Social Services Minister Christian Porter was feigning an ideology and partisanship-free approach to welfare reform yesterday, when his speech was full of both. But beneath those, he was offering a potentially valuable opportunity to improve the effectiveness of at least some areas of welfare.
“It would be fair to say that governments of all stripes have generally not been very good at measuring the effectiveness of the welfare spend,” Porter told the National Press Club. “The notion that some or other ideology can prove that there’s some perfect or right answer to the question of how big the welfare state should be — seems to me … to mistake a question of context for a question of theory.” He also mocked his own youthful belief in hardline neoliberal economics, noting that he developed a very different attitude to things like taxation when he became Treasurer of Western Australia.
But there was plenty of ideology, and criticism of Labor, from Porter. Bizarrely, he tried to pin responsibility for the growth in welfare payments on Labor, accusing the Rudd government of “[building] the stimulus welfare payments into the Budget in 2008-09 … Under Labor, the growth rate of social security and welfare spending was almost double the growth rate of revenue.”
Well let’s take Family Tax Benefits, minister. When the Howard government established Family Tax Benefit A and B in the 2000 budget, they were forecast to cost $9.7 billion, along with maternity payments of $200 million. In the last Howard government budget, Family Tax Benefits cost $14.75 billion, a growth rate of over 7% per annum, while maternity payments had grown more than sixfold to $1.3 billion.
[Rundle: funding start-ups while cutting welfare is not agile, it’s dumb cruelty]
Under Labor, Family Tax Benefits grew to around $20 billion in 2011-12 and then actually fell in real terms over the next two years — all while that government was being castigated by the Coalition and News Corp for “class warfare”. And the growth in baby payments slowed right down and cost $2 billion by Labor’s last budget.
Still, Porter wasn’t around when Tony Abbott and Joe Hockey were deriding Labor for attacking the middle class by cutting welfare, and perhaps his colleagues — who have been busy slashing Family Tax Benefits ever since — didn’t fill him in.
And while Porter professed to sneer at ideology, he is dead keen on a beloved ideology of the right: mutual obligation. So enamoured is Porter of mutual obligation that he wants to extend it to enforcing school attendance, paying welfare debts and forcing people to stop drinking — a nice union of the “nudge” school of New Left nanny statism with one of the shibboleths of the right.
But curiously absent from Porter’s speech was any reference to that core example of mutual obligation in Australia, “work for the dole”. Perhaps that’s because, while loved by voters who’ve absorbed the “dole bludger” trope endlessly recycled by the media, work for the dole, um, doesn’t work. And certainly not in terms of the “effectiveness” Porter professes to value.
That’s somewhat embarrassing in view of the key theme of Porter’s speech — the need for evidence-based policy. The $96 million Try, Test and Learn Fund announced by Porter is designed to fund initiatives that could improve welfare effectiveness and increase self-reliance — and fund the evaluation of them.
Evaluation used to be a big thing in the Australian Public Service in the 1990s, but seems to have fallen into abeyance in recent years, perhaps because governments found it more convenient to not be told that certain cherished programs didn’t work. Nonetheless, Porter’s fund, which is open to pretty much anyone, is a welcome display of interest in facts — something, of course, that the Abbott government had a strong aversion to.
Porter identified three priority groups for targeting — each of them small, but important: young carers who are more likely to remain on welfare, young parents and students who don’t make the transition to full-time work.
As Porter says, the moral case for better helping young carers, in particular, is strong. These are young people who are not merely looking after, say, chronically ill parents and putting their own education or training on hold, but who are saving our health and caring systems huge amounts of money. Programs that better enable them to complete their education and move into work — the government has already set up a small educational fund for that purpose — should be a moral as well as economic priority.
Those three groups have all been identified by longitudinal data that enables a fairly granular look at relatively small groups such as young carers or young parents, who only number in the thousands. Porter flagged other micro-group priorities like people who’ve just left the welfare system, older carers and parents about to lose parenting payments — all of whom the data shows are at greater risk of remaining or returning to welfare.
In making the case, Porter borrowed from his predecessor Scott Morrison and bandied around absurd numbers as a kind of justification for reform — the lifetime cost of the welfare system was several trillions, he said. So what? The economy is on its way to $2 trillion per annum, and thus worth more than a hundred trillion dollars in a lifetime. The number is meaningless — and unnecessary. A program that, say, better ensures young carers complete their education and obtain fulfilling jobs is worth it even if the net saving to taxpayers is small — or none at all.
The broader challenge Porter faces is a fiscal one; this “investment” approach to welfare, as recommended by last year’s McClure report, costs money up-front to generate long-term savings. It’s the same with investing in early childhood education and identifying at-risk kids, or putting money into early-stage mental health treatment.
Like some of his colleagues in line portfolios, Porter might find himself having to argue with Morrison, Mathias Cormann and the central agencies that finding the money for investment in targeted welfare recipients will cost the budget over forward estimates but yield savings that will be enjoyed by future governments. Good luck there.
It’d be nice if his commitment to evidence-based policy was allowed to infect his enthusiasm for mutual obligation — but at least it’s a signal Porter is serious about improving welfare effectiveness.