Welfare system review offers hope and anxiety

CEO Social Justice Blog

The announcement that the Federal Government is to review its welfare system gives some hope to unemployed Australians but also much anxiety.

The anxiety stems from the limited scope of the review which will focus only on Newstart and the Disability Support Pension. Age pensioners and family tax benefits are excluded from the review even though the cost of these payments is more than double Newstart and Disability Support Pension.

So is this another attack on the disadvantaged? Let’s hope not. Last year there was a major community campaign to raise Newstart by $50 per week but the Labour Government dug in and refused with the support of the Coalition.

Maybe the new government will be more generous. It is understandable with unemployment rates set to rise this year that governments should review how to fund benefits and allowances. But rather than focusing on expenditure, they could also consider lost income.

For example:

  1. People over 55 can have their salary paid into a super account and then withdraw their savings from the account thus saving a huge amount of income tax. This would be called a tax rort except that it’s legal.
  2. Australia is an affluent country and many people put their savings into rental property. The government allows them to negatively gear this investment which saves the investor tax and loses the government income. Why?

Removing anomalies such as these would more than compensate for the increases to unemployment benefits.