February 03, 2014

The ABC’s Fact Check has confirmed that Social Service Minister Kevin Andrews’ claims that Australia is at risk of developing European-style welfare expenditure challenges are completely false. 

Mr Andrews recently labelled Australia's welfare system unsustainable and claimed that in 10 to 15 years' time Australia would find itself in the same situation as some European countries. Labor exposed these claims as false, citing recent figures from the OECD that show our social security expenditure is well below other OECD countries. 

What we are seeing is an attempt by the Government to fabricate a sense of crisis in order to soften the ground for a round of savage cuts.

Kevin Andrews is being deliberately dishonest with the Australian people about the state of our welfare system.

Consistent with the OECD evidence cited by Labor, Fact Check has determined Mr Andrews’ claims are false, citing information from Treasury’s 2010 Intergenerational Report, that show welfare spending as a proportion of GDP will remain steady over the next three decades.

The report says government spending on pensions and income support payments in 2009-10 was 6.9 per cent of GDP. It predicts that there will be minor fluctuations and it will still be 6.9 per cent in 2049-50.

Fact Check notes that many European countries spend a significantly higher percentage of GDP on age pensions than Australia. Italy spends 15 per cent of their GDP, France 14 per cent, Belgium 10 per cent, Sweden eight per cent and the United Kingdom six per cent.

Professor Peter Whiteford, from the Crawford School of Economics at the Australian National University, is quoted in the Fact Check report as stating that Australia is: "relatively low in terms of social security and around average in the terms of spending on health".

Professor Whiteford says: "Because we income test payments more than any other country, we have the most progressive distribution of benefits in the OECD, and we also spend less than the OECD average.”

If anything the Coalition’s planned introduction of a gold-plated and unfunded Paid Parental Leave scheme is the welfare program most reflective of larger European welfare programs. 

Professor Whiteford also makes this observation: "It could be noted that the only element of the social security system that will resemble the European approach when it is introduced is the Government's paid parental leave proposal."

Labor will not support the Government’s attempts to make savage cuts to vulnerable Australians so they can give $75,000 to wealthy people to have a baby.

The Abbott Government needs to stop this dishonest talk on welfare expenditure and come clean with Australians about what their Commission of Cuts is examining, who will be affected and how.


3 February 2014

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