David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

I wish to speak about social welfare payments and the very large role that they play in the federal budget. Our social welfare system matters a great deal, because it is the means by which we provide for people who need government support.    It goes without saying that we all want to help people in need. It is one of the marks of a civilised society.    However, our moral obligation extends to not only those who need government support but also those who pay for it.

In my electorate of Banks, people are supportive of the social safety net. But they want it to be a safety net, not a way of life. It is important to look at the numbers to understand the significance of this issue to the federal budget. In 2014-15, the budget forecasts final federal spending is $420 billion but, of that $420 billion, about $55 billion is the revenue that the federal government merely collects on behalf of the states through GST and passes through automatically to them. It is not in my view a federal spending, given that it is simply a pass through to the states. Of that $365 billion that remains, $149 billion is social security and welfare—that is about 41 per cent of all federal spending.

Since 2004-05, annual spending on social security and welfare has increased from $83 billion to $149 billion—an increase of 80 per cent in a decade. To put it in context, this spending is about five times what we spend on education and about six times what we spend on defence. It is about 35 times what we spend on immigration, 150 times what we spend on the ABC and close to 800 times what we spend on tourism. It is an extremely large amount.

There has been a lot of discussion in recent times about compliance in the tax system and ensuring companies do not unlawfully evade tax, and that is entirely appropriate. The tax integrity measures that we announced in the budget will go a long way towards addressing that problem. But integrity measures must apply to the welfare system too, representing as it does 41 per cent of effectively all federal spending. It is hard to argue with the proposition that welfare payments should only go to people who are actually entitled to claim them. Whatever the programs, whatever the rules, they have to be followed. If even one per cent of current welfare spending is obtained inappropriately, that would equate to about $1.5 billion per year or about $6 billion over the forward estimates. That saving would dwarf the financial impact of the vast majority of other measures that are discussed here in Canberra.

Compliance work is unglamorous. It will never get the amount of attention of the Canberra story of the day; it is hard to write an amusing tweet about it, after all. But good compliance work in welfare is likely to have a much bigger budget impact than the scores of shallow controversies that get raised in this place by those opposite each year. Under the leadership of the social services minister, improved compliance measures in the disability support pension are already starting to work. Assessing claims consistently through doctors contracted by the government has had a substantial impact in managing the growth of this payment. In 2014-15 there were 40,000 people granted the DSP, compared to over 90,000 in Labor's peak year of 2009-10. These numbers suggest that the potential benefits of improved compliance are very significant. Seventeen billion dollars is spent annually on the DSP. This is one of the largest programs in the entire federal government. We all want a strong program to help the disabled, but we can't have that program being compromised by people who are not in fact entitled to it.

In the debate about tax reform, those opposite are quick to leap to the conclusion that Australians should be compulsorily charged more tax—more tax on super, more tax on real estate, more tax on electricity, more tax on a whole range of things—but how can we demand that people pay more tax before we have done everything we reasonably can to limit what government spends? Even small improvements in welfare compliance can have a very substantial impact on the budget, and it is critical that government focuses on this area as it is under the social services minister. By managing social welfare compliance effectively, we can ensure that the system is always there for those who need it. The people of my electorate of Banks expect nothing less.