'Welfare to work' melting under spotlight

Penny Wong

Labor Senator for South Australia
Shadow Minister for Employment and Workforce Participation,
Corporate Governance and Responsibility

Sunday 19 June, 2005

In the last week of parliamentary sittings, Labor will highlight that
the Howard Government's so-called welfare to work package is a shambles that won't improve workforce participation.

"Since the Budget, Labor and independent experts have shone a spotlight on the Howard Government's incompetent scheme and found that it fails its own basic test of moving people from welfare to work," Shadow Employment Minister Senator Wong said today.

"Under the Howard Government's confused scheme, there will be less incentive to move into work because workers will lose more of what they earn."

Treasury confirmed this fact at Senate Estimates hearings, and last week the respected Melbourne Institute agreed:

The effect of on labour supply of these measures is ambiguous... Relatively less can be gained from employment due to the higher benefit withdrawal rates when earning additional income.

In addition, the Treasurer's claim that 190,000 people will move from welfare to work has been completely discredited.

"At estimates, Treasury revealed that it expected that no current
Disability Support Pension recipients would move into work at all. And now the Melbourne Institute is projecting that only 45,000 people will move from welfare to work.

"Add these revelations to the chorus of concern raised by church groups and the news that Job Network agencies are threatening to walk from the system, and it is clear that the 'welfare to work' scheme is decomposing before our eyes.

"Welfare reform was the opportunity for Australia to ask welfare
recipients to help address the chronic skills shortage - but that
opportunity has been wasted with no major investment in the skills of welfare recipients.

"The Howard Government's process for developing this scheme was chaotic, the results have been disastrous - and vulnerable families and disabled Australians will pay the price.

"After nine long years of talk on welfare reform, the Howard Government is just moving vulnerable Australians from one welfare payment to a lower welfare payment. Labor will be calling the Government to account for this cruel scam when the last parliamentary sitting week for the session begins tomorrow."

For further information - John Olenich 0408 841 850