-forget payment” – and Newstart, with the government looking to move people from the payments into the workforce.

“Work is the best form of welfare,” Andrews said.

The proposal has been labelled “ideologically driven” by the chief executive of the national council of St Vincent de Paul society, John Falzon.

The overview shows the number of people receiving government payments in 2012 was 5,033,323, with the age pension making up almost half that number at 2,282,592, though Andrews has ruled out changes in that area.

He compared Australia to European countries in recession, saying the country risked the same fate if welfare was not reformed.

“The context of this is we have a rapidly ageing population in Australia and that means in the future there will be more people who are dependent on income support payments and it also means we also see a very substantial shrinkage in the workforce,” he told ABC News 24.

“The combination of those two things places additional pressures on the country and additional pressures on the economy, so it’s prudent for the government to look at welfare and to ensure it is sustainable, otherwise we will find ourselves in the case of some of the European countries at the moment where their welfare system has become unsustainable.”

Andrews has quietly extended the deadline of a review of the welfare system, saying he expects it to be completed at the end of February. He said in December, when it was announced, that it would be done within a month.

Falzon said while he broadly supported a review of the welfare system, focusing on reducing the amount of cash spent on it would come at the expense of long-term objectives such as reducing unemployment.

“It’s always been therapeutic for welfare bashers to put in the boot to people who are excluded and blame them for their exclusion from the workforce,” he said, adding: “It’s irrational and ideologically driven to say we need to reduce cash welfare payments and we know it’s complete hype the Newstart employments have ballooned.”

Falzon said the government needed to work with businesses in areas of high unemployment and provide adequate support for people when they are outside the labour market.

He said he supported the proposal to introduce universal payments topped up as people needed but on the condition the base rate was “reasonable”.

“There is very little political courage or will to act on the woefully low Newstart payments,” he said. “It is seen as somehow soft.”

The number of people on Newstart grew from 527,480 in 2011 to 549,773 in 2012. In 2002, 554,821 claimed the allowance.

The 10-year low for people claiming Newstart was in 2008 with 399,401. Within a year it had risen to 520,194 as the effects of the global financial crisis hit Australia.

The figure would be much larger today as more than 80,000 single mothers were moved to Newstart from the higher single parents’ allowance in January 2013 under the Gillard government.

Andrews has ruled out retrospective changes as part of the reforms and though the Commission of Audit has the authority to examine the welfare system, most of the changes will be flagged in the review.

“This is not about tossing people off welfare who are there at the present time, it’s about recognising the reality the population is ageing, that carries with it a number of very significant consequences for Australia in terms of a greater number of dependants, particularly older dependants, and a shrinkage in the growth of the workforce,” he said.

When asked how cuts to welfare because of budget constraints fitted with the Coalition government’s expensive Paid Parental Leave policy, Andrews replied it was not a form of welfare.

“The paid parental leave scheme is a workforce-related entitlement and it does address the very thing I’m talking about,” he said. “What we need in Australia in the future is two things, we need more workers and we need obviously to maintain the birth rate.”

Among the reforms flagged by Andrews is not allowing people claiming Newstart to turn down a job if it is more than 90 minutes away. He had already spoken about possible reforms to the disability support pension which would include reviewing payments to people under 40.

He says another proposal is for one universal welfare payment with top-ups for different levels of need, but that this is a long-term option.

Andrews has estimated the cost of Australia’s welfare system at $70bn and ruled out returning single mothers with children older than eight to the single parent pension, saying there was too much debt.

The former Mission Australia head Patrick McClure, who reviewed welfare for the Howard government, is overseeing the review.

The welfare figures include people on the age pension, the disability support pension, sickness allowance, the widow pension, wives’ pensions (where the partner is on the DSP or age pension), carer payments, Austudy, Abstudy, youth allowance, Newstart and parenting payments.