Budget discipline is the priority

There are no surprises in new recommendations to government that it should spend more on welfare, given the way in which the panel to assess the adequacy of existing arrangements came into being. The big, and welcome, surprise is the short shrift with which Jim Chalmers dismissed the findings, considering the government’s rhetoric on the issue of helping the poorest citizens in a cost-of-living crisis. The Treasurer is right to rule out the overall claim for $34bn from his Economic Inclusion Advisory Committee. This includes the panel’s conclusion that the “seriously inadequate” JobSeeker be increased by 40 per cent to just under $1000 a fortnight.

Dr Chalmers’ time is better spent looking for ways to cut spending, reduce taxes and promote incentives to work. Getting off welfare must be the priority for recipients, not wishing for a warm glove of government support that will never be sufficient. Dr Chalmers says the budget next month will build on the work the government has already done, such as making it easier for pensioners to work more hours without losing their pension; improving employment services to better support people with disability to find employment; and by investing in paid parental leave to give more families access to the payment and provide parents greater flexibility in how they take leave.

These are the sorts of measures that promote self-reliance and deserve support. Dr Chalmers says some of the committee’s 37 recommendations will be considered as part of other government processes that are under way, such as the development of the employment white paper, the Measuring What Matters statement and the Early Years Strategy. But in next month’s budget and beyond, he says, the Albanese government will continue its work to build a stronger, fairer and more inclusive society where more Australians have the chance to contribute and share in our economic success. Given the low level of unemployment and the difficulties facing employers in finding workers, this is the right approach to take. As we reported on Wednesday, the 97-page report from the 13-person interim committee, led by former deputy Labor leader Jenny Macklin and including academics and social services advocates, focused on whether the more than one million working-age Australians receiving payments such as JobSeeker or Youth Allowance were receiving enough.

The government gave a similar downbeat response to the interim committee’s proposals that called on the government to make economic inclusion and poverty reduction specific responsibilities of Treasury. It called for a poverty index to provide a more comprehensive picture of the nature and extent of poverty in Australia. This must all be seen in the context of promises made by Dr Chalmers during the election campaign last year to expand the remit of the federal budget to include less tangible measures than inflation and economic growth to report also on community health and wellbeing. Since these promises were made, Dr Chalmers has had to face the full reality of managing the economy with high levels of debt during a period of high inflation, slowing growth, rising interest rates and an uncertain global outlook. His job must be to stare down rent seekers, not encourage them.

The annual pre-budget report was established following a deal brokered with independent ACT senator David Pocock in return for supporting the government’s workplace reforms, which passed parliament in December last year. The workplace reforms that paved the way for tighter workplace regulation, including industry-wide bargaining, was bad policy that will increase the costs to business and reduce opportunities for those seeking employment. Senator Pocock attempted to extend the generosity to those on welfare. Dr Chalmers has given the report the attention it deserves. This might make it more difficult to win the support of Senator Pocock in future but that is a price worth paying to retain budget integrity.