McClure says income support must be sufficient for people to engage with society

Last year the Federal government asked former Mission Australia CEO Patrick McClure to review the welfare system. The report makes some interesting recommendations with a strong emphasis on looking at the system holistically. It also demonstrates an understanding that people’s relationship to the workforce isn’t just about income support – it hinges on support from education and social services, family, friends and employers.

 The report focuses on reforming the system based on four ‘pillars’:

  1. A simpler and more sustainable income support system

While the report does not talk about welfare payment rates, significantly, McClure states that payments must be adequate enough to provide a basic, acceptable standard of living to cover the costs of participation, which we know that Newstart does not currently provide. The report recommended replacing the 20 income support payments that are currently available with five primary payments – tiered working age payment, supported living pension, child and youth payment, carer payment and the age pension. Each primary payment would have varying rates to reflect different circumstances.

  1. Strengthening individual and family capability

This involves identifying people who are at risk of being on income support long term (but capable of working), and investing in support services to help them into the workforce. An article on The Conversation explains how this is done. This includes training people with specific technical skills, but also working on language, literacy, numeracy and employability skills that will help people get by in the workforce. The report found the new system should be able to identify when a person’s housing situation is unstable through various triggers such as multiple changes of address.

  1. Engaging with employers

The report stresses that training and education must keep up with the demands of a changing workforce so that the skills being developed match the job opportunities that exist. It also recommends supporting employers to recruit and retain appropriate staff, including supports for employees with mental health or physical disabilities.

  1. Building community capacity

This looks at the role of our broader society in helping people get into and stay in the workforce. It discusses the role of philanthropy, volunteering and even things like programs that help people set up micro businesses.  

This is not the first time Mr McClure has studied the efficacy of the welfare system. In 2000 he released a comparable report for the Howard government, and some of the recommendations are strikingly similar. In that report McClure was concerned about the high number of people out of work despite Australia’s strong economic position and was concerned that jobs growth was not spread evenly across the community. He felt the welfare system could be “failing those it was designed to help” and stressed that the social support system must (pg.3):

“…do more than provide adequate levels of income support for people in need. It must ensure that people are actively engaged socially and economically, including in the labour force, to reduce the risk of long term social and economic disadvantage for themselves and their families.”

In the current report, McClure States (pg.5):

“Payments in the new system should be adequate enough to provide a basic, acceptable standard of living and to cover the costs of participation.”

Both quotes emphasise the need for payments must not just cover the basic costs of living, but enable people to actively participate in society. Some coverage has raised concerns about the architecture of the system; however, similar recommendations were made 15 years ago and were not taken up. Perhaps the ultimate test will come when we find out how, and if, the Government intends to implement a new welfare system.