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Some shake-up in social services

3 May 2016

The Turnbull Coalition government’s Federal Budget argues that unemployment is set to decline, causing a drop in government spending needed on social services payments.

It comes in the midst of the government arguing it will provide programs that will assist young people find job opportunities and a ‘sustainable welfare system’.

Hidden in the budget is a projected $250 million decrease in student payment costs and $700 million decrease from working age payments over the next two years.

The Coalition government has framed social services for young people in this year’s Federal Budget in terms of pushing those who are able to into work. Notably, its widely pushed Youth Jobs PaTH program, into which it has invested $840 million, aims to help up to 120,000 young people find jobs over four years.

For those unable to find employment, the outlook is not so positive. In his post-budget press conference, Minister for Finance Scott Morrison declared, “If you don’t have a job, you’re not better off. And what we’re doing tonight is ensuring that people have more confidence that they can get into jobs.”

Both the Newstart Allowance and Youth Allowance payment schemes face major decreases over the next two years. Newstart is projected to decline in costs from $9.9 billion in 2015-16 to $8.8 billion in 2017-18, and costs for student Youth Allowance are projected to fall from $2.5 billion in 2015-16 to $2.2 billion in 2017-18. However, at the same time costs to the Student Start-up Loan are projected to increase by $80 million.

This two-year projected decline in funding, and subsequent increase again, is due to a range of potential factors. Projected declining unemployment is the major one. But another is compliance with measures from the 2015-16 Federal Budget measure titled Strengthening the Integrity of Welfare Payments and the measure developed at the Mid-Year Economic and Fiscal Outlook, Enhanced Welfare Payment Integrity.

 

The keyword in this year’s social services budget is ‘integrity’. The integrity of Australia’s welfare system must be protected, lest it be abused, the government argues. Increased integrity of the system will create savings to contribute to more sustainable welfare programmes, it says.

In November 2015, the Taskforce Integrity was established, aimed at targeting welfare fraud.

In order to maintain the ‘integrity’ of the welfare system, the Coalition government is continuing its progressive replacement of Centrelink’s ageing technology platform with a new welfare payment information and communications technology system. This was described as the first step towards a ‘newer, simpler and more efficient system’ in this year’s budget briefing papers.

 

For students who have had to wait as long as five months for their Centrelink payments to be processed, this may seem like a god-send. However, it’s doubtful that it was the students’ pleas of reform to the Centrelink system that the government heard when they came up with this policy. The statement goes on to detail how this new system will ensure that welfare recipients do not ‘unintentionally incur debts to the Commonwealth by under-estimating their income’. And furthermore, it will ‘identify people who make false declaration and ensure that Commonwealth debt held by individuals is more effectively recovered’. 

At the same time, the Turnbull government is poised to review the claims of up to 90,000 current recipients of the Disability Support Pension (DSP) as to their capacity to work. There will also be up to 30,000 Disability Medical Assessments for current DSP recipients considered to be a high risk of to being eligible for the payment. This is estimated to save $62 million over five years, which will instead be invested into the National Disability Insurance Scheme Savings Fund. This fund was set up to ensure that the National Disability Insurance Scheme, established in 2012 to provide services for people with significant and permanent disability, will continue to receive funding separate from future Federal budgets.

Other savings measures proposed by the budget are also predicted to hit those from lower SES backgrounds the hardest. The closure of carbon tax compensation to new benefit recipients after September 2016 will, Scott Morrison admitted today, hit low income earners harder. Similarly, the increase in smoking tax by another 12.5% will most heavily impact smokers, who predominantly come from lower income backgrounds.


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