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Federal government announcement of new “welfare investment approach” and $96 million towards new ideas

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On Tuesday 20 September 2016, the Federal Government announced a new investment approach to welfare. The Government states that the new approach seeks to improve outcomes for people who experience disadvantage and are reliant on income support, as well as address the increasing costs of the income support system.

Termed the Australian Priority Investment Approach, it draws heavily from the New Zealand model and experience and is about intervening early to prevent long-term dependence on income support.

A key element of the announcement is that the Government has committed $96 million for a “Try, Test and Learn” fund. The fund enables organisations to compete for a chance to try their policy proposals to create a path out of the welfare system. The Social Services Minister Christian Porter said the fund will be open by the end of the year for Not-For-Profit organisations, governments, social policy experts and industry to pitch their ideas.

 

Background

The Federal Government commissioned a major new report from PricewaterhouseCoopers (PwC) to analyse welfare data over a period of 15 years.  The report identified the projected long term cost of Australia’s income support system and the three groups that are most at risk of long-term reliance on income support. The three groups are young carers, young parents under 18, and some students.

PwC developed a set of assumptions to analyse the data, which suggests the following:

Category Number in Australia Average time spent on income support Total costs over a person’s lifetime
Young carers 11,000 43 years $5.2 billion
Young parents (under 18) 4,370 45 years $2.4 billion
Students

(those who move from student onto working AGE PAYMENTS)

6,600 37 years $2 billion

Social Services Minister Christian Porter has remarked in interviews that the welfare system “was not making life any better” for many Australians; that “too often, it seems to make life worse over the long run,” and that the benefits of work were effectively “being taken away” from young people who became glued to the system.”

Finally, he stated that, “there is absolutely nothing morally superior or progressive about just applying more money to more of the same approaches where they don’t seem to be working, without trying something different.”

 

Analysis

Western Sydney Community Forum (WSCF) unreservedly supports an early intervention approach.

The evidence which underpins the work of social services professionals is clear – intervening early, whether in early childhood or across life stages, is more likely to deliver better outcomes whether it is measured through a social impact or economic lens.  The essence of the proposed new investment approach to welfare therefore is welcomed.

Also welcome is the investment of $96 million for Not-For-Profit organisations to test and implement evidence based models that improve outcomes for people who experience disadvantage and are reliant on income support. The evidence tells us that stable employment brings unquantifiable benefits beyond those measured in pay packages or gross domestic product terms.

 

Case in point: young carers

ABS 2010 data showed that there were around 305,000 children and young people up to 24 years who carers. For family members or friends with disabilities, for people with long-term physical and or mental health conditions, and those experiencing a substance dependency. For many of these young carers, their responsibilities are unimaginably excessive and inappropriate.

A vital consideration in this scenario is the economic contribution made by young carers and the savings made in providing formal care. In 2010, the contribution of all carers (of all ages) was estimated at $40.9 billion a year. Carers’ recognition and respect was the number one priority in the 2011 National Carer Strategy Evidence Base.

The data tells us that 70.6% of young carers who received Carer Allowance or Carer Payment remain on income support after completing their caring roles.  This demonstrates that the barriers that young carers experience from an early age, continue to seem insurmountable as they grow older.   From an industry perspective, a myriad of potential strategies have been identified to support young carers to move into employment.  Namely, those prepared by Carers Australia being the 2013 Unpaid Carers: The Necessary Investment and the NSW Carers Strategy 2014-2019.

An early intervention approach cannot espouse shallow or short term schemes. The evidence tells us that early intervention models must be long-term, evidence based and comprehensive to result in sustained improvements. Furthermore, it can take years to see the results or trends of a particular intervention.  But the cost of “non-intervention” is even higher. A UK 2008 report entitled “Economic Valuation of Young Carers Interventions” assessed the economic impact of young carers’ interventions and estimated that “for every pound invested in a young carers’ project, the saving to the Exchequer and wider society is £6.72.”

Finally, this is about people not dollars. WSCF supports the call to not make the welfare investment approach primarily a cost-saving measure. To be a prosperous and inclusive nation, the narrative must be about supporting people to live more fulfilling lives that they themselves are shaping.

WSCF will continue to provide its members with updates on the new investment approach to welfare and the $96 million fund.

 

We welcome your thoughts and feedback.

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