In September last year, Social Services Minister Christian Porter addressed the National Press Club with the findings of an actuarial study conducted by PwC which “shows that we face a total estimated future lifetime welfare cost of the present Australian population of $4.8tn”.
What an absolutely meaningless figure. Its only purpose could be to find the biggest number you can to try to justify attacking welfare recipients under the guise of budget repair.
A more relevant figure might be the lifetime earnings of the big four accounting firms from government contracts.
The 2015 budget allocated $33 million to be spent over four years to bring in actuaries “to work out an annual estimate of the lifetime cost of Australia’s welfare system and to identify groups most at risk of welfare dependency.”
A nice little money earner but only the tip of the iceberg.
As Michael West points out, the Big Four accounting firms have picked up at least $2.6 billion in fees from the Australian government over the past ten years.
When it comes to leaners look no further than PwC itself which has picked up $759,736,134.06 over the past ten years from the Commonwealth; almost $760 million in taxpayer money for doing reports – providing advice, paper shuffling.
Let’s not forget Ernst & Young, which banked $525,064,685.80 for writing stuff, and Deloitte with its $415,773,994.86, the lowest of the Big Four leaners but nonetheless a leaner par excellence.
It is KPMG though which takes first prize in the corporate welfare stakes, strapping on $934,351,772.48 of the taxpayer’s finest, clipping almost $100 million a year, leaning like a test rugby pack.
All four have been big donors to the major political parties. All four are the architects of global tax avoidance. All four, while sermonising to government on tax policy, are busy advising their multinational clients how to skulk out of paying tax.
And what did this hugely expensive report actually achieve?
It identified that there were two groups particularly at risk of entrenched welfare – 11,200 young carers aged 15-24 and 4370 young parents (aged under 18).
In order to help this very small, very specific group, the government’s first move will be to create a $96 million honey pot – the Try, Test and Learn Fund – to trial experimental initiatives aimed at getting key groups off the public books and into employment.
“Anyone who can see these human stories playing out on the ground can come to us with an idea,” Mr Porter told ABC radio. “We will fund those solutions and measure them”.
But the Coalition already defunded one such successful program in the 2014 budget from hell.
Funding for the Youth Connections program, which provided funding to local youth services to support young people at risk of disengaging from education and work, ran out at the end of 2014.
“This is a highly successful program, supporting 30,000 young people each year. When we have national youth unemployment at 12.2 per cent and many regions as high as 20 per cent we cannot afford to end assistance now,” Youth Connections National Executive Officer and now Xenophon MP Rebekha Sharkie said.
“What’s more, 93 per cent of young people in the program who had reconnected with education, training or employment for at least 13 weeks, were still working or studying six months after Youth Connections.” That’s an extraordinary level of success and shows that this programme is too important to face the chopping block.”
“It costs on average $2,500 for a person to be assisted on Youth Connections, when you look at annual costs of $20,000 for a young person to be on Youth Allowance, it just makes logical economic sense to provide the support.”
In a typical cost shifting exercise, the then Parliamentary Secretary to the Minister for Education, Senator Scott Ryan, issued a statement saying it was a state government issue.
“It is the responsibility of state and territory governments to ensure that young people stay in school until they are 17 as per their own legislation,” the statement said. “Around 74 per cent of the young people supported by the Youth Connections program were under 17 years old and thus a state and territory responsibility.”
Since Mr Porter is asking for ideas, I have a few to share.
Stop gifting hundreds of millions to the big 4 for work that could be done by government departments.
Stop supporting the firms that facilitate corporate tax evasion – their advice is tainted.
Stop defunding successful programs particularly since you have no better ideas.
Stop squeezing the poor to pay for your promises.
Stop making the taxpayer fund your celebrity lifestyle.
And just to show you how easy it could be…
Stop the corporate tax cut saving $50 billion over the next decade.
Cap the defence materiel budget to $10 billion a year saving $200 billion over the next two decades.
It’s not submarine science!
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