16 December 2015
by Judith Ireland
Welfare crackdown raises concerns
Cassandra Goldie has questioned whether there is an extra $2 billion to be found through the budget measures.
It's one of the headline savings measures in the mid-year budget update, tipped to generate more than $2 billion from the welfare payment system.
But it has some experts scratching their heads, wondering if the money will materialise and why the government isn't going after the big end of town.
In the May budget, the Coalition said it would find $1.5 billion in savings by improving the Department of Human Services' capability to investigate suspected welfare fraud and non-compliance.
According to evidence given to a Senate committee, a new welfare fraud taskforce was set up in July but, as of October, was not fully staffed.
With work just getting off the ground in Canberra, on Tuesday the government announced an extra $2 billion would be saved over the next three to four years from further "enhanced welfare payment integrity" measures.
This includes $1.3 billion from recovering money where there are inconsistencies between the income people declare to Centrelink and the information employers provide to the Australian Taxation Office. There is a further $700 million from matching Centrelink data with non-pay-as-you-go information declared by people to the ATO, and $158 million from improving debt recovery.
Finance Minister Mathias Cormann said the MYEFO changes were about "improving consistency, integrity and efficiency across Commonwealth government payment arrangements".
Australian Council of Social Service chief executive Cassandra Goldie questioned whether there was an extra $2 billion to be found through the budget measures.
"We think it's an unrealistic assessment from the government of what they are likely to achieve," Dr Goldie said.
She pointed out that a tiny fraction of welfare recipients are referred for prosecution for fraud. In 2014-15, this was 1366 cases, or about 0.02 per cent of recipients.
Dr Goldie said she hoped the government would not take an "aggressive approach" to debt recovery, given that it had set "unrealistic" targets for savings.
She said the "real problem" was the complexity of the welfare system and the difficulty people sometimes had meeting their obligations.
"Sometimes there is over and underpayment," she said.
Welfare Rights Centre spokesman Gerard Thomas agreed that Australia had one of the most complex social security systems in the developed work, and said "errors and mistakes are common".
But while Welfare Rights was "generally supportive" of data-matching to catch debts at an early stage, Mr Thomas cautioned it should not be called a "fraud measure".
"All that's really happening is that the Department [of Human Services] is doing its job," he said.
According to the Department of Human Services, it achieved 98 per cent "payment correctness" in 2014-15, slightly up from the year before.
Mr Thomas was also concerned that the government was only "looking at part of the problem", noting that there should also be a closer examination of people prosecuted for tax fraud.
Shadow treasurer Chris Bowen said his counterpart, Treasurer Scott Morrison, was a "one-trick pony" when it came to finding budget savings.
"He rolls it out every time, and that is to increase compliance when it comes to social security," Mr Bowen said.
He said the government had missed an opportunity to "get tough" on multinational tax evasion and high income superannuation concessions.