TREASURER Scott Morrison posted a this-was-mine claim on Facebook after Social Services Minister Christian Porter promoted what was received as a fresh approach to welfare reform in his Tuesday speech to the National Press Club.
Morrison’s post noted: “When I was Social Services Minister we picked up a new approach from [New Zealand], to help get our welfare system under control … It was called ‘the investment approach’.” He added some detail of the background and said “Christian Porter is now leading the next phase of ‘investment approach’”. He also referred to his role in interviews.
It’s perhaps not surprising Morrison was anxious to grab some political ownership of the initiative – which goes back to a report from welfare expert Patrick McClure that was commissioned by Kevin Andrews. Porter – while acknowledging Morrison – has skilfully managed the latest airing of the “priority investment approach”, accompanied by a new PricewaterhouseCoopers (PwC) report in which projections show huge long-term welfare costs.
A former Western Australian treasurer and attorney-general, Porter, 46, has the potential to be a future treasurer and possibly a Liberal leader. Ambition sent him to Canberra. On the day he addressed the Press Club, WA Premier Colin Barnett was holding off a leadership challenge; if Porter were still in state politics he’d probably be premier.
He is a natural rival to Morrison.
Porter won plaudits for his Press Club performance, in which he cast the investment approach not as a cost-saving exercise (though that’s the subtext) but as about giving better opportunities to people otherwise likely to spend most of their lives on welfare.
The idea is to use an actuarial calculation, identifying those most vulnerable to the welfare trap, and then intervene early with targeted “investment”. The PwC report identified three such groups: young carers (11,000 people), parents under 18 (4370), and some students (6600).
The aim is admirable but qualifications and questions arise.
The PwC work has the wrinkles common to exercises looking far ahead. The figures coming out are only as good as the assumptions going in, and over decades circumstances alter unpredictably. For example, the economic growth rate in 20-30 years will be relevant to who is on welfare – a stagnant economy would make it harder to get jobs.
The trend of a growing welfare bill might be clear but the individual figures are another matter.
Porter told the Press Club the PwC report showed “we face a total estimated future lifetime welfare cost of the present Australian population of A$4.8 trillion”. He observed: “That is a very large figure, and no doubt it will receive considerable attention.”
As it was meant to. Porter knows we in the media respond to mega-numbers like hungry dogs to juicy bones. But when the bones are thrown around, we should examine the meat.
Writing for Guardian Australia, economics columnist Greg Jericho argues “lifetime” figures are misleading and the big numbers are designed to shock.
Remember they include the aged pension and family payments. The pension cost goes to the broader retirement income system, while family payments are in a rather different category to other “welfare”.
The numbers in the three groups initially selected for “investment” attention are very small. Some $96 million has been set aside to garner ideas from outside the federal government on how to best assist them (and other groups later on).
It is a modest amount in the scheme of things, and hopefully some new ideas will come, although it might be asked whether there are not already programs that would be suitable, perhaps with some rejigging. If so, shouldn’t there be more effort to case-manage them into these?
There’s also the broader question of how successful the “investment approach” will be if and when it is extended to very much larger welfare cohorts.
Whatever the limitations of the approach might be – and there is mixed news from New Zealand – it does have promise.
But some of the negative reaction this week – for example from young carers and welfare sector representatives – reinforces the point that it’s not easy to prosecute reform. Suspicion about the government’s motives affects the debate, and whenever payments are involved there is resistance to anything that could threaten them.
Social services is one of the most exacting portfolios, full of detail, policy complexities, and diverse stakeholders, some of them represented by well-organised lobby groups.
It provides an ambitious minister with scope to make a mark, but it’s tough going, requiring a blend of honed policy skills and empathy.
The “investment” project can only deliver dividends in the medium term. If Porter is to show his stripes he will have to go beyond, as one observer put it, “trailing his skirt in this attractive way”, to also demonstrating initiative in managing the formidable immediate budgetary and other demands of the job.
This is a portfolio where occupants often have determined intentions but limited results. With eyes on the future, colleagues and commentators will be watching just what Porter can deliver.