Can Australia afford welfare reform?

The Federal Government recently announced an underlying cash surplus of $4.3 billion, fully $1.5 billion more than expected in the Budget. Access Economics followed with a warning that it would be "too risky" to spend it on areas of need.

So, apparently, it's "too risky" to spend the surplus on health, education or public housing as it may fuel inflation or affect our dollar. If some are arguing we can't spend it now … when exactly can we spend it?

There is no doubt that deregulation, globalisation, and increased competition are here to stay. As our economy opens up, we see a greater and greater gap between those who are very comfortably off and those who are struggling to survive.

The only way to reduce poverty, to reduce the pressure on those who have been left out of the new economy is to ensure that they have an adequate income, adequate housing and can access quality education and health services.

Clearly, on all these fronts, this Federal Government is quite unwilling to act. It prefers to listen to economists who talk about debt reduction, and caution us that the economic settings have to be right.

But in Australia we have done virtually everything the markets have required of us. We have reformed the workplace, we have reformed the tax system, we have slashed spending and we have reduced the public debt to levels below that found in almost all other OECD countries! We also have one of lowest taxation regimes in the OECD.

So now that we have achieved all this, when can we expect this Government to reorder its priorities to ensure support for those who need it most?

We now find ourselves in an Australia that is moving further and further away from the concept of a "fair go" for all. We are being driven toward the American model where if you can afford to go private for your family's health and education and you can afford a mortgage, then you're fine. But if you can't afford to look after yourself, then you are left with a run-down, poorly resourced, poorly funded residual system.

Australians are being left at the mercy of an income support system that is unjust and fraught with risk and increasingly based on the dubious principles of "Mutual Obligation" and "value for taxpayers' money".

No government, state or federal, can argue that it lacks information. Excellent, up-to-date research is readily and constantly available.

Governments cannot argue that they do not know that the public education system is under enormous financial pressure. They can not dispute the fact that more kids are leaving school without having completed their secondary education. The statistical data shows these things clearly.

In my home state of South Australia, the retention rate in public secondary schools in 1999 was 58.1 per cent while in the private system the retention rate was 87.1 per cent.