Welfare Reform in Australia: Labor's view

Labor's vision for welfare reform is all about opening up opportunities and allowing everyone to have a stake in the wealth and prosperity of our nation. At the core of the challenge we face is the unification of economic and social policy.

It took the devastation of the Second World War to force Australian policy makers to elevate social policy to the same level as economic policy, or more correctly, bend our economic policy goals to the achievement of socially just ends.

The question facing us some 50 years later is when, not if, the devastation of the spread of growing child poverty and an increasing divide between rich and poor becomes so acute that we again put the common wealth ahead of the wealth of the market. We need in particular to see social policy as an issue of hard-headed economics as well as an issue of social justice and equality.

Today, there is one Australian of retirement age for about every five Australians of working age. Assuming current levels of net migration continue in the future, in the year 2021, there will be one for about every 3.5. And by 2051, the ratio will be one for every 2.5.

The demographers rightly tell us not to be too alarmist about this: higher labour productivity makes it easier to support an aging population; and Australia's aging profile is not as extreme as many other countries'. But this does underscore two things: first, we cannot afford to have large sections of the working-age population trapped outside the workforce by a failing welfare system; and second, we need to boost Australia's birth rate to take pressure off dependency ratios in the future.

The two guiding principles linking the social and economic debates must therefore be welfare to work, and work and family. Welfare to work, because it boosts the current working population; and work and family because international evidence shows it is perhaps the most important issue in halting the falling birth rate.

Welfare reform: the McClure report

The Government now has in its hands a directional statement for the reform of Australia's welfare system - the McClure Report. It is a statement Labor has largely endorsed because it points in the direction we believe welfare reform must always point: helping people move from welfare into work.

There are some positive signs in the document produced by the Welfare Reform Committee - its recognition of tax credits, work bonuses, participation supplements, and better case management are all ideas that can make a difference. Properly implemented, this statement will also achieve the other key goal of welfare reform: maintaining a strong safety net for those in need.

If there is a weakness in the Report it is that its loose use of 'mutual obligation' has left the door open for the Government to target some of our community's most vulnerable.

In the eyes of most Australians, this government has gone too far in applying punishments to people on welfare. We don't need to extend such a punitive regime to more groups because one-sided mutual obligation backed by extreme punishments does not help people get work.

We need to re-appraise the level of investment that we make in people. Unfortunately, over the past four years this investment has declined significantly with some $5 billion in cuts to key welfare to work incentives, childcare, and education and training.