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.

Does the Government choose to look at where basic needs are not being met and put better, more appropriate policies and funding in place? No - it pushes millions more of taxpayers' dollars over into the wealthy end of the private sector.

The research done in the housing area supports what renters, welfare groups and church groups have been saying for years: the private rental market is not for those on low incomes.

And on income support - again we have the research, from both here and overseas, that tells us what it takes to properly support those who are not able to look for work or who cannot find paid employment. We can look to Minnesota's Family Investment Program, Wisconsin's New Hope Project and Canada's self-sufficiency Project - which are all working well.

These programs have achieved great success in increasing the earnings of the long-term unemployed. More importantly, these programs have consolidated people in the labour markets. The programs address the impediments to employment, offering strong incentives to take up full time work with a judicious mix of direct cash incentives, individualised training, personal counselling, transport and child-care assistance.

The Federal Government's language when it comes to welfare reform is worrying. When launching the McClure Report, the Minister for Family and Community Services, Senator Jocelyn Newman, stressed the need to ensure "value for taxpayers' money."

The reality is that this government is specifically and deliberately targeting the least skilled, least educated and the least powerful group in society.

Many people in this broad category suffer from undiagnosed and unacknowledged mental illnesses. Others do not have secure housing - and among other things have little hope of receiving any mail at all, let alone the letter from CentreLink. Some have drug and alcohol problems. Some are simply young kids who have left school early and do not have the necessary literacy and organisational skills - and the personal assertiveness needed to find their way through the system.

These are the most marginalised Australians and most are among the poorest members of this society. They often come from migrant or indigenous communities. And quite coincidentally, they are the group least likely to vote Liberal, if they vote at all.

About 50 per cent of young people in my home state are being 'breached' off their income support payments - in part or in full. In the past three years, under the guise of 'promotion of equity', this government, with the support of others in the Senate, has introduced the Common Youth Allowance, which resulted in the reduction or cancellation of payments to 46,000 18-to-20-year-olds.

If that is not enough the Government has also:

• increased waiting times to two years for migrants;
• stopped so-called "illegal immigrants" who have been granted temporary refugee status from accessing almost anything; and
• reduced payments to over 200,000 unemployed on a "one strike you're out" basis.

And these sanctions are not limited to younger people. In 1999/2000 Centrelink breached 4,527 people over the age of 50, and 129 over the age of 60 for minor indiscretions such as not replying to a Centrelink letter.

The Democrats have just come across a letter that will lead to aged pensioners being breached for not checking their eligibility for overseas pensions.

Yet another piece of evidence that the Government will not be a willing partner in finding a formula that works for those Australians that need assistance comes from Minister Tony Abbott. His recent attack on St Vincent de Paul, asserting that it is not qualified to take part in the debate on welfare, just to deliver it, was another astonishing government statement.

My colleague, Senator John Woodley, a Uniting Church minister himself, pointed out that, as a former catholic seminarian, Minister Abbott should have remembered that the Gospel says: "I was hungry and you fed me" - not "I was hungry and you asked me to fulfil the mutual obligation policy".

This government believes that Australia's charities can and should work at the coalface - do the hard yards to deliver welfare support on the ground - but under no circumstances are they to be involved in the debate. The policies of the Federal Government seek to shift income support from the government arena to the family and community. The clear message is that people ought to be relying on the charity sector, rather than relying on any right to a minimum income.

By ruthlessly cutting benefits, this government's policies simply drive people deeper into poverty. This is a clear move to charity-based, privatised welfare systems akin to the 'poor law' system in 17 - 19th century England where the focus of help was the family and parish rather than the State.

A survey of 20,000 people, conducted by the St Vincent De Paul Society, found that as people are forced to live for long periods with less payment, or no payment at all, the burden of welfare support simply shifts from the government to charitable organisations like St Vincent De Paul. Charities simply can not cope with demand.

The evidence is clear and the government must be aware of it. A substantial group of Australians is being left behind. The Democrats do not and will not accept that we cannot afford quality public housing, public education and public health systems, or a strong income support system. We can. If we don't it is a political decision, not an economic one.

The 'average Australian' must be convinced that it is fair and reasonable to ensure all Australians have access to a basic income. We must show clearly that all of us are ultimately the losers if some Australians cannot put food on the table or be sure they will have a roof over their heads.