Australia — THE
complex array of welfare payments could be streamlined
into a single working-age benefit, under a renewed push
by the Howard Government to encourage the jobless,
disabled pensioners and single parents to go back to
work.
Outlining a new "work first,
welfare second" reform push to tackle tax and welfare
disincentives and boost workplace participation,
Workplace Relations Minister Kevin Andrews has also
hinted at further childcare assistance for middle-income
mothers returning to work.
The plan could include stripping
generous childcare entitlements from the unemployed and
low-income single mothers, who can currently secure up to
four days of taxpayer-funded childcare at a nominal rate,
and redirecting support to mothers in the paid workforce.
But aged pensions would remain
protected from the reforms, with the Howard Government's
election promise to index welfare payments to retirees
prohibiting a single system for all.
A discussion paper outlining reform
options to introduce a single welfare payment and
simplify the system would be presented to cabinet in the
new year, Mr Andrews said yesterday.
"There are 2.7 million
working-age Australians currently on welfare
payments," Mr Andrews told The Australian.
"The current system is confusing
and there are disincentives in the system which mean
that even if people want to work, they are not
provided with the incentive.
"If we want to maintain our
economic prosperity, we must boost productivity. And
there's an ethical element to this, which is to assist
people who want to work."
In 2002, the Howard Government
prepared a range of scenarios outlining the effect of tax
and welfare clawbacks.
Tax traps meant a family could be
left thousands of dollars worse off a year if a woman
returned to work part-time, because of increased
childcare costs and the loss of welfare benefits.
Mr Andrews said some welfare
recipients also feared that, under the current system, if
they found work and stopped receiving the pension they
would not be able to reinstate their entitlements if the
job did not work out.
"It would be much better
to have people have a go," Mr Andrews said.
"For the people who are so
disabled they can't work, there's no suggestion they
would be forced to seek employment."
A single welfare payment was first
proposed by the landmark McClure report in 2000,
commissioned by the Howard Government, with a base sum
plus add-ons to reflect personal circumstances.
But the upfront costs of a major
overhaul of the system and a hostile Senate have stalled
the introduction of the last major plank of the McClure
reforms.
Under a recent shake-up of the
ministry, working-age payments including the disability
support pension and the Newstart Allowance have shifted
to the Department of Employment and Workplace Relations
and are the responsibility of Workforce Participation
Minister Peter Dutton.
In an interview with The
Australian, Mr Dutton said he was also keen to boost
training opportunities for mothers returning to work and
to encourage single mothers to move from welfare to a
job.
"We've got disincentives
for middle-income earners in terms of childcare costs
and effective tax rates," he said.
"We want to make sure we have a
system that provides choices for parents - to stay at
home and a choice to make it financially rewarding to
return to work."
Streamlining the system would also
encourage welfare recipients, including disability
support pensioners and single parents who secure payments
through Centrelink, to take advantage of training and
support available through the Job Network scheme.
Mr Dutton said he was also looking
at a pilot program involving a major retailer to help
mothers find work in the hospitality and retail industry.
He indicated that the current
mutual obligation requirements for single parents, which
require mothers and fathers to look for work after their
youngest child reaches high school, were low by
international standards.
A meeting of relevant ministers and
departmental secretaries to discuss the reform options
will be held after the Christmas break.
