Treasurer Scott Morrison’s speech Thursday to Bloomberg in Sydney contained a lot of bluster on welfare spending, dividing modern Australians between the “taxed and the taxed-nots”, while seemingly blaming the rise in welfare spending on younger Australians:
“A generation has grown up not ever having known a recession, of seeing unemployment rates at more than ten percent, with one million Australians out of work or mortgage rates at 18 per cent or where inflation is actually a problem, rather than an aspiration.
In addition, a generation has grown up in an environment where receiving payments from the Government is not seen as the reserve of those who unfortunately will be forever dependent on support or in need of a hand up, but a common and expected component of their income over their entire life cycle.
On current settings, more Australians today are likely to go through their entire lives without ever paying tax than for generations. More Australians are also likely today to be net beneficiaries of the Government than contributors – never paying more tax than they receive in government payments.
There is a new divide – the taxed and the taxed nots…”
Yet again, Scott Morrison has ignored the actual facts about welfare spending.
Last month’s HILDA survey revealed that welfare reliance for those below retirement age has actually fallen over the past decade:
Moreover, if Morrison genuinely wants to reduce welfare spending, surely he should focus on the biggest and fastest growing component – the Aged Pension ($45.7 billion currently rising by $2 billion per year to $52 billion by 2019-20) – which dwarfs the other forms of welfare expenditure (see below chart):
As shown last month, the home ownership rate for Australians aged 65 and over is 75%, and this cohort has experienced an enormous rise in wealth on the back of rising housing values. And yet for no good reason, housing is largely excluded from the assets test to receive the Aged Pension.
As such, Australia finds itself in the perverse situation whereby older Australians have experienced an unparalleled rise in wealth at the same time as their dependence on the Aged Pension has risen rapidly, and is projected to continue doing so.
Surely, then, any reforms to welfare spending should target the Aged Pension first, since it is by far the biggest and fastest growing component and the most poorly targeted?
It’s also fair to say that very few working-aged people ‘choose’ to go on welfare. Take a look at the below table, which shows that a single Newstart recipient receives a pitiful $37.70 a day:
This compares to $62.42 per day on the Aged Pension once supplements are factored in, despite most older households (75%) owning a home:
So Scott, tell me again why younger Australians are responsible for the welfare blow-out and why the Government should further tighten the screws on working-aged recipients, whose numbers are falling and are already paid a pittance?
You also failed to acknowledge that younger Australians fortunate enough to buy a home are saddled with unprecedented mortgage debt, nor that student debt is at record highs, graduate employment opportunities stink, and youth unemployment is endemic.
In short, stop bashing the young and shift your focus to your own over-entitled generation.