No good excuse for savage cuts IN its quest for budget cuts it seems there is no limit to how cruel the Abbott government is willing to be. Its latest thought bubble - massive cuts to pension payments - also reveals the flawed priorities of this government.
When it comes to finding money, the Coalition will always reach first into the pockets of those who can least afford it.
While the government knows how to talk tough on welfare reform, recent history shows that when it comes to getting results, only Labor can keep our social security system sustainable and strong.
Australians rightly recognise that a fair and sustainable welfare system should be a core part of our society. We are a compassionate people who value a social security system that assists Australians in need.
We also know that where people can work, they should work. Only employment can give people real economic and social security. The social security system should not be a refuge for those who are able but unwilling to work. Rather, it should be an enabler: a springboard for people to get back into the workforce.
When Labor came to government in 2007, it inherited a welfare system that was a mess. The Howard government's Welfare to Work reforms had been an abject failure and middle-class welfare had become the norm. Howard's changes to the Disability Support Pension in 2006, for example, had led to an increase in the number of people on the DSP.
Under Labor, the rate at which people were granted the DSP dropped by more than 22 percentage points.
Not only had the Howard government failed to ensure the wealth generated by the mining boom assisted the most disadvantaged members of our society, it had created a culture of middle-class welfare entitlement. This was clearly demonstrated by its introduction of the Baby Bonus, which had no means test when we came to government in 2007. Handing out money to wealthy Australians is not what the welfare system was designed to achieve.
In the last two terms of government, Labor has been committed to making sure the social security system supports people to transition from welfare into work. This is the best way to help people out of poverty and end the cycle of welfare dependency. Of course, underlying all these reforms was the need to ensure the welfare system could achieve these ends in a sustainable way. That is why we made tough but responsible decisions to reform the DSP.
During our period in government, Labor took a number of sensible decisions to better target the social security system and reduce inefficient expenditure. We abolished the Baby Bonus, means tested the private health insurance rebate, replaced the education tax refund with the better targeted Schoolkids Bonus, tightened eligibility for family tax benefits and increased the age of eligibility for the aged pension.
These difficult decisions have helped to make Australia's welfare system more sustainable. Because of this, we were able to increase support for those who most needed it. We delivered the largest pension increase in 100 years.
Today, Australia's welfare expenditure is one of the lowest in the OECD, accounting for just 8.6 per cent of gross domestic product last year, compared to the OECD average of 13 per cent. We are widely recognised as having one of the most targeted, progressive benefit structures.
Kevin Andrews is trying to scare Australians with talk of a European-type crisis. This is absolute rubbish. This is just an attempt to frighten people and soften them up for drastic cuts.
The Rudd and Gillard Labor governments also designed and implemented long-term structural reforms aimed at enhancing workforce participation.
A major objective of Labor's paid parental leave scheme was to increase female workforce participation. Labor implemented a fiscally sustainable 18-week scheme based on the 2009 Productivity Commission recommendations.
Tony Abbott's proposed paid parental leave scheme will cost $5.5 billion and impose a new tax on business. It will mean highly paid women will get $75,000 to have a baby - paid for by the taxpayer.
As noted in the Productivity Commission's 2009 report, around 84 per cent of women earning high wages already have access to paid maternity leave, compared to only around 24 per cent of women on very low wages. This means Abbott's scheme will be giving the most in taxpayer dollars to those who need it least.
It was also Labor that introduced the National Disability Insurance Scheme. A PricewaterhouseCoopers study found that the NDIS will increase employment participation by people with a disability to 370,000 by 2050. This will increase GDP by almost $50bn by 2050, contributing a further 1.4 per cent to it.
The largest productivity gains from the NDIS will likely come as carers re-enter the workforce. The Productivity Commission conservatively estimated this could result in a $750 million increase in GDP annually.
Supporting parents back to work and people with a disability into work is as important as the payment.
Labor recognises the need to modernise our welfare system to ensure it adapts to the economic and social demands of the 21st century. We need to think about new ways of increasing participation rates of particular groups who remain largely excluded from the opportunities afforded to most Australians.
Making savage cuts that hurt our most vulnerable citizens is not "welfare reform". It isn't fair, and it isn't smart. It won't help people out of the welfare trap, and it won't help them into work.
The Coalition looks destined to repeat its past failures. And once again, it will be people with the least who pay the price.
Jenny Macklin is the federal member for Jagajaga and the opposition spokeswoman on families, community services, indigenous affairs and disability reform.www.theaustralian.com.au/opinion/no-good-excuse-for-savage-cuts/story-e6frg6zo-1226810899286
