Daniel Wild Discussing IPA Welfare Research 2GB Mornings – 8 April 2024

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8 April 2024
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The Institute of Public Affairs’ Daniel Wild joined Luke Grant on 2GB Mornings to discuss IPA’s research into Australia’s rapidly growing dependency on welfare.

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Below is a transcript of the interview.


Luke Grant:

As I mentioned just a moment or two ago, new research from the Institute of Public Affairs has shown approximately 2.1 million Australians over the age of 15 currently receive welfare. And not surprisingly, the biggest area of welfare growth has been the NDIS. Ray has spoken a lot about this on the show over the period. According to the research from the IPA, it seems that COVID was a turning point. They say it was that the COVID-19 normalised a welfare culture.

Daniel Wild is the deputy executive director of the Institute of Public Affairs and he joins me on the line. G’day, Daniel. Hope you’re well.

Daniel Wild:

G’day, Luke. Nice to chat again.

Luke Grant:

You too, my friend. Tell me about the research. Just walk us through what you found.

Daniel Wild:

Well, look, what we found is that over the last five years we’ve had a fairly substantial increase in the number of working-age Australians receiving welfare. Not including the age pension, let me make clear. So this is JobSeeker, Unemployment Benefits, Youth Allowance and so forth, and the NDIS of course. That’s gone up by about half a million over the last five years. And look, one of the key points is from around 2013 till 2018, we actually saw a steady reduction in the number of Australians receiving welfare. It was about 115,000 reduction over that period. So good gains were being made, but that all reversed from 2019 onwards.

As you alluded to, there were two key factors there. The NDIS came in in full in 2019, and then of course from 2020 to around 2022, we had the COVID lockdown and a lot of people going on welfare. And the problem is we simply haven’t gone back down. It was a step increase to welfare and there’s just, I think, too many people receiving welfare when they could conceivably be making more of a contribution through working.

Luke Grant:

Well, there’s a lot in that, isn’t there? I mean, we hear a very low unemployment rate and we hear a government spruiking about the number of jobs they’ve created, yet it seems more and more people are getting JobSeeker, and the talk about the NDIS, which is significant. I think I read earlier today, it’s costing or projected to cost 42 billion. And we’ve got a story here in the Sydney Morning Herald saying that sexual abusers, rapists and paedophiles are receiving NDIS support to live under supervision in the community. In one case, a paedophile receiving care, I think worth $1.4 million.

Now, I’m sure, and you and I would agree, that with good intention this policy was enacted. But I don’t know if anyone’s got, have they, Daniel, the stomach to say, “You know what? This is not what we were meant to or we hoped we’d be able to do. We’ve got to rein it in.” I mean, who’s going to take a free thing from an Aussie? Good luck with that.

Daniel Wild:

Yeah, that’s right. I agree. What we need to do is to return the NDIS to its original objective, which was essentially to provide pretty generous support to those who had a catastrophic injury or illness, if you’re in a car crash and you’ve incurred a catastrophic injury and you’re unable to work. I mean, I think that’s a really good scheme, the way it was brought in to start with. But it’s just metastasized and grown, and it’s a classic example of the problems with centralised government bureaucracy. It just grows and grows. It’s become an industry unto itself. And what we really need is to say, “Look, we’re going to have to bring the spending growth of the NDIS back in line with our economic growth.”

So one of the things that worries me, Luke, is you’ve got Bill Shorten who’s the NDIS minister, and I think he does want to fix the system. I think he’s genuine about wanting to fix it. But even what he’s saying is, “Look, we’re going to limit the growth of the NDIS to 8% a year.” Now, that’s 5% in real terms. Our economy is only going at 2.5% a year in real terms. So even under the best case scenario, you’ve got the NDIS that’s going to be going at double the growth rate as our economy. Now, that’s just simply unsustainable. So it’s got to be brought back in the line to about 2.5 or 3% growth so we can have longevity to it.

Luke Grant:

Yeah. The point you made earlier, I think is so important to repeat. That is, in that period 2013 to ’18, the total number on welfare declined by around 115,000, or as you put it, 23,000 per year on average. Are we right to say, and I think this is your reading of it, just for those that didn’t hear that important point, to think that we’re on a trajectory where we might actually be actually able to save money in this area, was it purely COVID that turned that around?

Daniel Wild:

It was COVID and the NDIS.

Luke Grant:

And the NDIS.

Daniel Wild:

You can clearly see those are the two drivers. And look, the real problem with COVID was not just the number of people receiving welfare, because at the time there was a need for it. I’m not disputing the reasons for it. We had the lockdowns, and I think the lockdowns went way too far, but there was a need for it. But what it did, particularly for a lot of young people entering the workforce for the first time, is it severed the connection between work and earning. So they were able to receive government payments without going into the office or without going to a work site or a job site. So they just haven’t been acculturated with the idea that you should go to work and earn if you’re able to.

And we know, of course, that it’s not just good for society to have more people in the workforce. We’ve got a worker shortage at the moment. About one in five businesses can’t find the workers they need. But it’s also good for the individual. It’s a source of dignity, a source of inclusion, social connection. You learn skills, you learn how to interact with other people, whether it’s suppliers or customers or your co-workers. It’s just so important that young people get into a job. So I’m concerned that there’s a significant minority of young people that haven’t received that message that working is actually good for you.

Luke Grant:

Well, that’s that thing you were calling welfare-first mentality. I don’t know how you get that back. Is that something driven by the parents or the families or the schools or the leadership? Who gets us back to a stage where we say, “You know what, if I want something, I’ve got to go out there and work for it.”?

Daniel Wild:

Well, I think it’s a bit of all of the above, I think, Luke, to be honest with you. I think long gone are the days where everybody was basically expected to work where they were physically and mentally able to. I just want to make it clear, I’m not trying to knock those who genuinely need welfare.

Luke Grant:

Of course.

Daniel Wild:

There are many who need it. And like I said, I think the NDIS has a critical role to play. But there does come a point where you go, “Well, hang on a minute. If you are able to make a contribution and get into the workforce, you should be.”

I think there’s a couple of things, Luke. Firstly, I think the education system is letting us down. We know that it’s full of this sort of woke indoctrination, which is a problem in terms of communicating our values, but in this particular context, it’s also just cluttering the curriculum. So students just aren’t learning job-ready skills. A lot of students don’t want to go to uni and uni is not the best option for them, and they might go straight into work after high school or go get a trade, but the schools are just setting them up for failure. And I think the second is political leadership. As you mentioned before, there are too few political leaders that are actually willing to speak out and say, “Look, enough is enough. We need to have boundaries around who receives welfare.” And the basic expectation is it should be work first and welfare second mentality, rather than the other way around.

Luke Grant:

Yeah. Great stuff. Good to talk to you, mate. Thanks so much.

Daniel Wild:

Good on you, Luke. Thank you.

Luke Grant: All the best. Daniel Wild, Deputy Executive Director of the Institute of Public Affairs. You can look at the research at ipa.org.au

This transcript from 2GB Mornings with Luke Grant from 8 April 2024 has been edited for clarity.

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