Henry Williams is the Director of Policy at a new Melbourne-based think tank called Policy Institute Australia. They have done detailed analysis of how to tweak Australia’s welfare system to provide for those in need, rather than giving away billions to high-wealth households.
It is all in their report called “Home truths: The case for rebalancing toward better means testing”.
Here’s a revealing example from the report that illustrates some of the concerning realities of how Australia’s welfare system operates:
…a retired couple with a $5 million home in Sydney can qualify for the full Age Pension worth almost $50,000 a year, and up to $150,000 for one spouse in Aged Care. Their neighbours who rent a modest home and hold $1.5 million in super receive no pension at all and roughly half the Aged Care support.
This seems unfair—at least according to my internal moral compass.
Here is another example from the report
…[a] family with two kids earning $400,000 a year qualifying for up to $20,583 in Child Care Subsidy support and about $20,000 in Parental Leave Pay…
I think some listeners would be surprised by these welfare settings. In my imagination, these subsidies and welfare payments go to those in need, not wealthy and high-income households.
In the interview, we get quite nerdy discussing how relatively minor tweaks to just four parts of the welfare system—the Age Pension, Aged Care, the Child Care Subsidy, and Parental Leave Pay—which now cost over $126 billion per year, could save $21 billion per year.
And it would all be achieved in what I perceive as a very fair way, by targeting what amounts to upper-class welfare.
Here’s Policy Institute Australia’s website, and here’s the report.
*Note that we didn’t cover the more radical policy shift of making cash payments universal and letting the tax system do the means testing.
Timestamps
0:00 Introduction
4:01 A family with a $400,000 annual income gets $20,000 of benefits
5:58 What does some of the jargon mean
12:07 The scale of the payments
15:30 Age pension reforms
28:00 Age care payments
39:08 What about welfare for younger people and families
44:59 Is it good to pay people for babies
56:04 How big are the budgetary savings
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