DRUG testing for the unemployed and the suspension of payments to people with outstanding arrest warrants are two options to be debated as the Abbott Government prepares a major overhaul of welfare.

Social Services Minister Kevin Andrews declared, “We won’t rule this in or out’’, when asked about drug testing as he flagged a major overhaul based on New Zealand’s radical reforms to break the welfare cycle.

The Abbott Government has confirmed it is looking closely at New Zealand’s “simpler, more coherent’’ system of streamlining payments but it has developed cold feet on the radical option of a single, uniform payment, preferring the New Zealand model of fewer payments.

“Australia’s welfare system is complex and expensive,’’ Mr Andrews said.

“This review will look at welfare reforms overseas, including New Zealand where they have simplified their welfare system by introducing five new payments that replaced 11 old payments.’’

Asked whether the reforms could include New Zealand’s most controversial change, drug testing for the unemployed, Mr Andrews said the Government was not ruling it out.

Two years ago, north Queensland Liberal MHR George Christiansen raised the idea, arguing that many workers were already drug tested.

“If it’s good enough for a hard-working miner, who pays taxes, to undergo a mandatory drug test, then it’s good enough for the person who receives those taxes in welfare,” Mr Christiansen said.

The drug testing of welfare recipients has been attacked as a waste of money by critics in New Zealand for its low rates of positive results.

Of the 8001 jobseekers sent for drug testing, only 22 tested positive to drug use or refused to take tests.

Under the NZ reforms, people who fail a drug test or refuse to apply for a drug tested job, must agree to stop using drugs or their benefit will be cut by 50 per cent.

They are then given 30 days to allow any drugs they have taken to leave their system.

The policy only applies to jobseekers who are available for jobs that require drug testing.

The NZ Government says about 40 per cent of the jobs listed require drug tests.

Those on benefits are sanctioned if they refuse job opportunities which require a drug test or if they fail a test.

Those who fail a test are also required to pay back the test’s cost out of their benefits.