Ideas@TheCentre
Tough on welfare but light on detail
Being tough on welfare is back in vogue. Gillard’s doing it. Abbott’s doing it. If you’re a politician and you have a pulse, it seems Centrelink is in your sights.
‘Mutual obligation,’ ‘conditional welfare,’ and ‘welfare to work’ programs, which were riven with controversy only a few decades ago, are now openly embraced by both sides of politics. Where Labor once decried the welfare reforms of the Howard era as cold-hearted and counter-productive, it now positions itself as the party of ‘work not welfare.’
The shift is partly opportunistic. Crackdowns on ‘dole bludgers’ have always held popular appeal, and provide a handy way for Labor to convince the (largely conservative) electorate they are not beholden to the Greens.
But it is a real shift in policy too. Fifteen years after the reform process began, it is clear that – along with good economic conditions – tougher welfare policies have produced real (although not universal) results.
The number of prime-age households (in their mid-30s to mid-50s) reliant on welfare has fallen from about one in six in the mid-1990s to one in 10 in the late 2000s.
Despite this, the government is right to focus on further reform.
Around two million working age Australians still rely on income support. While the unemployment rate is falling, a substantial number of long-term unemployed remain.
Nearly 800,000 people rely on Disability Support Pension (DSP). Despite attempts by both the Howard and Rudd/Gillard governments to halt growth of the payment, the number of recipients has soared. Applications grew thanks to the spike in unemployment in 2008–09; as with previous recessions, the number of recipients has not subsequently come back down.
Efforts to get more single parents into work have been quite successful, but a stark divide still exists between households where there are two adults with jobs, and households where there are none. For the one in eight Australian children who grows up in a jobless family, the threat of intergenerational transmission of welfare dependency is very real.
But Gillard’s pronouncements on welfare reform have so far been largely rhetorical. In a policy environment that is so complex, the devil truly is in the detail.
Welfare reform is important, but it will be a long, difficult road ahead. It is unlikely that changes will produce significant and immediate budget savings. Some policy fixes may even cost more in the short term.
Welfare reform may be in vogue, but motherhood statements are not enough. Let’s hear the detail.
Jessica Brown is a Research Fellow at The Centre for Independent Studies.
