Welfare Reform in Australia: Labor's view

This has had clear consequences: more children living in poverty, more children growing up in jobless families, continued growth in numbers on disability and single parent pensions, the unemployed spending longer on benefits - all at a time of record economic growth.

Making work pay

To complement this investment in capacity-building programs, we also need to make sure that work is fairly rewarded when people get the job they have been chasing. This is where tax credits and work bonuses are important.

Tax credits ensure people don't lose so much of their wage in tax and lost social security payments that they are no better off working. Employment Bonuses also provide a significant boost to the long-term unemployed because they reward people who get a job and stick at it. This is one area of the McClure Report the Howard Government was very quick to rule out, which was a bad misstep.

A recent review of in-work benefits in the UK, US and Canada published by the Oxford Review of Economic Policy, noted these effects with particularly positive outcomes for jobless families. Some commentators in the US believe the earned income tax credit is the most important single influence in the decline in the welfare rolls.

This runs contrary to the opinions of hardliners like Laurence Mead, who was invited to Australia recently by the Government. For him, punishment and compulsion are the keys to welfare reform. This is wrong, and to the extent the Howard Government follows this path, it will find itself in a dead-end.

Making work possible

Parents, particularly single parents, know that better incentives go only part of the way. Making childcare more affordable is also an essential part of addressing employment barriers.

While there has been a slight increase in assistance since July it has only partially offset the damage over the past few years. For example, while out-of-pocket childcare costs have been estimated to have fallen by 15 per cent since July, they rose by 27 per cent in the previous four years, after significant government funding cuts to childcare.

Labor's focus will be on providing affordable, accessible, quality child care that helps families earn and keep extra income while reassuring them that their children are well cared for. We will do this not just as a welfare-to-work measure, but as a key plank in the Knowledge Nation vision for the future.

Child care is as much about early childhood development as it is about welfare to work.

Work and Family