2001 cabinet papers: ‘Mutual obligation’ at the centre of welfare overhaul

The 2001 cabinet examined ways to create more ‘mutual obligation’ as it looked to encourage more Australians off welfare and into work, the cabinet papers reveal.

Tony Abbott and Amanda Vanstone.

Tony Abbott and Amanda Vanstone urged their 2001 cabinet colleagues to “seize the opportunity … to tackle the culture of welfare dependence and entitlement”, saying the nation’s growing welfare bill was hurting the federal budget and urgent reform was needed.

In March 2001 the two ministers took to cabinet a recommended response to a landmark report on welfare reform the government commissioned in 1999, the McClure Report, and were keen to drive home the chance to embed more “mutual obligation” into the welfare system.

The government’s reference group on welfare reform, chaired by then Mission Australia chief executive Patrick McClure, provided its final report in August 2000, with the Howard government flagging that welfare reform would be a significant element of the 2001 federal budget.

Expectations were high, and Mr Abbott, the employment, workplace relations and small business minister, and Senator Vanstone, the family and community services minister, grasped the nettle.

“Welfare reform offers us a strategic opportunity,” they wrote. “The need for reform is ­urgent. We should seize the ­opportunity provided by the McClure Report, and the broad community support for its directions, to tackle the culture of welfare dependence and entitlement.”

While the McClure Report proposed all working-age payments be rolled into a single payment, the government didn’t take this path.

Instead, it focused on promoting mutual obligations within existing payment structures.