Welfare reform should involve greater investment

By Lin Hatfield Dodds
National Director of UnitingCare Australia

People in politics like to quote an old German Chancellor, Otto von Bismarck, who famously said that laws are like sausages. If you want to respect them you should avoid seeing how they are made.

The welfare system is like von Bismarck’s sausage. A range of good intentions have been ground together with economic imperatives, political trades and other agendas over many years, leaving us with a system that is not fit for purpose. The good news is that momentum is growing for thorough reform.

Last year, the federal government announced a welfare reform review, the conclusions of which were announced earlier this year. A range of recommendations were made to create a simpler, fairer and more adequate welfare system. The 20 payments and 55 supplements in the current system should be consolidated into five primary payments, jobs plans should be created, and people should be able to understand and know that there will be financial rewards for work.

These ideas are timely and needed. But perhaps most encouraging among the recommendations was an unexpected one that welfare agencies have been suggesting for a long time – a mechanism for ensuring welfare payments are adequate.

Currently payment levels for different types of welfare vary greatly and for some people – particularly those on Newstart – they are simply too low. In 2013 a UnitingCare Australia report found that the majority of people seeking emergency relief and financial counselling from UnitingCare agencies throughout Australia were recipients of Newstart Allowance, and were unable to afford food and energy bills.

People accessing welfare are, by definition, in the midst of challenging times. The entire premise of welfare is that it is a supportive, reliable safety net. Payments should allow people to cover their basic expenses and to participate in the community. If these things are not possible, disadvantage will deepen.

The welfare reform review has recommended that payments should be set according to cost of living and community standards and should be adjusted to keep in step with changes to these two things. This recommendation is key to a better system. Beyond that, as the welfare review acknowledged, significant additional support is needed for the most vulnerable people who will not achieve independence easily. While welfare can be a short term safety net for many people, there are many others who must not be overlooked.

Social exclusion emerges from multiple interlinked problems. A lack of money and material wellbeing is one part of the picture but alongside it often lies unstable housing, broken relationships, crippling addictions and little education. For the most vulnerable people, fear of failure and loss of hope are the heaviest of burdens that first need to be lifted.

Throughout Australia, 44,000 young people under 25 are homeless and 13 per cent of children live in a household with at least one parent who misuses alcohol. Two thirds of homeless youth spent time in the out-of-home care system. Trauma and rejection will be part of these people’s stories. There is no government fiat that will address the deeper issues that lie beside and beneath the welfare system. For decades, the Uniting Church has been responding to these challenges and our UnitingCare agencies are part of the legacy of that response. The challenge ahead belongs to us as much as to the government.

In the past year, two pathways for welfare reform have been articulated from Canberra. Both pathways aim for the same goal – more people flourishing, participating in the workforce, and supporting themselves. The first pathway was outlined by the government last year in the May federal budget, where they announced longer wait periods for some welfare payments and tougher conditions on people needing to access welfare. The other pathway was articulated by the welfare reform review which said that the road to change involves investing in people and building their capacity.

Our nation will be significantly shaped by whichever road is chosen. Cutting payment periods and making welfare less secure will not provide people with the support they need to move forward. In contrast, the ideas contained by the welfare reform review have the potential to make a significant, positive difference.

Ultimately, welfare is about more than just payment structures, tax rates and incentives. It is about replacing fear with hope. The Church knows how to do that work.

When the Uniting Church first formed, we pledged ourselves to “hope and work for a nation whose goals are not guided by self-interest alone, but by concern for the welfare of all persons everywhere.” Whatever welfare track is taken by the Government, this continues to be our task – to extend hope and build a new future in contexts that badly need it.

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