View from The Hill

View from The Hill

McClure’s Mark 2 welfare blueprint has to contend with toxic political environment

Patrick McClure’s welfare report has been handled badly by the government. AAP/Dave Hunt

Welfare reform is always a fraught policy area. But releasing the McClure blueprint for sweeping change after a budget that targeted a swathe of government payments guaranteed a lot of negativity.

The opposition has used it to reinforce its portrayal of a heartless government, although Bill Shorten supports the simplification of payments. Clive Palmer says it’s part of the Coalition’s “class warfare” and the approach of having “an inquiry to justify what they want to do anyway”. Disability representatives are alarmed; the welfare sector is critical of the short six-week consultation period.

The government could have taken an alternative path, putting out the report immediately after it received it in April. But that would not have given it time for consultations and decisions before the budget, so it probably wouldn’t have been much better off.

In 2000, when Patrick McClure reported on welfare for the Howard government, the landing was softer. The then government, the Labor opposition and the Democrats all had positive things to say.

In those days (when the concern was particularly to get single mothers into the workforce), McClure’s proposed architecture for the welfare system was a common base payment, with supplements for specific circumstances.

The Howard government didn’t take that up. McClure says that, in the years since, the gap between pensions and allowances has widened so dramatically (to some $300 a fortnight) that no government could implement the model today.

So in 2014 (when the attention is on trying to limit the numbers on the disability pension) McClure’s interim report proposes different architecture to simplify the system. It says the income support payments (currently 20, with 55 supplements) should be condensed into four: a tiered working age payment; a disability support pension; an age pension; and a child payment.

The new working age payment should reduce “the current gap between pensions and allowances, particularly for people with limited work capacity, or with significant labour market disadvantages”.

Within that payment, it suggests higher rates for single parents, people with a disability and a partial capacity to work, and others with a significant barrier to full-time employment. Those with lower payment rates could include students and single unemployed people, particularly the young.

The disability support pension “would be reserved only for people with a permanent impairment and no capacity to work”.

The plan also includes proposals for wider use of income management and for getting those with “episodic” mental illnesses (such as depression and anxiety) off the disability pension and into work.

Like many initiatives for welfare change, this one can be viewed positively (as a way to improve opportunities and lives through workforce participation, which is good for individuals, the community and the budget) or suspiciously (a cover for the government’s push against those it labels “leaners”, a way of pushing people off benefits and saving money).

The government did McClure no favours by dropping the plan to the Sunday Telegraph where the headline was (predictably) “Disabling Rorters”. The approach from a “grown-up” government would have been an embargoed briefing from McClure for the media generally.

Whether this eventually turns out to produce good or bad welfare reform, or not much reform at all, depends on three steps ahead.

McClure’s initial report is before detailed feedback and consultations. His final one will have more flesh, and that detail will be important both in itself and to the reception it gets.

Most obviously, the government’s decisions will be crucial – how bold they are (remembering that the Howard government fell at that hurdle); the balance between stick and carrot (which partly involves the goverment’s motives); and what amount of money it is willing to invest in smoothing the implementation of reform.

Social Services Minister Kevin Andrews said on Monday that “you’ve got to make some upfront investment to have the long-term pay-off”, but the costing is a matter for the government, not McClure.

Finally, given the unpredictability of the new Senate that begins life this week (and sits for the first time next week), the fate of any comprehensive plan for change will ultimately rest with the parliament, rather than the government.

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