MAXINE McKEW: The Federal Government is proposing a major overhaul of the social security system aimed at simplifying the welfare maze and making work more attractive than welfare for those on benefits. In launching the consultation paper today, Family and Community Services Minister Amanda Vanstone says she wants to "reignite the flame" for work that is lost when people are unemployed for a long time. With 2.8 million Australians currently on 15 different welfare payments, reigning in the system has obvious benefits. Senator Vanstone joins us now in our Canberra studio with political editor Fran Kelly. FRAN KELLY: Minister, you made it. This is a major upheaval of the social security payment system being proposed here. What will people gain from it? SENATOR AMANDA VANSTONE, FAMILY AND COMMUNITY SERVICES MINISTER: Well, it's not a major upheaval. There's a suggestion we might need to have a major one, but we can come back from that and have a medium upheaval or a small one. What's very clear is we need to reform the welfare system. It's not rocket science but it is far too complex and messy and there are disincentives there that are very difficult for people to get over to get back into work and we want to make the system much more active. It's far too passive a system at the moment so it needs reform. What we've done is release a discussion paper to promote wide discussion in the community, not just amongst the welfare sector, but the changes that might need to be made. FRAN KELLY: The end game, as you say, is simplification. One plan is to come up with one base payment for all the welfare payments currently in place. The big question is - would you take that base up to the level of the big question is - would you take that base up to the level of the pension or down to the level of the Newstart allowance, because there's about $40 difference between them? SENATOR AMANDA VANSTONE: Well, if you had a base payment you'd have top-ups of course for special need, like disability participation allowance, there's a range of top-ups that you'd put on. I think it's fair to say that if anyone believes we can get uniformity in the welfare system by shifting everybody up to the maximum payment, then they're on some sort of substance that is probably illegal to import they are on. FRAN KELLY: It's not like the maximum money payment. Wouldn't that be one way to reignite the flame for people getting into work, I think is the term you used. The pension, for instance, has a bigger tax-free threshold. That would be one way of encouraging people on the dole into work, if they could work more hours without losing it all in tax? SENATOR AMANDA VANSTONE: It would be a range of things we'll need to look at. As I said earlier, the concept of putting everybody up on to the highest payment is just not on. There's no point in misleading people about that. It would cost a fortune. Australia doesn't have that kind of money. And in any event, there are differing people on differing levels of need, and you wouldn't necessarily want them all to have the same. You'd have the same base payment but then with differing top-ups. FRAN KELLY: Let's switch this around, though. Can you guarantee that nobody would be worse off under a new simplified base payment? SENATOR AMANDA VANSTONE: We've made it very clear that this isn't an exercise about cutting welfare payments. It may well result -- and I hope it does result -- in a reduction in welfare outlays, but only because people move into work. That's what we're looking at. We've allocated 1.7 billion to welfare reform in the last Budget. We hope that comes down to a net spend of under 1 billion. How? Basically by people returning to work. FRAN KELLY: Try to get people to return to work - isn't it simply - one way of looking at it, is simply to make the gap between welfare and work bigger, and doesn't that mean you could either be talking about raising the minimum wage or lowering social security benefits? Really isn't it simple like that? SENATOR AMANDA VANSTONE: No, it isn't that simple. They are two simple things you could look at doing. But - FRAN KELLY: Do they have merit? SENATOR AMANDA VANSTONE: We've chosen a different path. We've chosen the path of mutual obligation, to insist that when people are getting some form of welfare they have to do something. Work for the Dole is a classic example of that that's actually turned out to be fabulous for the genuine people who are looking for work. It gives them more enthusiasm, gives them some experience, often gives them a greater network of friends and contacts to find work. But it's not at all good for the sort of person, or not welcomed for the sort of person not terribly keen on getting a job because they don't want to do anything extra. So Work for the Dole works really well for people genuinely looking but creates a disincentive for the non-genuine people. There are other ways that you can make being on benefits unattractive for the people who aren't genuine. FRAN KELLY: One proposal in this paper - it discusses actually lowering the minimum wage and topping up that wage. The idea being that would create more jobs, employers would take more people on, but you top up their low wages with some kind of social security payment. Isn't that just going to create a pool of working poor? Is that a good idea? SENATOR AMANDA VANSTONE: I think in relation to anything that's raised, either directly in the paper or in the consultations, it's just not appropriate for me to put a view in advance. What we are trying to do here is go to the basics of how the democratic system is meant to work. Everybody gets included, everyone has a say. Those views are considered. That might not then need to be refined. We might need to have another round of consultations after this. So I don't want to pre-empt any particular views. We live in a democracy. I'm happy to listen to all views. FRAN KELLY: You've not been going too well though, have you, so far on your welfare reform. The first round languished in the Senate for a long time -- I think that might have been the vote we just had. And the opposition parties in the Senate were holding back and blocking the bill because they think you your breaching regime is too tough. Why do we have a penalty regime for our social security recipients where they get whacked more for missing two job network appointments than somebody does for a drink driving offence? Why is that fair? SENATOR AMANDA VANSTONE: Let me say the breaching arrangements we have are much less than Labor had under Working Nation. They didn't apply them of course, they were slack on compliance, but the penalties were higher than the penalties we've now got. The penalties we now have were agreed to by Labor and the Democrats, but in any event, we've significantly reduced some of those and taken very special care in the last 18 months to look after vulnerable job seekers and that's appropriate. Some people don't want to admit, for example, that they didn't make an appointment because they passed out because they have an alcoholic problem. But that leaves us with a very genuine and effective system because no-one has to be breached. You just have to live up to your requirements. So when you say to me why is it fair to breach people, I would say to you, why is it fair to take welfare and not live up to your requirements? It just isn't. That's the deal. We give you the money to look for a job and you're expected to do that, just as you have to show up. You try not showing up for one of the 7:30 Report's and see if they still welcome you back the next day. FRAN KELLY: Amanda Vanstone, thank you for your time. SENATOR AMANDA VANSTONE: A pleasure. Source www.abc.net.au ###