The concepts of welfare spend has been raised in response to some of the country’s pressing financial problems, in order to re-evaluate the system to make it more profitable.
According to a local business elder, the increases in welfare spending (claimed to be a political tool) and the rate of unemployment among the youth are two of the biggest challenges facing the country at present. The businessman, who has held senior positions in major organisations and financial institutions, has questioned welfare spend and issued a warning that the health and pension costs generated by the ageing population need to be addressed in order to relieve the pressure on the federal government.
The comments are topical in light of the fact that the government has to desert its plans to achieve budget surplus following the collapse of revenue streams from mining taxes and forking out millions to pay for controversial matters like the NDIS and reforms to school funding.
The esteemed business man highlighted the importance of engaging in public debate over these issues. He said fears that the mining industry had reached its pinnacle and concerns for households needing to settle debts would also put the tax collections under greater pressure.
His comments were also made following the Treasurer’s assertion that federal government observed strict financial discipline and that the country had one of the world’s most stable public finance systems in the world.
Despite not achieving the surplus, the government’s office reiterated that it was still committed to improving the budget’s sustainability, which it was trying to protect with the adoption of private health insurance cover, means testing and the Baby Bonus.
In defence of the government’s achievements in office the Treasurer said that employment had been boosted as a result of the “smart reforms” applied to welfare, training and tax. He said the government was indeed looking to consolidate its finances but in such a way that it would support economic growth and job creation.
But, while the Prime Minister may have gone into great detail about supporting the middle class and being supportive of corporate Australia the reality is that welfare funding and social security benefits now comprise 35% of the commonwealth budget. The target for 2013 is $132billion worth of expenditure. Over and above this, individual states are also spending more money on homelessness and pensioners. The New South Wales budget contributed a further 8% on welfare and social security for this year alone.
Over the course of the last ten years household case payments have increased at between 5 and 8% per annum and this rate of growth is certainly not sustainable for the economy, according to accountants and economists, especially in light of the size of the country’s ageing population.
While he presented the facts quite directly he also acknowledged the sensitive nature of the matter because the very definition of welfare funding is to provide support for those who are less fortunate using those who are more fortunate, and trying to balance the scales out.
He acknowledged that welfare was an important component of societal wellbeing but said that it was also good practice to assess the sustainability of the process on a regular basis and that resources, being scarce, should be checked to see that they are being allocated correctly.
He also said that the issue of unemployment among the youth needed to be addressed. While official figures tell us that the unemployed youth stands at 12% he said that the figure was probably closer to 16%. He indicated that both the Labour Party and Coalition should be looking to address the issue as a priority.